Cap Gemini - Registration Document 2016

2

CORPORATE GOVERNANCE AND INTERNAL CONTROL

2.4 Compensation of executive corporate officers

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 ◗ variable compensation components are decided pursuant to the The level of attainment of objectives and the amount of 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 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 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

expansion of the Group and has remained unchanged since; responsibilities and to reflect the strong growth and international only reviewed in 2013 (+10%) following an extension of his the V1 component and the weighting applied to each indicator. the internal performance indicators included in the calculation of ◗ the fixed component is not reviewed annually, but after several ◗ Hermelin’s fixed compensation was increased in 2008 and was years in accordance with the AFEP-MEDEF Code. Mr. Paul 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 growth through Group Revenue for 30%, ❚ operating profitability through Group Operating margin for ❚ 30%, for 20%, cash generation through the Group Free Organic Cash Flow ❚ is the driver to assess the dividend level; shareholders return through net profit for another 20% as this ❚ compensation. The strategic and operating objectives for 2016 the individual performance objectives underlying V2 ◗ “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 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

of the compensation elements for fiscal year Y.

Summary table of the theoretical structure of fixed and variable compensation

Theoretical compensation structure, base 100

Target

Min

Max

Gross fixed compensation

60 20 20

60

60 40 40

Annual variable compensation V1 Annual variable compensation V2 Multi-year variable compensation

0 0 0

0

0

TOTAL IF OBJECTIVES ARE ATTAINED

100

60

140

% variable / fixed

67%

0%

133%

procedures Cap Gemini share-based incentive policy

for shareholders' approval and include, internal and external the performance conditions are set in the resolution submitted ◗ recommendation, and are calculated over a 3 year period; performance conditions in accordance with the AMF pursuant to the resolutions presented to shareholder vote is the number of shares granted to executive corporate officers ◗ 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 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 2.19% and 2.99% respectively; eight performance share grants, the average percentages are 2.44% and 2.52% respectively for 2016. Since 2009 and over beneficiaries within these resolutions. These percentages were

grants performance shares in accordance with the following The Group stopped granting stock options in 2009 and now principles: 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 any shares in 2010 or 2011; 2009, 2012, 2013, 2014, 2015 and 2016 but was not granted the first two share grants in 2009 and 2010, where the vesting the performance conditions are ambitious, as demonstrated by ◗ shares initially granted; rates were only 50% and 68.5%, respectively, of the number of

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Registration Document 2016 — Capgemini