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2016 REGISTRATION DOCUMENT
HERMÈS INTERNATIONAL
47
Corporate social responsability
2
People
2.3.1.4
Compensation
Compensation
In millions of euros
2014
2015
2016
Total payroll
518
579
609
The Group’s payroll was €609 million in 2016 versus €579 million
in 2015, to which one must also add €198 million of social security
charges. In France, payroll includes distribution of €68.8million in incen-
tive schemes and profit-sharing, and €2.7 million in employee support
activities.
The rise in payroll costs (excluding exchange rate impact) reflects
increases in both workforce and salaries in all geographical areas.
Hermès is committed to rewarding employee performance at the collec-
tive and individual levels, and the increase in variable compensation at
both levels reflects this commitment.
Compensation mainly reflects skills, levels of responsibility and local
conditions.
Compensation is determined primarily by employee qualifications.
Every year, the Group provides its subsidiaries with budgetary guide-
lines for salary growth that take into account inflation and local markets.
Particular vigilance is required concerning equality between men and
women and themarket difference (internal and external). Additional bud-
gets may be granted if adjustments are necessary. The compensation
paid to Corporate Officers is shown on page 138 of this document.
Hermès, the great majority of whose employees work in OECD coun-
tries, strictly applies working time and minimum wage regulations in
compliance with UN conventions and seeks to exceed such regulations
wherever possible.
2.3.1.5
Employee support activities (France)
The total amount paid to Works councils for employee support activities rose by 17.39% in 2016.
In millions of euros
2014
2015
2016
Employee support activities
2.2
2.3
2.7
2.3.1.6
Incentive schemes and profit-sharing (France)
Since 2012, a special participation agreement with all of the represen-
tative unions, has enabled all employees of the companies in France
to be associated with the profits of the Group in a harmonised manner.
Incentive agreements are also in place at each company. These agree-
ments have a duration of three years and aim to associate employees
with the development of locally-determined indicators that are relevant
with regard to the activity and environment of each of these entities,
notably quality, safety and productivity.
Employees of foreign entities (39% of all Group employees in 2016) also
benefit froma range of regular additional compensation initiatives in line
with performance and local customs.
In millions of euros
Incentive schemes
Profit-sharing
Total
2014
24.2
39.7
63.9
2015
25.9
40.2
66.1
2016
26.9
1
41.9
2
68.8
(1) Including the ratification of new agreements.
(2) An incentive supplement was paid to all of the Group’s French companies pursuant to the Group’s participation agreement.
2.3.1.7
Involving all employees in the Group’s long-
term growth
Faithful to its family tradition and wanting to involve all employees world-
wide in theGroup’s growth, Hermès has historically implemented several
employee shareholding plans, notably free share plans in 2007, 2010,
2012 and 2016.
All of these plans send a singlemessage to eligible employees worldwide
and their objective is three-fold:
s
s
to show the confidence of the House in the long-term commitment of
its employees and unite them around the Group strategy;
s
s
to acknowledge the contribution made by employees at all levels to
the development of the House, by providing a single compensation
component to share the benefits of our growth, enabling employees
to identify more closely with the long-term Hermès growth decisions;
s
s
to consolidate the strong links between the employees and theHouse
at every opportunity.