In accordance with applicable legal and regulatory provisions, this section sets out the compensation policy for corporate officers for the 2020 financial year as well as the items of compensation for corporate officers for the 2019 financial year.
Pursuant to article L. 225-82-2 of the French Commercial Code, the General Shareholders’ Meeting of May 27, 2020 will be asked to approve the compensation policy for corporate officers for the 2020 financial year. To this end, four resolutions are tabled for the members of the Supervisory Board, the Chair of the Supervisory Board, the members of the Management Board and the Chair of the Management Board, respectively. As required by law, the General Shareholders’ Meeting will be asked to vote on this policy at least once a year as well as whenever there is a major change to the compensation policy. In exceptional circumstances, the Supervisory Board may derogate from the compensation policy where this is temporary, in the best interests of the Company and necessary to ensure the Company’s long-term future and viability.
The compensation policy for corporate officers is determined by the Supervisory Board on the back of proposals from the Compensation Committee. The Compensation Committee plays a key role in determining the compensation policy and the individual decisions. In this regard, the Compensation Committee meets at least once a year to review the compensation policy for corporate officers, confirm the quantitative and qualitative performance results from the previous year and determine the new performance criteria for the current year. To this end, the Compensation Committee bases itself in particular on the work done and presented by the Secretary General.
It specifically looks at past practices in terms of the compensation of corporate officers, looks at external benchmarks as well as the terms and conditions of compensation and employment of employees and other managers within the Groupe. In addition, the Compensation Committee takes various measures to avoid or manage conflicts of interest. Composed of 80% independent members in 2019 (see Section 3.1.3.9 “The Supervisory Board’s Specialized Committees”), it ensures the application of the Supervisory Board’s internal rules, notably by asking its members to report any conflicts of interest and, if such a conflict arises, by verifying that the persons concerned abstain from participating in the debate or vote on the matter, that they do not request or communicate any information relating thereto, or that they resign from their position (see Section 3.1.1.4 “No convictions for fraud or conflicts of interest”).
The resulting policy is then submitted to the Supervisory Board before being voted on by the General Shareholders’ Meeting. This policy is adopted once the Supervisory Board has ensured i) that it is in line with the best interests of Publicis Groupe while ensuring that it is attractive and competitive to make it possible to attract and retain top talent and ii) that it will contribute to the Groupe’s long-term future while at the same time serving the commercial strategy set out in section 1.3.2 of this document.
In this regard, the compensation policy is built on a fair balance between the items of compensation (fixed compensation, target variable compensation and performance shares) to reflect market practices and incorporate the Groupe’s performance criteria over the medium to long-term. The financial criteria (namely organic growth and operating margin), and the Groupe’s structural projects (in particular the Groupe’s digital transformation and reorganisation), represent a key part in the variable compensation of corporate officers.
In line with the decision of the Supervisory Board, and in addition to the exceptional items related to the Covid-19 pandemic described below in the section “Exceptional items related to the Covid-19 pandemic”, it should be noted that the following substantial changes were made to the compensation policy compared to the compensation principles and criteria approved by shareholders at the last General Shareholders’ Meeting on May 29, 2019:
The Supervisory Board made substantial changes to the non-financial criteria applicable to Steve King, in particular, taking his new European role into consideration. Steve King’s bonus objectives are, therefore, related to the setting up of an effective, clear and robust management in Europe, with specific targets for each individuals, relating to the impact that the cross-fertilization of skills between countries and disciplines may have on growth and the implementation of global services.
