Saint Gobain - Registration document 2016

6 CORPORATE GOVERNANCE

2. Management and Directors’ compensation

b) Annual variable compensation of his annual fixed compensation, is allocated to the Chairman The annual variable compensation, expressed as a percentage to the Group’s results for the year. and Chief Executive Officer in recognition of his contribution At its meeting on February 25, 2016, based on the 2016 at 170% of his annual fixed compensation (same as for Mr. Pierre-André de Chalendar’s variable compensation for Governance Committee, the Board decided to fix the cap on recommendation of the Nomination, Remuneration and 2015). Based on the recommendation of the Nomination, compensation, as follows (structure unchanged since 2014): objectives of Mr. Pierre-André de Chalendar’s 2016 variable meeting, the Board also decided on the components and Remuneration and Governance Committee, during the same concerning the quantitative portion of the variable ‹ each counting for 25%, were defined: following objectives adapted to the strategy of the Group, compensation, which represents two-thirds, the four ROCE (Return on Capital Employed), ‹ the Group’s operating income, ‹ the Group’s recurring net income per share, and ‹ OFCF (Operating Free Cash Flow); ‹ four following objectives: a qualitative portion consisting of one-third, based on the ‹ Sika transaction, ‹ Group’s digital transformation, ‹ policy, and implementation of the corporate social responsibility ‹ continuation of the Group’s development strategy. ‹

The following chart presents the distribution of the various components of the compensation of Mr. Pierre-André de granted in respect of fiscal year 2016. Chalendar, Chairman and Chief Executive Officer, due or

COMPENSATION SUBJECT TO PERFORMANCE CONDITIONS

27% 2016 FIXED COMPENSATION =€1,100,000

29% VALUE OF THE 2016 PERFORMANCE SHARES

ALLOCATION =€1,189,900

6% VALUE OF THE 2016 OPTIONS ALLOCATION =€244,200

38% 2016 VARIABLE COMPENSATION =€1,529,879

were decided by the Board of Directors at its meetings of to Mr. Pierre André de Chalendar in respect of fiscal year 2016 The various components of the compensation due or granted as follows: February 25, 2016, November 24, 2016 and February 23, 2017, a) Fixed compensation The fixed compensation component is commensurate with compensations offered by similar large companies. responsibilities, and shall be compared with fixed the Chairman and Chief Executive Officer’s experience and changed since 2010. set by the Board at €1,100,000, an amount that has not Mr. Pierre-André de Chalendar’s 2016 fixed compensation was

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at its meeting of February 23, 2017, at the proposal of the Nomination, Remuneration and Governance Committee, as follows: Variable compensation owed for fiscal year 2016 to the Chairman and Chief Executive Officer was set by the Board of Directors

Weighting of objectives

Assessment scale for each objective

Percentage completion amount (in EUR) Completion by

ROCE

25%

0 to 100%

79%

245,844

Group operating income

25%

0 to 100%

83%

259,628

Quantitative objectives* (2/3), of which:

Group recurring net income per share

25%

0 to 100%

100%

311,667

OFCF

25%

0 to 100%

89%

276,407

Total quantitative

2/3

-

88%

1,093,546

Qualitative objectives (1/3)

Qualitative (global)

1/3

0 to 100%

70%

436,333

TOTAL VARIABLE SHARE 1,529,879 the objective concerned, and it reaches its maximum if the objective reaches 111% to 116% of the budget, depending on the objective concerned (with base For each quantitative objective, the corresponding portion of variable compensation becomes payable if from 89% to 90% of the budget is achieved, depending on * corresponding to the objective in question is equal to 0. 100 corresponding to the budget). If actual performance is less than the above mentioned thresholds from 89% to 90%, the portion of variable compensation the budget is based on ambitious objectives that are not always met and the variable compensation’s objectives are therefore challenging. When the budget is met, the variable compensation determined according to all quantitative criteria is 68% of the fixed part of his compensation. Within the Group, 100% - 82%

In all, Mr. Pierre-André de Chalendar’s total compensation (fixed and variable) for fiscal year 2016 represented €2,629,879, an increase of 10.31% over that of 2015.

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SAINT-GOBAIN - REGISTRATION DOCUMENT 2016