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CORPORATE GOVERNANCE AND INTERNAL CONTROL
2.4 Compensation of executive corporate officers
2
87
Registration Document 2016 — Capgemini
Compensation components due or awarded in respect of 2016 to Mr. Paul Hermelin, Chairman and Chief Executive
Officer and subject to shareholder mandatory vote
to vote
value subject
accounting
Amount or
Presentation
compensation
Fixed
€1,452,000
(paid in 2016)
the change in Mr. Paul Hermelin’s role who became Chairman and Chief Executive Officer at the end of
with the AFEP-MEDEF Code. This amount is unchanged on 2013 when it was increased by 10% to reflect
evolution and internationalization of the Group since 2008, when his compensation was last modified. The
the Combined Shareholders’ Meeting of May 24, 2012, the extension of his responsibilities and the
1.2%
per annum
. This theoretical compensation falls within the average for CAC 40 executives.
annualized increase in his theoretical compensation since 2008 and therefore in his fixed compensation is
on February 17, 2016 at the recommendation of the Compensation Committee. It represents 60% of the
The gross fixed compensation of €1,452,000 for fiscal year 2016 was approved by the Board of Directors
total theoretical compensation if objectives are attained and is reviewed at long intervals in accordance
Annual
compensation
variable
€1,075,855
(paid in 2017)
of Mr. Paul Hermelin’s variable compensation for fiscal year 2016, of a target amount if objectives are
approved accounts and at the recommendation of the Compensation Committee, assessed the amount
components, V1 and V2, that may vary between 0% and 200% of the theoretical amount.
attained of €968,000, i.e. 40% of his total theoretical compensation and comprising two equal
During the Board of Directors’ Meeting of February 15, 2017, the Board, based on the audited and
respective weightings, all relating to the financial results as compared to an ambition decided by the
V1 component:
this component is calculated in accordance with quantifiable criteria and the following
Board:
1) % attainment of the
revenue
:
30%
weighting;
2) % attainment of the
operating margin rate
:
30%
weighting;
3) % attainment of
pre-tax net profit
:
20%
weighting;
4) 2016
Free Cash Flow: 20%
weighting.
February 17, 2016.
These objectives were assessed with respect to the objectives set by the Board of Directors’ Meeting of
which taking account of the relative weighting of each objective, gives a
weighted attainment rate of
Attainment rates
for these four objectives were
98.39%, 94.98%, 95.07% and 120.22%
respectively,
101.07%.
The Group’s historical calculation formula accelerates actual performance upwards and downwards such
that:
70% last year), the V1 component will be nil;
if the weighted performance of the above four financial indicators is less than or equal to 75% (was
■
130% last year), the V1 component will be capped and equal to twice its theoretical amount.
if the weighted performance of the above four financial indicators is greater than or equal to 125% (was
■
decreases the variable component by 4%. Therefore, application of the formula to the weighted
Accordingly, with this formula, a one point variance in the weighted attainment rate increases or
104.28%, giving an amount of 968,000/2*104.28 = €504,735
.
attainment rate of 100.1% in 2016 results in the multiplication of the theoretical variable component by
transformation” for 25%.
work done by the Compensation Committee which reviewed the various qualitative objectives grouped
V2 component:
The evaluation and the associated proposal have been prepared on the basis of the
“Strategic agenda around industrialization and account centricity culture” for 25% and “HR
into four categories: “Success of IGATE integration” for 30%, “new strategic development” for 20%,
in 2016 vs. 2015. For these two quantitative measures the achievements were on i) exceeded and on ii)
talent base and ii) ensuring the retention of the IGATE top 20 client base, through a net revenue increase
the integration impact on the strengthening of our Indian and US operations and of our client centric
an increase superior to Group growth. For the third indicator, the Board made a qualitative evaluation of
regard to the achieved quantified indicators and to the qualitative evaluation,
the Board considered that
culture and highlighted in particular, a reinforced account centricity culture and Capgemini brand. In
the objectives set for this category have been achieved at 140%
.
the same weight, including two quantitative measures around i) ensuring the retention of the IGATE VP
For the first
category (Success of IGATE integration-30%),
the Board set three indicators each with
on two qualitative objectives i) the identification of appropriate acquisition targets and ii) the Cloud and
For the second
category (Next strategic development-20%)
, the Board based its recommendations
set for this category have been realized at 90%.
Digital development strategy.
Given these achievements, the Board considered that the objectives