HERMES_REGISTRATION_DOCUMENT_2017

CORPORATE GOVERNANCE

SUPERVISORY BOARD’S REPORT ON CORPORATE GOVERNANCE

Table three on pages 158 to 160 details the directors’ fees and other compensation paid to members of the Supervisory Board in the last two financial years by Hermès International and the entities it controls as defined by Article L. 233-16 of the French Commercial Code. The members of the Supervisory Board of a société en commandite par actions (partnership limited by shares) may be bound to the Company by an employment contract with no condition other than that resulting from the existence of a relationship of subordination with the Company and the recognition of effective employment. Frederic Afriat, the Employee Representative on the Supervisory Board, hasawork contract with theHermèsGroup (chief accountant of Comptoir Nouveau de la Parfumerie, Hermès Parfums) and as such receives a salary unrelated to his position on the Board. Consequently, and for rea- sons of confidentiality, his salary is not disclosed. Stock subscription and purchase options No stock options were granted to Supervisory Board members in 2017 nor were any such options exercised by them. Allocation of free shares No free shares were granted to members of the Supervisory Board in 2017.

s the annual variable component proportional to attendance paid to members and the deputy chairs of the Board was increased from €14,000 to €18,000; s the annual fixed amount of directors’ fees paid to members of the Audit and CAG Committees was increased from €4,000 to €5,200; s the annual variable component of directors’ fees proportional to attendance paid to members of the Audit and CAG Committees was increased from €6,000 to €7,800. Together the changes amount to a maximum increase in total annual directors’ fees as follows:

s €40,000 for the Chairman of the Board;

s €8,000 for the Committee chairs;

€6,200 for Board members;

3

s

s €3,000 for Committee members.

Thenewprinciples governing thedistributionof directors’ fees are set out in the Supervisory Board’s rules of procedure (page 171). They include a fixed component (35.47% for the Board and 40% for the Committees) and a variable component (64.53% for the Board and 60% for the Committees) proportional to attendance at meetings. In keeping with these principles the Supervisory Board at its meeting of 26 January 2018 distributed €557,300 out of the €600,000 allocated to directors’ fees and compensation by the General Meeting.

Tabular information on the compensation of Corporate Officers for disclosure in registration documents in accordance with AMF Recommendation 2009-16 amended on 13 April 2015

3.1.4.4

TABLE 1 Table summarising compensation and options and shares allocated to each Executive Chairman

2017

2016

From 1 January to 31 December 2017

From 1 January to 31 December 2016

Axel Dumas

Compensation due for the financial year (detailed in Table 2)

€2,774,656

€2,555,753

Valuation of options granted during the financial year (detailed in Table 4) Valuation of multi-year variable compensation assigned during the financial year Valuation of performance shares granted during the financial year (detailed in Table 6)

n/a n/a n/a

n/a n/a n/a

TOTAL

€2,774,656 €2,774,656

€2,555,753 €2,555,753

Total natural persons as Executive Chairmen

From 1 January to 31 December 2017

From 1 January to 31 December 2016

Émile Hermès SARL

Compensation due for the financial year (detailed in Table 2)

€1,256,409

€1,256,409

Valuation of options granted during the financial year (detailed in Table 4) Valuation of multi-year variable compensation assigned during the financial year Value of performance-based shares granted during the financial year (detailed in table 6)

n/a n/a

n/a n/a

n/a

n/a

TOTAL

€1,256,409 €1,256,409

€1,256,409 €1,256,409

Total legal entities as Executive Chairmen

n/a: not applicable.

2017 REGISTRATION DOCUMENT HERMÈS INTERNATIONAL

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