PERNOD-RICARD_REGISTRATION_DOCUMENT_2017-2018

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CORPORATE GOVERNANCE AND INTERNAL CONTROL REPORT OF THE BOARD OF DIRECTORS ON CORPORATE GOVERNANCE

Stock options granted to the Group’s top 10 employees other than corporate officers and options exercised by the Group’s top 10 employees other than corporate officers during FY18 (Table 9 AMF nomenclature)

Number of options allocated/shares subscribed or purchased

Weighted average price (€)

Plans

Options granted during the financial year by the issuer and any companies within its Group granting options to the top ten employees of the Company and any such Group company, receiving the highest number of options (1) Options held on the issuer and the companies included in the scope of allocation of the options exercised, during the year by the top 10 employees of the issuer and any company included in this scope, exercising the highest number of options During FY18, only six people within Pernod Ricard SA were affected by these allocations. (1) Pernod Ricard has not issued any other options granting access to the capital reserved for its Executive Directors or the top 10 employees of the Company and all companies within its Group granting options. Employee profit-sharing plans All employees of the Group’s French companies are eligible for profit-sharing and incentive agreements based on the results of each specific entity. In line with the Group’s decentralised structure, the terms and conditions of each of these agreements are negotiated at the level of each entity concerned. Similarly, outside France, the Group encourages all affiliates to implement local agreements enabling employees to share in the profits of the entity to which they belong. Profit-sharing agreements of this type exist in countries including Ireland and the United Kingdom: in each of these countries, employees may potentially receive Pernod Ricard shares based on their entity’s annual results. Provisions for pension benefits Details of the total amount of provisions recorded or otherwise recognised by the issuer for the payment of pensions are set out in Note 4.7 "Provisions" in the Notes to the consolidated financial statements. Compensation of Executive Committee members The members of the Compensation Committee are kept regularly informed of changes in the compensation given to members of the Executive Committee. In regularly reviewing the various aspects of compensation, the members of the Compensation Committee pay particular attention to ensuring that the policy applied to the Group’s Executive Director is

43,000

126.53

09.11.2017

24.06.2010/ 15.06.2011

118,967

66.05

consistent with the policy applied to the members of the Group’s Senior Management both in France and internationally. The compensation of the members of the Executive Board (excluding the Chairman & CEO), which is set by General Management, comprises a fixed annual portion, plus a variable portion representing an attractive incentive, for which the criteria are largely based on the Group’s financial performance and debt reduction, as is the case for the Executive Director. Qualitative criteria to evaluate individual performance are also applied to this variable financial portion. The Chairmen of the Group’s direct affiliates, who are members of the Executive Committee, also receive compensation comprising a fixed portion, which is set in proportion to individual responsibilities, plus a variable portion, for which the quantitative criteria depend firstly on the financial performance of the entity they manage and secondly on the Group’s results, with a view to strengthening solidarity and collegiality. The Chairmen are also evaluated using individual qualitative criteria. The same performance indicators thus apply to the key players in the Group’s business development, through the structure of and the method for evaluating the variable portion of their annual compensation. For a number of years, all members of the Executive Committee, including the Chairman & CEO, have also been evaluated on the basis of their employee development and management performance and the implementation of Sustainability & Responsibility (S&R) projects. The total fixed compensation awarded to the members of the Executive Committee, including the Executive Director, amounted to €7.7 million for FY18 (compared with €7.5 million in FY17). In addition to this, variable compensation (relating to FY17) of €6.4 million was paid (compared with €4.8 million in FY17). The total recurring expense in respect of pension commitments for members of the Executive Committee, including the Executive Director, was €4.4 million in the financial statements for the year ended 30 June 2018 (compared with €2.6 million as at 30 June 2017).

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PERNOD RICARD REGISTRATION DOCUMENT 2017/2018