Universal Registration Document 2021

The severance payment may only be paid after the determination by the Supervisory Board that the performance conditions had been achieved at the date on which his term as a member of the Management Board ended.

The Supervisory Board reaffirmed that this severance payment and any compensation for a non-compete obligation (see below) may not exceed 12 months of total compensation (fixed and variable compensation paid).

For information, note that these commitments had been authorized by the Supervisory Board on September 12, 2018 and approved by the Combined Shareholders’ Meeting of May 29, 2019 in its eighth resolution for commitments formerly subject to the procedures on related-party agreements.

Non-compete agreement

Steve King is subject to a non-compete obligation in his employment contract with a British subsidiary of the Groupe. This obligation does not give rise to financial consideration as permitted by applicable local regulations.

The Supervisory Board reaffirmed that any severance payment and any compensation for a non-compete obligation may not exceed 12 months of total compensation (fixed and variable compensation paid).

The non-compete agreement was specifically approved by the General Shareholders’ Meeting of May 31, 2017. This agreement remains in force until a decision to the contrary by the Supervisory Board.

It is recalled that the compensation policy for members of the Management Board for the 2021 financial year as well as the items paid or allocated to Steve King in 2020 were approved (91.39% and 94.44% positive votes, respectively) by the General Shareholders’ Meeting of May 26, 2021 (thirteenth and nineteenth resolutions) pursuant to articles L. 22-10-26 II and L. 22-10-34 II of the French Commercial Code (ex-ante and ex-post votes) respectively.

The compensation policy for Steve King for the 2022 financial year will be submitted for approval to the General Shareholders’ Meeting of May 25, 2022 in its tenth resolution pursuant to II of article L. 22-10-26 of the French Commercial Code.

3.2.1.8 Compensation policy applicable to Michel-Alain Proch, member of the Management Board

The compensation policy for Michel-Alain Proch is based on the same items as those for all corporate officers set out in Section 3.2.1.1 and includes the items applicable to Management Board members presented in Section 3.2.1.4 as well as the specific items presented below.

Annual fixed compensation

The gross annual fixed compensation of Michel-Alain Proch is euro 600,000.

The Supervisory Board approved this compensation in line with:

• his profile, experience and skills; and
• the market practices in compensation observed for this level of responsibility in France and for this level of international responsibility in Publicis Groupe’s business sector.

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 2022 financial year.

The variable compensation of Michel-Alain Proch, which, if targets are met, may represent up to 100% of his fixed compensation is based on the following for the 2022 financial year:

• three financial and stock market criteria for 40% of the variable portion, namely organic growth, operating margin and TSR (Total Shareholder Return). To reconcile the terms and conditions of variable compensation for other Groupe executives, the variable compensation for the two criteria relating to organic growth and operating margin, could be increased if the objectives are exceeded, with a cap of 20% on each of these two criteria;
• four quantifiable individual financial and non-financial criteria, for 60% of the variable part:
  • employee expenses: 15%, based on the objective of "fixed personnel costs and freelance costs/revenue” in the annual budget approved by the Supervisory Board in March 2022,
  • cash flow and debt management: 20% based on the objective approved by the Supervisory Board in March 2022,
  • the achievement of All in One and G&A objectives (15%), and
  • Corporate Social Responsibility (CSR) for 10%.

All these criteria, set in advance, are based on quantified, measurable objectives that are made public, with the exception of those that are of a strategic and confidential nature. All these criteria are proposed by the Compensation Committee and validated by the Supervisory Board.

The Committee assesses, in the finest detail, the performance for each objective and each criteria.