2020 Annual Financial Report

Chapter 3 : Governance and compensation

Type of plan

LTIP 2019-2021 Directoire

  

Performance conditions

Performance conditions

LTIP 2019-2021 Directoire

Organic growth rate of Publicis Groupe compared to a peer group

Performance conditions

 

Operating margin of Publicis Groupe compared to a peer group

Performance conditions

 

A CSR criterion

Type of performance conditions

Type of performance conditions

LTIP 2019-2021 Directoire

Relative performance compared with the peer group Omnicom, WPP, IPG, Publicis Groupe

Type of performance conditions

 

 

Type of performance conditions

 

 

Weighting

Weighting

LTIP 2019-2021 Directoire

45% of shares awarded

Weighting

 

45% of shares awarded

Weighting

 

10% of shares awarded

Acquisition

Acquisition

LTIP 2019-2021 Directoire

  • Highest organic growth rate compared to the peer group: 100% of the shares delivered;
  • Growth rate in 2nd position: 75% of the shares delivered;
  • Growth rate in 3rd position: 50% or 30% of the shares delivered depending on the difference with the 2nd position: if the difference is minimal (<10%), 50% may be delivered, and if the difference is significant (>15%), 30% will be delivered. For a difference between 10% and 15%, the Compensation Committee, with the approval of the Supervisory Board, will decide the percentage of the shares that may be delivered.

Acquisition

 

  • Highest operating margin compared to the peer group: 100% of the shares delivered;
  • Margin in 2nd position: 75% of the shares delivered;
  • Margin in 3rd position: 50% or 30% of the shares delivered depending on the difference with the 2nd position: if the difference is minimal (<10%), 50% may be delivered, and if the difference is significant (>15%), 30% will be delivered. For a difference between 10% and 15%, the Compensation Committee, with the approval of the Supervisory Board, will decide the percentage of the shares that may be delivered.

Acquisition

 

  • 10% of the shares awarded will be delivered if the CSR performance condition is met: at least 40% of women on the Executive Committees of the Groupe, Solutions and major countries

Performance period

Performance period

LTIP 2019-2021 Directoire

Following a three-year period at the end of which performance is calculated

Performance period

 

 

Performance period

 

 

Stringent criteria

Publicis Groupe strives to use appropriate and ambitious criteria. These criteria are based on a quantifiable, performance-related assessment (encouraging Publicis Groupe management to deliver the best results in the market) as well as complete transparency, results being measured against public data. These decisions turn the plans into a tool for motivating and retaining Publicis Groupe management. The historic rates of achievement of performance conditions for the various plans that have been established show how relevant and extremely ambitious the criteria used are, making it possible to align Groupe and shareholder interests over the long term.

As an illustration, the rates of achievement of performance conditions for plans awarded in 2013 and 2016 demonstrate that grants are based on strict conditions and that they are consistent with shareholders’ interests over the long-term.

Plan2013-2015 LionLead22013-2015 LTIP Directoire2016-2018 LTIP Directoire2016-2018 LionLead3

Achievement rate

Achievement rate

2013-2015 LionLead2

50%

Achievement rate

2013-2015 LTIP Directoire

53.2 %

Achievement rate

2016-2018 LTIP Directoire

50%

Achievement rate

2016-2018 LionLead3

75%

The shares of the LTIP 2019-2021 Directoire and LTIP 2021 Directoire plans will be delivered, subject to final validation and external appraisal of the performance conditions, on June 14, 2022 for the LTIP 2019-2021 Directoire and March 16, 2024 with respect to the LTIP 2021 Directoire.

Stability of the performance conditions

The Supervisory Board considers that consistency in the performance conditions helps to create long-term value. This is why the performance criteria concerning organic revenue growth and the Groupe’s operating margin have been used since 2003 in long-term compensation programs and for annual variable portions.

In accordance with the Afep-Medef Corporate Governance Code revised in June 2018, a CSR criterion was introduced in 2019.

Uniqueness of the performance conditions

The same performance conditions have been used to date for all of the Groupe’s long-term compensation programs, whether they relate to Management Board members or other executives. The main objective is to align the interests of the entire management team with the Groupe’s strategic objectives.