HERMES_REGISTRATION_DOCUMENT_2017

CORPORATE GOVERNANCE

SUPERVISORY BOARD’S REPORT ON CORPORATE GOVERNANCE

Duties and work of the CAG Committee in 2017 In 2017 the CAG Committee met six times (as opposed to five times in 2016). Individual and average rates of attendance are indicated in the table on page 144.

Duties of the CAG Committee

Work of the CAG Committee in 2017

The Compensation, Appointments and Governance Committee studies and prepares certain proceedings of the Supervisory Board and submits its opinions, proposals and recommendations to the Board. Without prejudice to the powers of the Supervisory Board, which it does not replace, the duties of the CAG Committee are to: s be consulted and draw up recommendations from the Supervisory Board to Executive Management on the terms governing the compensation paid to Executive Committee members; s be consulted and draw up recommendations from the Board to Executive Management on the terms and conditions of granting any stock options and free shares to Executive Committee members; s draw up proposals and opinions on the total amount and distribution, particularly on the basis of attendance of directors’ fees and other compensation and benefits awarded to members of the Supervisory Board and its Committees; s review proposals for stock options and free share awards to senior executives to enable the Supervisory Board to determine the aggregate or individual number of options or shares allotted and the terms and conditions of allotment; s review proposals for stock options and free share awards to employees and draw up recommendations thereon to Executive Management; s assist the Supervisory Board in determining the conditions and performance criteria to be applied to awarding stock options, performance-based shares and/or additional pensions to Executive Chairmen; s ascertain that the compensation of the Executive Chairmen complies with the Articles of Association and the decisions made by the Active Partner; s acquaint itself with and make recommendations to the management or supervisory bodies of the main French subsidiaries within the Hermès Group on the compensation of Executive Corporate Officers; s acquaint itself with and make recommendations to the management or supervisory bodies of the main French subsidiaries within the Hermès Group on the terms and conditions of awarding stock options to Executive Corporate Officers; s carry out specific assignments entrusted to it by the management or supervisory bodies of the main French subsidiaries within the Hermès Group. With respect to compensation

In 2017, as in the previous year, the CAG Committee used a dashboard to plan and prepare its work in a balanced way over the year. In 2017 the CAG Committee was required to examine and/or make recommendations on many subjects and in particular to:

With respect to compensation

s review the chapters of the 2016 registration document on corporate governance and compensation of senior executives (management report) and the description of the proposed resolutions relative to the advisory opinion (“Say on Pay”) regarding the compensation of senior executives; s propose the distribution of directors’ fees and compensation payable to Board and Committee members for 2016; s present company policy regarding gender equality and equal pay for equal work; s review compensation for 2017 of the Hermès International Executive Chairmen and the press release to be put up on the financial website; s review compensation for 2017, bonuses paid for 2016 and bonuses to be paid for 2017 to Executive Committee members; s confirm compensation for 2017, bonuses paid for 2016 and bonuses to be paid in 2017 to the Corporate Officers of French subsidiaries; s review the performance in 2016 and the impact on the number of free shares awarded to beneficiaries subject to performance conditions under the 2016 selective free share plan; s ratify new principles governing the distribution of directors’ fees. The CAG Committee reviewed current events in matters of compensation: law 2016-1691 on transparency and anticorruption, known as the loi Sapin II (with provisions relating to Say on Pay); s accuracy article: Comment rémunérer les dirigeants pour le long terme ? s LES ECHOS article: Salaires des patrons: ce que veulent les grands gérants (2 February 2017) ; s IFA document: Guide for Remuneration Committees (May 2017); s AFEP-MEDEF study on Hermès International’s application of the code with regard to compensation; s AFEP study on the performance criteria of compensation to senior executives (June 2017); s AFEP summary of studies on Say on Pay and the reappointment of Executive Corporate Officers to Boards of Directors (July 2017); s 2017 “Governance in action” study of CAC 40 companies; s AMF Recommendation “General Meetings of Listed Companies” (24 October 2017).

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2017 REGISTRATION DOCUMENT HERMÈS INTERNATIONAL

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