On the proposal of the Compensation Committee, the Supervisory Board approved the payment of the full amount of the variable compensation of Steve King, in light of the achievement of the objectives detailed above, and which is amply justified in view of the effort to reduce his salary for the Groupe’s benefit, combined with the attainment of the objectives assigned and achieved on account of the Covid-19 crisis, in accordance with Section 3.2.2.3 of this document (i.e. his ability to manage the crisis by 1. taking care of the health and safety of the Groupe’s employees, 2. maintaining smooth operations, 3. protecting revenue and the client portfolios, 4. rigorously managing costs, and 5. taking appropriate measures for the strict management of resources and the protection of the Groupe’s assets).
The full achievement of the additional crisis management objectives enabled the Groupe to perform well above the industry average, which allowed it to both reimburse employees for salary reductions and increase the variable compensation package of employees (or teams) in order to fairly reward team performance.
In accordance with article L. 22-10-9 (I) (6) and (7) of the French Commercial Code, the table below indicates the ratios of the level of compensation of the executive corporate officers to i) the average compensation on a full-time equivalent basis of employees who are not executive corporate officers and ii) the median compensation on a full-time equivalent basis of employees who are not executive corporate officers; as well as the annual evolution in the compensation of the executive corporate officers, the Company’s performance, the average compensation on a full-time equivalent basis of employees who are not executive corporate officers and the aforementioned ratios, over the past five financial years.
The ratios presented below in accordance with Order no. 2019-1234 of November 27, 2019 were calculated on the basis of the median and average compensation paid to Company employees during the 2016 to 2020 financial years.
Publicis Groupe SA currently employs only one person. In 2020, the ratio determined at the level of Publicis Groupe SA was 42 compared to the compensation of Maurice Lévy, Chairman of the Supervisory Board(1), 48 compared to the compensation of Arthur Sadoun, Chairman of the Management Board(2), 32 compared to the compensation of Jean-Michel Etienne(3), 22 compared to the compensation of Anne-Gabrielle Heilbronner(4) and 45 compared to the compensation of Steve King(5), members of the Management Board. In accordance with recommendation 26.2 of the Afep-Medef Code, and in line with article L. 22-10-9 (I) (6) of the French Commercial Code, Publicis Groupe has decided to publish in detail the ratios required by law on an expanded scope, representative of the Groupe’s business in France, to which have been added the workforce of all Groupe companies in the United States and the United Kingdom. This scope is economically relevant insofar as it represents the bulk of the Groupe’s payroll (67%) and Groupe revenue (73%), the remainder being spread across other countries worldwide. As a result, the publication of the ratios required on the basis of this expanded scope makes it possible to provide clear information that fully meets the objective of transparency regarding compensation gaps. A scope restricted to France has also been excluded, as it accounts for only 6% of the Groupe’s revenue, 6% of the Groupe’s payroll, and is not representative of its business.
It should be noted that from 2020, the scope now takes into account the Epsilon workforce, the acquisition having taken place in July 2019.
The compensation of the executive corporate officers and employees used for the purposes of the table below includes all items of compensation (fixed and variable) and benefits of any kind paid during the 2016 to 2020 financial years.
The method used to determine and value the components of compensation for executive corporate officers and employees is harmonized.
By analogy, share-based compensation has been taken into account at its acquisition value (i.e. the number of shares acquired during the financial year in question multiplied by the share price on the vesting date) for financial years 2016 to 2020.
Thus, for the financial year 2020, the share-based compensation from the LTIP 2017, the Publicis Sapient and Publicis Epsilon plans were taken into account to determine the total employee compensation for 2020. However, in the case of plans that occur every three years (in particular the LionLead plans, the last allocation of which took place in 2016, and the Directoire (2019-2021) plan, the most recent allocation of which took place in 2019), the amount of share-based compensation determined in the year of definitive release of the shares is allocated in thirds to each of the three years of performance of said plans in order to be economically relevant. Thus, the share-based compensation from the LionLead3 International plan for the benefit of the Groupe’s employees whose shares were delivered in June 2020 was spread in thirds over the three years of plan performance (2016, 2017 and 2018). For corporate officers, share-based compensation from the LionLead3 and LTIP 2016-2018Directoire plans (vesting in 2019) was also spread over the three years of performance, i.e. 2016, 2017 and 2018. These valuations make it possible to reflect the strict performance conditions of our plans and the specific details of the performance shares awarded to our executive corporate officers. It should be noted that from 2021, the allocation of shares to the Groupe’s corporate officers will now be carried out on an annual cycle.
(1) The ratios for the four previous years are 6 for 2016, 6 for 2017, 61 for 2018 and 62 for 2019, compared to the compensation of Ms. Elisabeth Badinter, Chairman of the Supervisory Board until May 31, 2017 and by Mr. Maurice Lévy, Chairman of the Supervisory Board from June 1, 2017.
(2) The ratios for the four previous years are 84 for 2016, 77 for 2017, 59 for 2018 and 51 for 2019, compared to the compensation of Mr. Maurice Lévy, Chairman of the Management Board until May 31, 2017 and of Mr. Arthur Sadoun, Chairman of the Management Board as of June 1, 2017.
(3) The ratios for the four previous years are 55 for 2016, 49 for 2017, 50 for 2018 and 32 for 2019.
(4) The ratios for the four previous years are 39 for 2016, 33 for 2017, 31 for 2018 and 23 for 2019.
(5) The ratios for the four previous years are 88 for 2016, 45 for 2017, 64 for 2018 and 58 for 2019, compared to the compensation of Mr. Kevin Roberts, member of the Management Board until August 31, 2016 and of Mr. Steve King, member of the Management Board as of June 1, 2017.
