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2016 REGISTRATION DOCUMENT
HERMÈS INTERNATIONAL
111
CORPORATE GOVERNANCE
3
REPORT FROM THE CHAIRMAN OF THE SUPERVISORY BOARD ON THE CORPORATE GOVERNANCE PRINCIPLES
Provisions of the AFEP-MEDEF Code not applied
Explanations
Succession plan for Executive Corporate Officers
(Art. 16.2.2.)
The Appointments Committee (or an ad hoc
committee
)
establishes a succession plan for Executive Corporate
Officers. This is one of the committee’s main tasks,
although it may, where appropriate, be entrusted by the
Board to an ad hoc committee. The Chairman can be
part of or associated with the committee’s work for the
performance of this task.
The CAG Committee (see description starting on page 120) is not responsible for
establishing the succession plan for the Executive Chairmen, which does not fall within
the powers of the Supervisory Board in a société en commandite par actions (partnership
limited by shares).
The CAG Committee must, since 2016, in accordance with its rules of procedure, ensure
the existence of a succession plan for the Executive Chairmen, which it has done (see the
Executive Management’s report, page 90).
Composition of the Compensation Committee
(Art. 17.1)
It is recommended that the Chairman be independent,
and that one employee director or member sit on the
committee.
The CAG Committee (see description starting on page 120) is not responsible for setting
the compensation of the Executive Chairmen, which falls within the powers of the Active
Partner and not those of the Supervisory Board. The Supervisory Board therefore decided
that it was not relevant for an employee representative to be a member.
Severance payment (Art. 24.5.1)
The performance conditions set by boards for such
benefits should be assessed over two years at least.
They should be demanding, and should not allow the
compensation of an officer in the event of dismissal,
regardless of the form taken by this departure.
The Company has agreed to make a severance payment to Axel Dumas under the
conditions described in the explanatory statement on page 288.
In view of the importance of the Active Partner’s role within a société en commandite
par actions (partnership limited by shares), and in the case of a legal entity of its Legal
Representative, it was considered that the termination of duties of Axel Dumas as
Executive Chairman, that would result from the replacement of the Executive Chairman of
Émile Hermès SARL, should be viewed as a forced departure.
The Supervisory Board accordingly considered that the deferred compensation
commitment made for the benefit of Axel Dumas complied with the requirements of the
AFEP-MEDEF Corporate Governance Code.
Consultation of shareholders on the compensation of
the Chairman of the Supervisory Board (Art. 26.2)
It did not seem relevant for the Executive Management to propose to shareholders a vote
on the compensation of the Chairman of the Supervisory Board insofar as he:
s
receives fixed compensation in the amount of €100,000 as provided in the rules of
procedure of the Supervisory Board and that it is charged against the total amount of
directors’ fees approved by the General Meeting,
s
receives no other elements of compensation of any kind whatsoever.
Shareholders have previously been made aware of this information.
3.2.2
CONDITIONS GOVERNING THE PREPARATION AND ORGANISATION OF THE SUPERVISORY
BOARD’S WORK
3.2.2.1
Composition of the Supervisory Board
Applicable principles
The Supervisory Board consists of three to fifteen members (not inclu-
ding employee representatives), selected from amongst sharehol-
ders who are neither Active Partners, nor legal representatives of an
Active Partner, nor the Executive Chairman (Article 18.1 of the Articles
of Association). They are appointed by the Ordinary General Meeting
(Article L. 226-4 of the French Commercial Code
(Code de commerce).
When appointments to the Supervisory Board come up for renewal, the
number of Supervisory Board members is fixed by a decision adopted
by the Active Partner.
Amember of the Supervisory Board representing the Group’s employees
(or two if thenumber ofmembers of theSupervisory Board is greater than
13) is designated by the managing Group Committee (Article 18.6 of the
Articles of Association).
The term of office of all members of the Supervisory Board is three years
(Article18.2oftheArticlesofAssociation).AspartoftheGeneralMeeting
of 2 June2009, theCompany approvedaprovision calling for one-thirdof
Supervisory Board members to stand for re-election each year.
No person over the age of 75 shall be appointed to the Supervisory
Board if, as a result of such appointment, more than one-third of the
Board members would be over that age (Article 18.3 of the Articles of
Association).
The Supervisory Board elects a Chairman, who is a natural person, and
two Vice-Chairmen, fromamong its members (Article 19.2 of the Articles
of Association).
Composition of the Supervisory Board as at 31 December 2016
The Supervisory Board is currently composed of 11 members: Éric de
Seynes, Chairman, Dominique Senequier and Monique Cohen, Vice-
Chairmen, Frédéric Afriat (employee representative), Charles-ÉricBauer,
Matthieu Dumas, Blaise Guerrand, Julie Guerrand, Sharon MacBeath,
Renaud Momméja and Robert Peugeot. All the Supervisory Board
members are French except Sharon MacBeath, who is British.
Nathalie Besombes, director of company law and stock markets and
compliance officer, is the Board Secretary.
In a decision dated 21March 2017, the Active Partner set the number of
Supervisory Boardmembers at 13 (including employee representatives)
to allow the appointment of two new members to the Supervisory Board
by the General Meeting of 6 June 2017: Dorothée Altmayer and Olympia
Guerrand. Information regarding them is provided on page 107.