Steve King benefits from a severance payment and the terms of the non-compete agreement as they appear in his employment contract with one of the Groupe’s subsidiaries in the United Kingdom. No other compensation will be due. In the event of a forced departure due to a change in control or strategy and other than in the case of serious or gross misconduct, Steve King would be entitled to this single severance payment. Provided that Steve King does not continue to be employed by Publicis Groupe, the amount of the severance would be equal to one year’s total gross compensation (fixed and variable compensation paid), calculated using the average of the latest 24 months of compensation.
He would also have the right to exercise the options to subscribe to and/or to purchase the shares that have been awarded to him, and to retain the performance shares already granted to him prorata temporis more than two years prior, subject to the performance conditions set out in the regulations for the plan in question being satisfied. In addition, this severance payment would be subject to a performance condition: the severance amount would only be due in its full amount if the average annual amount of the variable compensation acquired by Steve King for the three years prior to the termination of his duties is equal to at least 75% of his “target variable compensation”. If the average annual amount is less than 25% of the “target variable compensation”, no sum or benefits will be due. If the average annual amount is between 25% and 75% of the “target variable compensation”, payments and benefits will be calculated on a proportional basis between 0% and 100% using the rule of three.
The severance payment may only be paid after the determination by the Supervisory Board that the performance conditions had been achieved at the date on which his term as a member of the Management Board ended. The Supervisory Board reaffirmed that this severance payment and any compensation for a non-compete obligation (see below) may not exceed 12 months of total compensation (fixed and variable compensation paid). These commitments were authorized by the Supervisory Board on September 12, 2018 and approved by the Combined Ordinary and Extraordinary Shareholders’ Meeting of May 29, 2019 in its eighth resolution for commitments formerly subject to the procedures on related-party agreements.
Steve King is subject to a non-compete obligation in his employment contract with a British subsidiary of the Group. This obligation does not give rise to financial consideration as permitted by applicable local regulations. The Supervisory Board reaffirmed that any severance payment and any compensation for a non-compete obligation may not exceed 12 months of total compensation (fixed and variable compensation paid). The non-compete agreement was specifically approved by the General Shareholders’ Meeting of May 31, 2017. This agreement remains in force until a decision to the contrary by the Supervisory Board. The compensation policy for Management Board members in respect of the 2020 financial year will be subject to approval by the General Shareholders’ Meeting of May 27, 2020 in its ninth resolution pursuant to article L. 225-82-2 (II) of the French Commercial Code.
The compensation policy for the Chair 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 items applicable to Management Board members presented in Section 3.2.1.4 as well as the specific items submitted below.
The Chair of the Management Board receives fixed compensation in consideration for his role. The gross annual compensation of Arthur Sadoun as Chair of the Management Board of Publicis Groupe SA amounts to euro 1,000,000 per year, unchanged since June 1st 2017. In the exceptional environment of the Covid-19 pandemic, Arthur Sadoun informed the Company of his decision to relinquish 30% of his fixed compensation for a period of six months starting in April 2020. The Company has duly noted Arthur Sadoun’s decision, which leaves unchanged and has no effect on the Company’s other obligations to him.
The Chair of the Management Board may receive annual variable compensation. The Supervisory Board, upon the recommendation of the Compensation Committee, decided on the criteria for the variable compensation of Arthur Sadoun for the 2020 financial year. The variable compensation of Arthur Sadoun, which, if targets are met, may represent up to 200% of his fixed compensation, without exceeding this percentage, is based on the following for the 2020 financial year:
