Hermès - Registration Document 2016

2016 REGISTRATION DOCUMENT

HERMÈS INTERNATIONAL

121

CORPORATE GOVERNANCE

REPORT FROM THE CHAIRMAN OF THE SUPERVISORY BOARD ON THE CORPORATE GOVERNANCE PRINCIPLES

Tasks and activity of the CAG Committee in 2016

In 2016, the CAG Committee met five times (as opposed to six times in 2015).

Individual and average rates of attendance are indicated in the table on page 115.

CAG Committee Missions

Activity of the CAG Committee in 2016

The Compensation, Appointments and Governance Committee

studies and prepares certain proceedings of the Supervisory Board

and submits its opinions, proposals and recommendations to the

Board. Without prejudice to the powers of the Supervisory Board,

which it does not replace, the Compensation, Appointments and

Governance Committee missions are:

In 2016, the CAG Committee was required to examine and/or issue

recommendations on many subjects and in particular the following:

With respect to compensation

to receive information and draw up recommendations from the

Board to the Executive Management on the terms and conditions of

compensation paid to Executive Committee members;

to receive information and draw up recommendations from the

Board to the Executive Management on the terms and conditions

of allotment of any stock options and bonus shares granted to

Executive Committee members;

to draw up proposals and recommendations on the total amount

of directors’ fees and other compensation and benefits awarded

to members of the Supervisory Board and of its specialised

committees, and on the apportionment thereof, primarily on the

basis of Board members’ attendance at meetings;

to review proposals for stock subscription or purchase options and

bonus share distributions to Senior Executives in order to enable

the Supervisory Board to determine the aggregate or individual

number of options or shares allotted, and the terms and conditions

of allotment;

to review proposals for stock subscription or purchase options

and bonus share distributions for employees and to draw up

recommendations thereon for submission to the Executive

Management;

to assist the Supervisory Board in determining the conditions

and performance criteria to be applied in the allocation of stock

subscription or purchase options, performance-based shares and/

or additional pensions to Executive Chairmen;

to ascertain that the compensation of the Executive Chairmen

complies with the provisions of the Articles of Association and the

decisions made by the Active Partner;

to remain informed and to make recommendations to the

management or supervisory bodies of the main French subsidiaries

within the Hermès Group, relative to compensation of Executive

Corporate Officers;

to remain informed and to make recommendations to the

management or supervisory bodies of the main French subsidiaries

within the Hermès Group, relative to granting options to purchase

shares to Executive Corporate Officers;

to perform specific assignments entrusted to it by the management

or supervisory bodies of the main French subsidiaries within the

Hermès Group.

review of the chapters of the registration document on corporate

governance and compensation of Senior Executives (management report)

and of the description of the proposed resolutions relative to the advisory

opinion

(“Say on Pay”)

regarding the compensation of Senior Executives;

projected distribution of directors’ fees and compensation payable to the

Board members and Committee members in respect of FY 2015;

review of a proposed allocation of free shares;

presentation of company policy in matters of professional and earnings

equality;

2016 compensation of the Hermès International Executive Chairmen and

press release to be published on the financial Internet site;

review of compensation of Executive Committee members;

validation of the compensation of Corporate Officers of French

subsidiaries remunerated for their office.

The CAG Committee reviewed current events in matters of compensation:

AFEP – Study on directors’ fees (July 2016);

AFEP – Study on performance criteria of compensation of Senior

Executives (June 2016);

AFEP – Summary of

Say on Pay studies

and renewal of terms of office of

Executive Corporate Officers as directors (July 2016).

With respect to appointments

to prepare the Board’s proposals to the Active Partner after

examining all the elements which it must take into account in its

deliberation: balance to be sought in the composition of the Board

in light of the composition of, and changes in, the Company’s

shareholders, search for and appraisal of possible candidates and

advisability of reappointments;

to organise a selection procedure for future independent

members of the Board and carry out its own research on potential

candidates, to which the Executive Chairmen are associated;

to ensure a plan of succession of the Executive Corporate Officers

(the Executive Chairmen) drawn up by the Active Partner;

change of the composition of the Board;

information on the appointment by the Group Committee of a new Board

member representing the employees to replace Denis Marmonier;

succession plan for Senior Executives (presentation by the Head of HR

of the talent review process and summary of the results, presentation by

Axel Dumas of the Executive Management succession plan);