The fixed compensation is determined by taking into account:
The level of fixed compensation is reviewed every two years for Management Board members and other Groupe executives in order to regularly assess its relevance and competitiveness.
Compensation for Management Board members is generally reassessed at relatively long intervals, in accordance with the Afep-Medef Corporate Governance Code recommendations, and when such a revision is justified, for example in the event of a change in scope or an adjustment relative to market practices or internal practices.
The annual variable compensation is intended to represent a substantial, but not predominant, portion (from 25% to 35%), of the total annual compensation of the Management Board member, if objectives set are achieved. It encourages overperformance as a specific reward is paid when the objectives are exceeded.
Annual variable compensation is subject to measurable performance conditions for both financial and non-financial objectives.
No minimum amount is guaranteed. Annual variable compensation is calculated, if applicable, on a prorata basis for the year of the start of the term of office to the year of the end of the term of office.
It is based on several criteria whose performance is measurable. These criteria are assessed separately and take into account:
These parameters are determined in advance for each financial year and proposed by the Compensation Committee to the Supervisory Board for approval.
The share-based compensation program is meant to incentivize on a long-term basis. It is subject to stringent performance conditions to develop loyalty and encourage the organization’s key talent over the long-term and common interests with Publicis Groupe SA shareholders (see Section 6.6 Note 32 to the consolidated financial statements).
The performance shares are not only intended to incentivize executive corporate officers over the long-term but also to retain them and to help align their interests with the best interests of the Company and shareholders.
The members of the Management Board may therefore receive compensation in the form of Publicis Groupe shares, specifying that the allocation of shares is subject to performance and continued presence conditions to be met over a period generally set at three years.
With a view to clarifying their compensation structure, and aligning their interests even more closely with those of the company and its shareholders and their compensation with that of the other Groupe executives, since 2021 the members of the Management Board benefit from a regular performance share plan known as the “LTIP Directoire”. An initial allocation of shares is made each year, but they only vest after three years and then only in accordance with the achievement of stringent objectives. Like the LTIP set up for certain key employees of the Groupe, the members of the Management Board will be able to benefit from an allocation of performance shares each year, in order to align with market practices in terms of performance share allocation. The value of performance shares granted under the LTIP Directoire represents, at the time of the grant, 200% of the fixed compensation for members of the Management Board. In order to bring the Chairman of the Management Board’s multi-year variable compensation more in line with that of our peers, particularly in the United Kingdom and the United States, the value of the performance shares awarded to the Chairman of the Management Board represents, at the time of the allocation, 300% of his fixed compensation. The acquisition of Publicis Groupe shares is subject to performance criteria that are measured following a three-year period, such that the total number of shares delivered will depend on the level of achievement of financial performance objectives, namely achieving a certain rate of weighted organic growth and an operating margin compared to a peer group of companies competing with Publicis Groupe. Since 2019, some of the allocated Publicis Groupe shares awarded are also subject to a criteria relating to Corporate Social Responsibility. From 2022, Publicis Groupe SA shares allocated to the Chairman of the Management Board are also subject to a relative TSR criterion (Total Shareholder Return) and to CSR criteria completed by a Talent management criterion, which is a strategic and material stake for the Groupe. The number of shares actually awarded is determined in accordance with the level of attainment of these performance targets. Moreover, the vesting of Publicis Groupe shares is also subject to the fulfillment of continued presence during the three-year vesting period.
