2020 Annual Financial Report

• to propose to the Supervisory Board the draft resolutions, to be submitted to the General Shareholders’ Meeting, on the compensation policy for corporate officers, the information relating to this compensation and the elements comprising this compensation;
• to approve, prior to any decision by the Management Board, the conditions for fixed, variable and exceptional compensation making up the total compensation and other benefits of Head Office executives, members of the Management Committee, Executive Committees of the major countries and practices. In the event of an emergency, the decision on the compensation conditions of these directors is taken jointly by the Chairman of the Management Board and the Chairman of the Supervisory Board which will inform the Committee after they have made the decision. In addition, the Committee is informed of the decisions on the compensation conditions of country Executive Committee members;
• in general terms, approving, prior to any decision of the Board, the variable compensation systems, and policies in the area of compensation, awarding of stock options, free shares or performance shares, or any similar instrument.

The Compensation Committee currently has five members including four independent members: André Kudelski (independent member), Chairman, Antonella Mei-Pochtler (independent member), Cherie Nursalim (independent member), Thomas H. Glocer (independent member) and Maurice Lévy. Michel Cicurel assists the Committee as a permanent expert.

There was no change to the composition of the Compensation Committee in 2020. At the time of her appointment, Patricia Velay-Borrini was asked to join the Compensation Committee. She preferred to join the Nominating Committee, at least during the first year of her term of office.

In 2020, the Committee reviewed issues related to the compensation of Management Board members (fixed and variable portions) and the Chairman of the Supervisory Board (fixed compensation) and proposed to the Supervisory Board related decisions to be taken in view of the economic developments related to the Covid-19 pandemic. The Committee expressed its opinion on the decisions to be taken to include the health crisis and its consequences in the calculation of the variable portions for 2020 and on the mechanism of variable portions for 2020 for the entire Groupe. The Committee reviewed the calculation method and the scope for comparing the compensation of executive corporate officers with the Company’s performance and the average and median compensation of employees. The Committee was consulted on the share-based compensation policy. It was informed of the share plans awarded and delivered in 2020. The Committee was informed of the temporary salary reductions granted voluntarily by the Groupe’s managers and employees. These measures are part of the savings efforts implemented throughout the Groupe. The Committee was kept informed of reimbursements made for everyone except Anne-Gabrielle Heilbronner, Maurice Lévy, Arthur Sadoun and Steve King. The Committee was also informed of the points of attention noted in the reports of the proxy advisory firms or addressed during the discussions with the shareholders prior to the General Shareholders’ Meeting of May 27, 2020. The principles of a new variable compensation plan for 2021, which is intended to become the Groupe’s single plan, were submitted to the Committee. The Committee was informed of the compensation of Patricia Velay-Borrini, who was appointed by the Groupe Works Council to join the Supervisory Board as the second member representing employees. The Committee was kept informed of increases for members of the country Executive Committees. The Committee was informed of the compensation and contractual aspects relating to
Michel-Alain Proch, a new member of the Management Board from January 15, 2021, replacing Jean-Michel Etienne.

Strategy and Risk Committee

The Strategy and Risk Committee is governed by article 9 et seq. of the Supervisory Board’s internal rules.

The missions of the Strategy and Risk Committee with regard to the Supervisory Board are as follows:

• to examine (in coordination with the Audit Committee), the risks to which the Company is exposed and the policies and corrective measures that will allow it to control and reduce these risks;
• to review the major strategic and growth options available to the Groupe and decide whether or not they are implemented with respect to transactions likely to affect the Groupe’s strategy as a whole;
• to examine the Groupe’s Corporate Social and Environmental Responsibility (CSR) strategy and the options selected to implement this strategy.

The Strategy and Risk Committee has seven members including four independent members and one member representing employees: Marie-Josée Kravis (independent member), Chairman, Élisabeth Badinter, Suzan LeVine (independent member), Thomas H. Glocer (independent member), Enrico Letta (independent member), Maurice Lévy and Pierre Pénicaud (member representing employees).

There was no change to the composition of the Strategy and Risk Committee in 2020.

During 2020, the Committee was informed of the situation related to Covid-19, on the vigilance and measures taken by Publicis Groupe to ensure the safety and health of employees, support talent and protect teleworking from cyberattacks, and the economic risks of the health crisis. The Committee reexamined the risks facing the Company and the policies making it possible to control or reduce them, the Groupe’s corporate and social responsibility (CSR) strategy and the options adopted when implementing this strategy as well as the major strategic options and development opportunities available to the Groupe. The Committee took note of the report on stakeholder engagement, which was drawn up on the basis of informal consultations with clients, employees and shareholders on topics relating in particular to diversity, data and the Groupe’s support for its clients to accompany them in their CSR transformation and climate change. The Committee focused on diversity and climate change. It was informed of the appointment of a new Director of Diversity and Inclusion in the United States and the creation of a Steering Committee on Diversity and Inclusion for the Groupe composed of representatives from the 10 key countries. The Committee was informed of the Publicis Groupe action plan to contribute to the fight against global warming.

The Committee reviewed the risk mapping. Risks are generally on the rise. Competitive pressure on talent and clients has intensified. The Committee examined in particular the risks related to data protection and personal data privacy. These risks are very present as well as operational and geopolitical risks. The Committee updated the specific corruption and influence peddling risk mapping that is used for controls and audits. Risks of corruption and influence peddling remain low within the Groupe. The Committee was informed of the implementation of the action plan relating to duty of care and updated the risk mapping specific to the duty of care plan. The Committee examined the Groupe’s strategic priorities and related execution risks.