HERMÈS - 2018 Registration document

Corporate Governance

Supervisory Board’s report on corporate governance

Provisions of the AFEP-MEDEF Code not applied for other reasons Consultation of shareholders on the compensation of the Chairman of the Supervisory Board (Article 26.2)

Explanations

It did not seem relevant for the Executive Management to ask shareholders to vote on the compensation of the Chairman of the Supervisory Board insofar as he: s s receives fixed compensation of €140,000 as set out in the Supervisory Board’s rules of procedure, deducted from the total amount of directors’ fees approved by the General Meeting; s s receives no other compensation of any kind whatsoever. Shareholders have previously been made aware of this information.

Changes made since the revision of the AFEP‑MEDEF Code in June 2018 to ensure compliance therewith

Explanations

On 11 September 2018 the Supervisory Board’s rules of procedure (see page 207 for the full text) were updated in order to: s s update the date of revision of the AFEP-MEDEF Code (§ 1.1.21.); s s include the new provisions of Articles 1.4 to 1.7, 6.2 and 4.4 of the AFEP-MEDEF Code (§ 1.2.4.); s s include the new provisions of Article 19 of the AFEP-MEDEF Code (§ 1.1.3.6.). The CAG-CSR Committee’s rules of procedure were updated on 16 November 2018 to: s s rename it “Compensation, Appointments, Governance and CSR Committee” or “CAG- CSR Committee”; s s assign new duties to it relating to social and environmental responsibility: • • assist the Supervisory Board in monitoring issues relating to CSR so that the Hermès Group can better foresee and tackle opportunities, challenges and the related risks, • • assist the Supervisory Board in monitoring the Hermès Group’s social policy and the non-discrimination and diversity policy. The Audit Committee’s rules of procedure were updated on 16 November 2018 and 19 March 2019, in order to: s s rename it the "Audit and Risk committee"; s s two new duties relating to risk exposure and the prevention of corruption: • • regularly review opportunities and exposure to risks such as financial, legal, opera- tional, social and environmental risks, as well as the measures taken in the light of these, • • ensure the implementation of a system for the prevention and detection of corrup- tion and influence-peddling; s s include the new provisions of Articles 1 and 15.2 of the AFEP-MEDEF Code (§ 2.1) At its meeting of 20 March 2018, the Supervisory Board had already assigned to the Chairman the responsibility for communicating with shareholders on behalf of the Board (see page 178). The policy on diversity in the composition of the Board already featured in the Registration Document (see page 170). A new review of the independence of members of the Supervisory Board was carried out by the CAG-CSR Committee in early 2019, by checking that independent members did not act in an «advisory» capacity for the Hermès Group. No alignment necessary as the individual attendance of members of the Supervisory Board already featured in the Registration Document (see page 177). The presentation of resolutions proposing the reappointment or appointment of members of the Supervisory Board was supplemented (see page 378 et seq. ) by the reasons for which they are proposed. On the proposal of the CAG-CSR Committee, the Executive Management Board of Émile Hermès SARL of 19 March 2019 decided to subject part of the variable compensation of the two Executive Chairmen to a new CSR criterion, representing the Group’s stated and constant commitments to sustainable development, as set out on page 202. The brief presentation of the Board and committees, the presentation sheets of the Executive Chairman and members of the Supervisory Board, the table of changes made in the composition of the Board and the presentation of the independence of members have been fine-tuned.

Duties of the Board (Article 1.1 to 1.6) Commitments of companies to non-discrimination and diversity (Article 1.7) Communication between shareholders and the Board (Article 4.4) The Board’s diversity policy (Article 6.2) Duties of the Audit Committee (Article 15.2) Business ethics of directors (Article 19)

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Independence criteria (Article 8.5.3)

Individual participation of Directors (Article 10.1)

Reason for which the appointment or reappointment of a member of the Board is proposed to the General Meeting (Article 13.4) Inclusion of a CSR-related criterion in Senior Executive compensation (Article 24.1.1)

Standardised presentation of information on the Board and Committees

2018 REGISTRATION DOCUMENT HERMÈS INTERNATIONAL

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