LOREAL_Registration_Document_2017

2 Corporate governance *

REMUNERATION OF THE EXECUTIVE OFFICERS

Policy with regard to fixed and 2.5.1.2. variable remuneration and grant of performance shares The allocation key for the annual remuneration The executive officer’s annual remuneration consists of fixed remuneration, annual variable remuneration and the grant of performance shares. It does not include any exceptional components. The Board of Directors adopts the various components of this remuneration, paying attention to the necessary balance between each of them.

Each component of annual remuneration corresponds to a well-defined and clearly substantiated objective. The various components of annual remuneration form a balanced whole with a breakdown that is approximately: 50/50 between fixed and annual variable remuneration on s the one hand and long-term remuneration (performance shares) on the other; 50/50 between cash remuneration and share-based s remuneration; 75/25 between remuneration subject to performance s conditions and remuneration not subject to performance conditions.

DIAGRAM SHOWING THE BALANCE BETWEEN THE DIFFERENT COMPONENTS OF ANNUAL REMUNERATION

75% of remuneration subject to performance conditions

25% of remuneration not subject to performance conditions

Annual variable remuneration 25% Fixed Remuneration 25%

Performance shares 50%

50% share-based remuneration: long-term remuneration

50% cash remuneration: annual remuneration

N.B.: the employer’s contributions to the additional social protection plans are to be added to the above.

It must not lead to taking inappropriate, excessive risks. For this purpose, it must remain reasonable in comparison with the fixed portion. It is designed to align the remuneration allocated to the executive officer with the Group’s annual performance and to promote the implementation of its strategy year after year. The variable remuneration is based on precise performance appraisal criteria determined at the beginning of the year by the Board of Directors. It consists for 60%, of financial criteria that are directly correlated with the Company’s performance indicators: growth in like-for-like sales as compared to the budget; s

Fixed remuneration The fixed remuneration must reflect the responsibilities of the executive officer, his level of experience and his skills. It is stable for several years and may be re-examined at the time of renewal of the term of office. It serves as a basis to determine the maximum percentage of annual variable remuneration. Annual variable remuneration Annual variable remuneration is expressed as a percentage of fixed remuneration and can amount to up to a maximum of 100% of the fixed remuneration.

REGISTRATION DOCUMENT / L'ORÉAL 2017

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