In addition, as indicated in Section 3.2.1.1 and in the exceptional context of the Covid-19 pandemic, the assessment of the performance of Arthur Sadoun for the year 2020 will take into account his ability to manage the crisis, will take into account his ability to manage the crisis without modifying his overall variable compensation as a percentage of the fixed compensation: ensure the health and safety of the Groupe’s employees, maintain smooth operations, protect client’s revenue and portfolios, rigorously manage costs, take appropriate measures for the strict management of resources and the protection of the Groupe’s assets.
The Chair of the Management Board may receive long-term variable share-based compensation. For the purposes of illustration, Arthur Sadoun joined the LTIP 2019-2021 Directoire performance shares plan. The number of shares that may be delivered in 2022 at the end of a three-year vesting period (except in the event of death or disability), will depend – for 90% of the shares awarded – on Publicis Groupe’s average financial performance over a three-year period (2019-2021) as compared with the average financial performance of a peer group comprising WPP, Omnicom, IPG and Publicis Groupe, plus a CSR condition for 10% of the shares awarded. Assuming the performance conditions are met, entitlement to receive shares is subject to continued employment until the end of the vesting period.
Any entitlement to receive shares under the LTIP 2019-2021 Directoire plan will be lost upon resignation. In the event of forced departure or a departure due to a change in control or strategy and except in the event of serious or gross misconduct, shares awarded more than two years prior may be retained prorata temporis, subject to performance conditions.
In the event of retirement, he may, at the end of the vesting period and upon approval by the Supervisory Board, in accordance with the compensation policy approved by shareholders and applicable at that time, receive the shares granted to him more than two years prior prorata temporis.
The Chair of the Management Board receives some benefits in kind. Arthur Sadoun benefits from the use of a taxi firm and get a refund for his taxis and entertainment expenses.
Arthur Sadoun benefits from the coverage applicable to executives at his level under the French system.
The Chair of the Management Board cannot have an employment contract with the Company. Arthur Sadoun’s employment contract with Publicis Conseil dated December 5, 2006 was terminated when he was appointed Chair of the Management Board.
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, Arthur Sadoun would be entitled to a severance payment.
The amount of the payment would be equal to one year of total gross compensation (fixed and variable portion 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, the payment of the severance amount 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 Arthur Sadoun 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.
