AFD_REGISTRATION_DOCUMENT_2017

CORPORATE GOVERNANCE Compensation policy andbpractices

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3.2 COMPENSATION POLICY ANDbPRACTICES 3.2.1 Compensation policy governance ArticlebL.511-89 of the French Monetary Code, resulting in particular from the implementation of the CRDIV directive, requires that banks and financing companies of “significance” establish an Appointments Committee and a Compensation Committee and refers to a decree from the Minister of the Economy for the definition of “significance”. Articleb104bof the decree of 3bNovember 2014buses, as the sole criteria characterising “significance”, the fact that the total company or consolidated balance sheet exceeds €5bbillion, meaning that these provisions apply to AFD, while CRDIV contains provisions that have not been implemented and which would exempt AFD from establishing these committees. However, the establishment of Appointments Committees and Compensation Committees conflicts with certain bylaw and legal provisions and certain organisational principles for State public undertakings that apply to AFD. With regards to Compensation Committees, under the terms of Articleb76-2 and Articleb95-1 of the CRDIV directive regarding Compensation Committees, governments only have to stipulate that Compensation Committees are established in undertakings that are “significant” in terms of their size but also their internal organisation and the nature, scope and complexity of their activities. These derogations and criteria established by the CRDIV directive and ArticlebL.511-89 of the French Monetary Code were not specified in the decree of 3bNovember 2014. It should be noted that the compensation of all AFD Group employees, including the Executive Committee and “individuals whose activities have a significant impact on the company’s risk profile” is determined by AFD’s bylaws. Moreover, no variable compensation is awarded. This particular characteristic of AFD, together with the partial implementation of the CRDIV directive in French law, argues in favour of exempting AFD from establishing a committee which would, ultimately, not have the power to exercise the prerogatives expected by the regulator. The HR function is the only entity involved in designing and implementing the compensation policy. The reason for this is that no AFD Group employee receives variable compensation (except for profit sharing). 3.2.2. Principal compensation policy characteristics 3.2.2.1. Determining compensation The compensation of every AFD Group employee is defined essentially using their salary point: on recruitment, a job level (comprising a range of salary points) is allocated to each individual in accordance with the strict definitions in the Staff Regulations. The salary point value is then determined, within this

range, according to the employee’s age, training and experience (there is a strong internal concept of fairness). 3.2.2.2 Compensation structure Compensation comprises the following elements: P basic salary (Articleb12.1 of the Staff Regulations) For employees on job levels C to G, the basic salary includes, without distinction, all hours worked including overtime. “It is calculated by applying the Caisse Française de Développement value to the salary point. It is monthly and payable in arrears.” (1) P awards and bonuses (Articleb12.2) Added to the basic salary, for employees who fulfil the required conditions, are the following awards and bonuses calculated on a pro rata basis according to hours of work, where the individual’s hours are lower than the collective hours of work: year-end bonus (12.2.1) This will be calculated on December’s base salary as defined in Articleb12.1 and multiplied by 1.4. For each employee, it is in accordance with the number of paid days over the year, holiday bonus (12.2.2) The amount is identical for every employee. It is paid in three instalments: 20% at the end of February, 50% at the end of May and 30% at the end of August. For each employee, it is in accordance with the number of paid days during the period 1bJune to 31bMay, P dependent child(ren) and ascendant(s) family supplement (12.2.3) This is defined by a scale indexed to the value of the salary point, P P This is related to holding a type of position and is paid to every employee who holds this type of position. The types of positions in question and the corresponding bonus amounts are decided by the Chief Executive Officer. The bonus stops being paid in the event of a transfer to a position not covered by the professional bonus, The company may, on an exceptional basis, pay personal compensation supplements, on a provisional basis, other than those described above, primarily in accordance with the specific positions held or to address exceptional situations. These personal compensation supplements are paid for as long as the reason for their being awarded continues. Management will inform the Employee- Management Committees provided for in Articleb58bof the Regulations about measures taken in this respect; P personal supplement (12.2.6) P long service bonus (12.2.4) Employees on job levels A to C are awarded a long service bonus defined by a scale negotiated with the trade union organisations, P professional bonus (12.2.5)

(1) Extract from Staff Regulations

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REGISTRATION DOCUMENT 2017

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