Hermès - Registration Document 2016

2016 REGISTRATION DOCUMENT

HERMÈS INTERNATIONAL

133

CORPORATE GOVERNANCE

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

Compensation, Appointments and Governance Committee

rules of procedure

Effective 22 March 2016 – Version no. 5

Purpose

These rules of procedure define the composition, missions andmethods

of organisation and operation of the Compensation, Appointments and

Governance Committee of Hermès International, which acts under the

collective and exclusive responsibility of the Supervisory Board.

Their purpose is to enhance the quality of the Compensation,

Appointments and Governance Committee’s work by promoting the

application of good corporate governance principles and best practices,

in the interests of ethics and greater effectiveness.

Composition of the Compensation, Appointments

and Governance Committee

Chairmanship – Number of members

The Chairman of the Compensation, Appointments and Governance

Committee is appointed by the Supervisory Board.

The Compensation, Appointments and Governance Committee com-

prises at least three members of the Supervisory Board.

Proportion of independent members

At least half of the members of the Compensation, Appointments and

Governance Committee must, at the time of their appointment and for

the duration of their office, be qualified as independent as defined in the

Supervisory Board rules of procedure.

Term of appointment to the Compensation, Appointments

and Governance Committee

The members of the Compensation, Appointments and Governance

Committee are appointed by the Supervisory Board for the duration of

their term of office as a member of the Supervisory Board or for any

other period defined by the Supervisory Board. They may be reappointed

indefinitely.

Tasks of the Compensation, Appointments

and Governance Committee

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:

With respect to compensation:

to receive information and draw up recommendations from the Board

to the Executive Management on the terms and conditions of com-

pensation 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 allot-

ment 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 com-

mittees, 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 num-

ber 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 recommen-

dations 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 subscrip-

tion or purchase options, performance-based shares and/or additio-

nal pensions to Executive Chairmen;

to ascertain that the compensation of the Executive Chairmen com-

plies with the provisions of the Articles of Association and the deci-

sions made by the Active Partner;

to remain informed and to make recommendations to the manage-

ment or supervisory bodies of themain French subsidiarieswithin the

Hermès Group, relative to the compensation of Executive Corporate

Officers;

to remain informed and to make recommendations to the manage-

ment 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.

With respect to appointments:

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

ning all the elements which it must take into account in its delibera-

tion: 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.

With respect to corporate governance:

to recommend revisions to corporate governance rules, as needed;

to periodically ascertain that independent Supervisory Board

members meet the criteria pertaining to independence and objec-

tiveness set out in the Supervisory Board rules of procedure;

to review the composition of the specialised committees;

to oversee the annual assessment of Supervisory Board practices;