Annual variable compensation to be paid in 2020 for financial year 2019
The variable part of Arthur Sadoun’s compensation, which, if targets are met, may represent up to 200% of his fixed compensation, without exceeding this percentage, for financial year 2019, is based on quantitative financial and stock exchange performance
criteria, essentially based on a comparison with the performance of the main competitors of Publicis Groupe (Omnicom, WPP and IPG) and on qualitative non-financial individual performance criteria considered as major for the development of the Groupe.
The compensation of the Chair of the Management Board for 2019 is thus based on two types of criteria:
- three quantitative criteria, including two financial criteria and a value creation criterion corresponding to 75% of the overall weight of the criteria, taking into account development of the growth and profitability of Publicis Groupe compared with that of a peer group consisting of the three other leading global communication groups (Omnicom, WPP and IPG):
- the Groupe’s organic revenue growth, compared to a peer group, for 25%. If Publicis Groupe posts the best growth, 100% of the variable compensation on this criterion will be attributed. If Publicis Groupe reports the second-best margin, 75% of the variable compensation will be attributed. If Publicis Groupe reports the third-best margin, 50% or 30% of the variable compensation will be attributed depending on the difference with the second-best performance: if the difference is low (< 10%), 50% of the variable compensation may be attributed and if the difference is high (> 15%), 30% will be attributed. For a difference between 10% and 15%, the Committee will decide the variable compensation percentage that may be attributed,
- the operating margin (the highest in the market) for 25%. If Publicis Groupe posts the best margin, 100% of the variable compensation for this criterion will be attributed. If Publicis Groupe reports the second-best margin, 75% of the variable compensation will be attributed. If Publicis Groupe reports the third-best margin, 50% or 30% of the variable compensation will be attributed depending on the difference with the second-best performance: if the difference is low (< 10%), 50% of the variable compensation may be attributed and if the difference is high (> 15%), 30% will be attributed. For a difference between 10% and 15%, the Committee will decide the variable compensation percentage that may be attributed, and
- for 25%, the rate of change of the Groupe’s net income per diluted share (earnings per share or “EPS”), comparing the EPS of the financial year and the average EPS of the two previous financial years; and the TSR (Total Shareholder Return) which reflects the variation of the share price of Publicis Groupe SA between the start and the end of the financial year under review (on the basis of the average of the first listed share prices recorded in the last 20 trading sessions in the year, compared to the average of the first listed share prices in the first 20 trading sessions of the year), increased by the amount of the dividends paid during the financial year. This criterion is directly linked to the interests of shareholders.
