Annual variable compensation
The Supervisory Board, on the recommendation of the Compensation Committee, decided on the criteria for the variable compensation of Michel-Alain Proch for the 2021 financial year.
The variable compensation of Michel-Alain Proch, which, if targets are met, may represent up to 100% of his fixed compensation, without exceeding this percentage, is based on the following for the 2021 financial year:
- three financial and Stock Exchange related criteria for 40% of the variable part:
- organic growth based on the Target submitted to the Supervisory Board (see Section 3.2.1.4 “Annual variable compensation”) for 15% (10% if the Commitment (annual budget) is achieved),
- operating margin compared to that of the peer group (see Section 3.2.1.4 “Annual variable compensation”) for 15%, and
- TSR (Total Shareholder Return) for 10%;
- four quantifiable individual financial and non-financial criteria, for 60% of the variable part:
- employee expenses (15%),
- cash and debt management (20%),
- the achievement of All in One and G&A targets (15%), and
- Corporate Social Responsibility (CSR) for 10%. The assessment of the progress of the CSR policy with regard to the 2025 trajectory will be made on the following priorities:
- Diversity, Equality and Inclusion: the trajectory aims for 45% women among key executives in 2025 with a benchmark target of 41% at the end of 2021, and
- Combating climate change: the trajectory aims for 100% of energy from direct renewable sources by 2030 with a benchmark target of around +8% at the end of 2021 compared to 2020.
MICHEL-ALAIN PROCH
Annual variable compensation target for 2021
Financial targets 75%
- Organic growth 15 %
- Operating margin 15 %
- TSR 10 %
- Employee15 %
- Cash flow management 20 %
Non-Financial Quantitative targets 25%
- CSR 10%
- All In One and G&A 15%
Long-term variable share-based compensation
Publicis Groupe decided to set up a new share plan each year for management and certain key employees of the Groupe. As a member of the Management Board, Michel-Alain Proch is eligible for this new plan from 2021. Under this plan, the number of shares that may be delivered at the end of a three-year vesting period (except in the event of death or disability), i.e. in 2024 for the “LTIP 2021 Directoire”, will depend – for 90% of the shares awarded – on Publicis Groupe’s average financial performance over a three-year period (2021-2023) as compared with the financial performance of a peer group comprising WPP, Omnicom, IPG and Publicis Groupe, plus two conditions relating to Corporate Social Responsibility for 10% of the shares awarded.
Assuming the performance conditions are met, entitlement to receive shares is subject to continued employment until the end of the vesting period.
In the event of forced departure or a departure due to a change in control or strategy and except in the event of serious or gross misconduct, shares awarded may be retained prorata temporis, subject to performance conditions.
In the event of retirement, he may, at the end of the vesting period and upon approval by the Supervisory Board, in accordance with the compensation policy approved by shareholders and applicable at that time, receive the shares granted to him prorata temporis.
Benefits in kind
The use of one of the Company cars.
Moreover, Michel-Alain Proch will be covered by the job-loss insurance taken out by Publicis Groupe for its corporate officers, as the French unemployment office (Pôle Emploi) does not cover this.
Collective health and welfare insurance plans
Michel-Alain Proch benefits from cover applicable to executives at his level under the French regime.
Employment contract
Michel-Alain Proch has an employment contract with one of the Groupe’s subsidiaries.
Severance payment
The current commitments to Michel-Alain Proch provide that in the event of a forced departure due to a change in control or strategy and other than in the case of serious or gross misconduct, Michel-Alain Proch would be entitled to a severance payment.
Provided that Michel-Alain Proch does not continue to be employed by Publicis Groupe, the amount of the severance would be equal to one year’s total gross compensation (fixed and variable compensation paid), calculated using the average of the last 24 months of compensation.