Universal Registration Document 2022

Terms of the compensation policy applicable to all corporate officers

Generally speaking, Publicis Groupe has introduced a stringent compensation policy designed to motivate employees so that they make their best contribution to the achievement of the Groupe’s strategic objectives and to ensure long-term performance. The compensation structure is communicated to employees, shareholders and investors in a clear and transparent manner. Publicis Groupe refers to the recommendations of the Afep-Medef Corporate Governance Code.

The compensation policy for corporate officers is based on the same principles as those applicable to employees: clarity, competitiveness (vis-à-vis competitors and in the markets in which Publicis Groupe operates), internal fairness, performance incentives and gender equality. The structure of compensation is based on the position and responsibilities within the Groupe and combines the following elements: the base salary (reflecting experience and responsibilities), the variable compensation (which remunerates performance during the year) and awards of performance shares, in particular (recognizing and encouraging the contribution to the Groupe’s medium- and long-term performance on the basis of measurable criteria).

The compensation policy sets out the measurement methods to be applied to corporate officers to determine the extent to which they have satisfied the performance criteria specified for variable compensation and share-based compensation. To determine the extent to which corporate officers have satisfied these performance criteria, the Supervisory Board draws on the proposals and work of the Compensation Committee, which prepares and checks, with the support in particular of the Secretary General and of the Groupe Chief Financial Officer, the performance of each officer on each of the criteria in relation to the objectives set. These checks are documented and made available to the members of the Supervisory Board.

The criteria used to distribute the annual fixed sum allocated by the General Shareholders’ Meeting to members of the Supervisory Board are set out in Section 3.2.1.2 of this document.

The principles of the compensation policy applicable to corporate officers, subject to approval by the General Shareholders’ Meeting on May 31, 2023, are also intended to apply to newly-appointed corporate officers or those who are reappointed at the General Shareholders’ Meeting. For the latter, the Supervisory Board is nevertheless authorized to temporarily decide certain adjustments in order to take into account, in particular, their profile and their experience. The Supervisory Board will decide, on the opinion of the Compensation Committee, to the extent required by the situation and only on the points of the compensation policy in force that would prove to be obviously unsuitable for the situation of the newly appointed executive.

Changes to the compensation policy

In accordance with the decisions of the Supervisory Board of March 8, 2023, on the proposals of the Compensation Committee of March 7, 2023, the following changes to the compensation policy previously approved by the shareholders at the last General Shareholders’ Meeting of May 25, 2022 will be proposed to the General Shareholders’ Meeting of May 31, 2023:

• The fixed compensation of Michel-Alain Proch, member of the Management Board, would be increased from 600,000euros to 720,000 euros per year, an increase of 20%.
• The fixed compensation of the Chairman of the Management Board remains unchanged and the annual variable compensation would be subject to two criteria linked to financial performance and based on the Groupe’s internal objectives (up to 80%), namely organic growth and operating margin, and CSR criteria (up to 20%).
• Given the uncertain economic situation, the variable part of the compensation should be more rewarding in case of good performance and more penalizing in the event of underperformance. The over performance clause on the annual variable compensation of the Chairman of the Management Board could thus be increased to 150% and apply to all the criteria. Similarly, the performance shares allocated to the Chairman of the Management Board would be subject to an over performance clause only applicable to the growth and margin criteria. Conversely, in the event of underperformance, the variable compensation would be strongly negatively impacted and could be zero.
• In the interest of the Groupe and of all stakeholders, the Supervisory Board has decided to secure the services of Arthur Sadoun on the long term. Indeed, the Groupe has this singularity that in almost a hundred years of existence,it only had three Chief Executive Officers: its founder,Marcel Bleustein-Blanchet, during 60 years, Maurice Lévy,during 30 years, and Arthur Sadoun since 2017. The duration of exercise of such CEO responsibilities is undoubtedly one of the Groupe’s key success factors. In the unstable landscape in which we operate and in light of The Cure war for talent in our industry - even more so for a profile as visible as that of Arthur Sadoun, whose performance is highly recognized - it is proposed to implement a retention contract in shares. The shares granted would be subject to a five-year presence condition.The number of shares granted would be equal to two years of fixed compensation per year of presence over the whole five-year period, i.e. the equivalent of ten years of fixed compensation. This provision is established in the interest of the Company and of all stakeholders, shareholders included.