The shares of the LTIP 2019-2021 Directoire will be delivered on June 14, 2022. Given the rate of achievement of the performance conditions, the number of shares to be delivered corresponds to 41,100 for Arthur Sadoun and 20,600 for Jean-Michel Etienne(1), 13,700 for Anne-Gabrielle Heilbronner and 34,250 for Steve King. The shares of the LTIP 2021 Directoire, LTIP 2022 Members of the Directoire and LTIP 2022 Président du Directoire plans will be delivered, subject to final validation and external appraisal of the performance conditions, on March 18, 2024 for the LTIP 2021 Directoire and on March 19, 2025 for the LTIP 2022 Members of the Directoire and LTIP 2022 Président du Directoire plans.
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. The Supervisory Board has chosen to use these two criteria, which are essential in the sector, to underline the importance of these priority indicators and drivers of the Groupe’s financial viability and profitability. This is to ensure that short-term gains are not made to the detriment of long-term results. For the Chairman of the Management Board, the TSR criterion (Total Shareholder Return), in line with shareholders’ expectations, was removed from the annual variable compensation objectives in order to be included in the LTIP objectives and assessed over a period of three years against CAC 40 companies, and a criterion related to the Talent management was introduced in addition to the Corporate Social Responsibility (CSR) criteria, given the strategic and material nature of this stake for Publicis Groupe.
In accordance with the Afep-Medef Code revised in June 2018, CSR criteria have been introduced since 2019.
The performance conditions used are the same for all of the Groupe’s long-term compensation programs, whether they concern members of the Management Board or other executives, with the exception of the introduction, for the Chairman of the Management Board, of a performance criterion linked to the TSR (Total Shareholder Return) and elements related to Talent management. The main objective is to align the interests of the entire management team with the Groupe’s strategic objectives.
In order to favor the retention of members of the Management Board, no shares are acquired by the beneficiaries before the end of a continued presence condition in the Groupe, and subject to the performance conditions being satisfied. This vesting period is three years.
Except in the specific case of death, disability or retirement, or in exceptional circumstances explained by the Supervisory Board and made public, the acquisition of shares is subject to compliance with the continued presence condition for Management Board members until the end of the vesting period.
This condition may only be waived upon recommendation of the Supervisory Board after obtaining the opinion of the Compensation Committee.
Publicis Groupe share awards to Management Board members are limited to 0.3% of the Company’s share capital, a ceiling that also applies to stock options. For information, this ceiling is a long way from being reached. The total number of shares granted before performance under the authorization granted by the General Shareholders’ Meeting of May 26, 2021 in its twenty-second resolution currently represents 0.05% of share capital (including the awards carried out in March 2022).
The Supervisory Board has decided that, in addition to plan-specific rules, Management Board members must maintain ownership of at least 20% of the shares they were awarded, in registered form, throughout their terms of office. In addition, in accordance with the Afep-Medef Corporate Governance Code, Management Board members undertake not to use hedging instruments on shares to be received or shares received but which are non-transferable.
The Management Board reserves the right to grant stock options.
In this case, stock options would be subject to at least two performance conditions and measured over three years. The subscription or purchase price of the shares would not be lower than the average of the opening prices of Publicis Groupe shares on the regulated market of Euronext Paris over the twenty trading days preceding the date on which the options are granted, rounded down to the nearest euro, nor, for stock purchase options, the average purchase price of the Company’s treasury shares, rounded down to the nearest euro. These awards are limited to 0.3% of the Company’s share capital, a ceiling that also applies to performance shares.
A supplementary defined-benefit pension plan would be introduced for the Chairman of the Management Board from January 1, 2022, which would represent, depending on the performance observed, between 1% and 2.5% of the annual reference compensation (see Section 3.2.1.5 of this document).
(1) The number of shares indicated for Jean-Michel Etienne is the result of the pro rata basis approved by the Supervisory Board on September 13, 2021 (on the recommendation of the Compensation Committee) in accordance with the compensation policy. In 2019, it was decided to award him 40,000 shares subject to continued presence and performance conditions covering the 2019, 2020 and 2021 financial years. By applying the pro rata basis, 30,073 shares would remain deliverable to Jean-Michel Etienne, which gives 20,600 shares after application of the performance results of 68.5%.
