2020 Annual Financial Report

In accordance with the decision of the Supervisory Board, it is specified that the following changes have been made to the compensation policy in relation to the compensation principles and criteria voted on by the shareholders at the last General Shareholders’ Meeting of May 27, 2020:

• the Supervisory Board of November 25, 2020 decided to appoint Michel-Alain Proch to the Groupe Management Board to replace Jean-Michel Etienne whose term of office ended, as scheduled, on December 31, 2020. Michel-Alain Proch joined the Groupe on January 15, 2021 and took over the operational functions as Groupe Chief Financial Officer covering the entire scope of Jean-Michel Etienne’s duties in early February. The compensation policy applicable to Michel-Alain Proch is described in Section 3.2.1.8 of this document;
• within the framework of the provisions of the severance payment applicable to each member of the Management Board, the conditions for retaining the rights to free shares have been strictly aligned with the constraints imposed by the Afep-Medef Code and best market practices. Thus, in the event of forced departure, the corporate officer may retain the performance shares allocated to him/her prorata temporis;
• for Steve King, the Supervisory Board reviewed his financial and non-financial objectives for 2021 in particular to take into account his role in Europe and the reorganization of the Groupe towards P&L responsibility at country level;
• the criterion linked to the organic growth of the Company’s net revenues in the calculation of the annual variable portion was modified to set the maximum payment threshold based on the achievement of the Target threshold, which is set at more than 30% above the Commitment (annual budget), as has been done across the Groupe to mobilize all teams to achieve high organic growth in 2021;
• under the proposal to renew the term of office of Maurice Lévy as Chairman of the Supervisory Board, Maurice Lévy has proposed that his compensation be reduced. It would be set at euro 1,300,000 gross from 2021 (while it was nominally set at euro 1,900,000 previously).

Terms of the compensation policy applicable to all corporate officers

Generally speaking, Publicis Groupe has introduced a stringent compensation policy designed to motivate employees so that they make their best contribution to the achievement of the Groupe’s strategic objectives and to ensure long-term performance. The compensation structure is communicated to employees, shareholders and investors in a clear and transparent manner. Publicis Groupe refers to the recommendations of the Afep-Medef Code.

The compensation policy for corporate officers is based on the same principles as those applicable to employees: clarity, competitiveness (vis-à-vis competitors and in the markets in which Publicis Groupe operates), internal fairness, performance incentives and gender equality. The structure of compensation is based on the position and responsibilities within the Groupe and combines the following elements: the base salary (reflecting experience and responsibilities), the variable compensation (which remunerates performance during the year) and awards of performance shares, in particular (recognizing and encouraging the contribution to the Groupe’s medium- and long-term performance on the basis of measurable criteria).

The compensation policy sets out the measurement methods to be applied to corporate officers to determine the extent to which they have satisfied the performance criteria specified for variable compensation and share-based compensation. To determine the extent to which corporate officers have satisfied these performance criteria, the Supervisory Board draws on the proposals and work of the Compensation Committee, which prepares and checks, with the support in particular of the Secretary General and of the Groupe Chief Financial Officer, the performance of each officer on each of the criteria in relation to the objectives set. These checks are documented and made available to the members of the Supervisory Board.

The criteria used to distribute the annual fixed sum allocated by the General Shareholders’ Meeting to Supervisory Board members are set out in Section 3.2.1.2 of this document.

The principles of the compensation policy applicable to corporate officers, subject to approval by the General Shareholders’ Meeting on May 26, 2021, are also intended to apply to newly-appointed corporate officers or those who are reappointed at the General Shareholders’ Meeting. For the Chairman of the Supervisory Board and the Chairman of the Management Board and the newly appointed members of the Management Board, the Supervisory Board may, on the proposal of the Compensation Committee, temporarily decide on the fixed and variable compensation of the newly-appointed corporate officer, taking into account, in particular, his or her profile and experience. This decision must be in the best interests of the Company and necessary to ensure the Groupe’s long-term future and/or viability.