2019 Annual financial report

The compensation policy for the Chair of the Supervisory Board in respect of the 2020 financial year will be subject to approval by the General Shareholders’ Meeting of May 27, 2020 in its sixth resolution pursuant to article L. 225-82-2 (II) of the French Commercial Code. In the exceptional environment of the Covid-19 pandemic, Maurice Lévy informed the Company of his decision to reduce his annual compensation by 30%. 

3.2.1.4 Compensation policy for members of the Management Board 

The compensation policy for the members of the Management Board is based on the same items as all corporate officers set out in Section 3.2.1.1 and includes the specific items submitted below. In accordance with article 10 IV of the Company’s bylaws, compensation for the Chair and members of the Management Board is set by the Supervisory Board and reviewed on the recommendation of the Compensation Committee. For members of the Management Board other than the Chair, the Chair of the Management Board shall make proposals to the Compensation Committee. 

The compensation policy of the Publicis Groupe Management Board aims to align the interests of the Groupe’s Executives with those of the shareholders by establishing a strong link between performance and compensation. Within this context, its essential purpose is to encourage the achievement of ambitious objectives and create value on a long-term basis, by setting stringent performance criteria. 

In order to do so, the compensation structure of the Publicis Groupe executives is based on fixed compensation and on annual and multi-year variable compensation directly linked to their individual performance as well as their contribution to Groupe performance. 

Furthermore, it is based on an analysis (using the services of external consultants where necessary) of market trends observed in France and abroad, both in major international companies in general and, more specifically, in the companies competing with Publicis Groupe in terms of both business and talents. The main competitors of Publicis Groupe are American and British companies. This compensation policy is based on the following objectives: 

• attract, develop, retain and motivate the most talented individuals in a business sector/industry fundamentally based on the quality of employees, and where competition for talent is particularly fierce, especially in the context of the digital transformation, underway throughout the industry; 
• encourage the management to achieve a level of performance which is high, growing and long-lasting within a very competitive environment, where new players from consulting or technological firms have become direct competitors of Publicis Groupe. It is guided by three principles: 
• competitive and coherent compensation package with regard to market trends;
• internal equity, based on individual and collective performance, in order to ensure fair and balanced compensation reflecting the level of individual success of each person, measured both quantitatively and qualitatively; 
• achieving all the short, medium and long-term financial and operating results directly linked with the Groupe’s strategic objectives and for the benefit of all stakeholders, our clients, our employees, our shareholders and all stakeholders. 

These principles apply to all Groupe executives and are adapted based on the geographical location of the individuals, taking into consideration the differences in terms of regulations, market practices and competitive environment. 

Components of the compensation of the members of the Management Board 

Management Board members’ compensation comprises (i) a fixed portion, as well as (ii) a predominant variable portion, primarily based on performance and alignment of their interests with those of the Company and its shareholders. 

This variable compensation is made up of annual variable compensation and long-term variable compensation in the form of performance shares and/or stock options. This compensation structure applicable to the members of the Management Board is in line with that proposed to the Groupe’s top executives.