Cap Gemini - Registration Document 2016

CORPORATE GOVERNANCE AND INTERNAL CONTROL

2.4 Compensation of executive corporate officers

Registration Document 2016 — Capgemini

expansion of the Group and has remained unchanged since;

the fixed component is not reviewed annually, but after several

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Hermelin’s fixed compensation was increased in 2008 and was

years in accordance with the AFEP-MEDEF Code. Mr. Paul

responsibilities and to reflect the strong growth and international

only reviewed in 2013 (+10%) following an extension of his

on a comparison of actual audited and budgeted Group

The level of attainment of these indicators is determined based

indicators presented regularly to the market and are tied to:

consolidated results. The indicators adopted in line with the key

the V1 component and the weighting applied to each indicator.

the internal performance indicators included in the calculation of

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growth through Group Revenue for 30%,

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operating profitability through Group Operating margin for

❚

30%,

for 20%,

cash generation through the Group Free Organic Cash Flow

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is the driver to assess the dividend level;

shareholders return through net profit for another 20% as this

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data

and, that objectives are clearly tied to the roll out of the

as conditions to deliver the long term strategic plan.

Group’s strategy priorities approved by the Board of Directors

compensation. The strategic and operating objectives for 2016

the individual performance objectives underlying V2

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“New Strategic Development”, “Strategic agenda around

felt into four main categories, “Succesfull IGATE integration”,

transformation”. The Board of Directors ensured the objectives

Industrialization and account centric culture” and “HR

the total variable compensation was based on quantitative

were based on directly measurable items so that overall

75% of

The V1 component varies in line with a formula applied for many

upwards and downwards such that:

decades within the Group, that accelerates actual performance

indicators is less than or equal to 75%;

the V1 component is nil if the weighted performance of financial

◗

on a straight-line basis between these two limits.

weighted performance is greater than or equal to 125%; varying

the V1 component can reach twice the theoretical amount if the

◗

of Directors’ meeting in Y+1 held to approve the financial

recommendation of the Compensation Committee, by the Board

occasions before the Board of Directors’ Meeting to appraise the

statements of fiscal year Y. The Committee meets on several

executive session of the Board was held in December 2016 and

percentage attainment by Mr. Paul Hermelin of his objectives. An

variable compensation components are decided pursuant to the

The level of attainment of objectives and the amount of the

Mr. Hermelin of his objectives.

the Board of Directors which decides the level of attainment by

another one in February 2017 to assess such performance before

of the compensation elements for fiscal year Y.

The variable compensation used to be paid end of March, after

statements for fiscal year Y, underlying the calculation of the

the Board of Directors’ Meeting that approves the financial

percentage attainment of individual objectives set. Going forward,

various variable compensation components and that decided the

Officer will be paid following approval by the Shareholders Meeting

the variable compensation of the Chairman and Chief Executive

Summary table of the theoretical structure of fixed and variable compensation

Theoretical compensation structure, base 100

Target

Min

Max

Gross fixed compensation

Annual variable compensation V1

Annual variable compensation V2

Multi-year variable compensation

TOTAL IF OBJECTIVES ARE ATTAINED

100

140

% variable / fixed

67%

133%

procedures

Cap Gemini share-based incentive policy

grants performance shares in accordance with the following

The Group stopped granting stock options in 2009 and now

principles:

any shares in 2010 or 2011;

2009, 2012, 2013, 2014, 2015 and 2016 but was not granted

of presence and performance as applicable to other Group

performance shares are granted subject to the same conditions

conditions

. Mr. Paul Hermelin received performance shares in

beneficiaries and

all shares are subject to performance

the first two share grants in 2009 and 2010, where the vesting

the performance conditions are ambitious, as demonstrated by

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shares initially granted;

rates were only 50% and 68.5%, respectively, of the number of

for shareholders' approval and include, internal and external

the performance conditions are set in the resolution submitted

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recommendation, and are calculated over a 3 year period;

performance conditions in accordance with the AMF

2.19% and 2.99% respectively;

eight performance share grants, the average percentages are

2.32% respectively of the total amount authorized by the

Mr. Paul Hermelin in 2014 and 2015 represented 3.14% and

and 3.58% and 3.2% of the total amount granted to all

Combined Shareholders Meeting for the corresponding periods

2.44% and 2.52% respectively for 2016. Since 2009 and over

beneficiaries within these resolutions. These percentages were

pursuant to the resolutions presented to shareholder vote is

the number of shares granted to executive corporate officers

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last resolution voted on May 18, 2016 and maximum of 5% for

limited (maximum of 10% of shares available for grant set in the

an Executive Director alone). The performance shares granted to