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 S.A. shareholders (see Section 6.6 Note 31 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 shares granted are subject to performance and continued presence conditions to be met over a period generally set at three years.
Since 2021 the members of the Management Board benefit from a regular performance share plan ("LTIP"). An initial grant of shares is made each year, but they only vest after three years and then only in accordance with the achievement of stringent objectives. The value of performance shares granted under the LTIP 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 granted to the Chairman of the Management Board represents, at the time of the grant, 300% of his fixed compensation (and up to 350% of his fixed compensation in the event of overperformance from 2023). The vesting 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 Groupe of companies competing with Publicis Groupe. Since 2019, part of the Publicis Groupe shares granted are also subject to a criteria relating to Corporate Social Responsibility. From 2022, Publicis Groupe S.A. shares allocated to the Chairman of the Management Board are also subject to a relative TSR criterion (Total Shareholder Return). 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 a presence condition during the three-year vesting period.
The Supervisory Board, on the recommendation of the Compensation Committee, decided to grant the following performance shares to the members of the Management Board as part of the “LTIP 2023 Président du Directoire” and “LTIP 2023 Membres du Directoire” plans. For the “LTIP 2023 Président du Directoire”, the Supervisory Board, on the proposal of the Compensation Committee, decided that the performance shares granted to the Chairman of the Management Board would be subject to an overperformance clause applicable solely to growth and margin criteria.
| LTIP 2023 Président du Directoire LTIP 2023 Membres du Directoire | Date of grant | Vesting date(1) | Number of performance shares awarded(2) | % of the share capital |
|---|---|---|---|---|
| Arthur Sadoun, Chairman | Arthur Sadoun, Chairman Date of grant March 16, 2023 |
Arthur Sadoun, Chairman Vesting date (1)March 16, 2026 |
Arthur Sadoun, ChairmanNumber of performance shares awarded (2)48,655 (3) |
Arthur Sadoun, Chairman% of the share capital 0.02% |
| Anne-Gabrielle Heilbronner | Anne-Gabrielle Heilbronner Date of grant March 16, 2023 |
Anne-Gabrielle Heilbronner Vesting date (1)March 16, 2026 |
Anne-Gabrielle HeilbronnerNumber of performance shares awarded (2)16,634 |
Anne-Gabrielle Heilbronner% of the share capital 0.01% |
| Michel-Alain Proch | Michel-Alain Proch Date of grant March 16, 2023 |
Michel-Alain Proch Vesting date (1)March 16, 2026 |
Michel-Alain ProchNumber of performance shares awarded (2)16,634 (4) |
Michel-Alain Proch% of the share capital 0.01% |
(1) Performance conditions described below.
(2) Number of shares granted based on the opening share price on the day of the Management Board meeting of March 16, 2023.
(3) If the compensation policy applicable to Arthur Sadoun for the 2023 financial year were adopted, additional overperformance shares of 585,000 euros would be granted and the performance criteria and conditions would be applicable to all performance shares granted in 2023.
(4) If the compensation policy applicable to Michel-Alain Proch for the 2023 financial year were adopted, additional performance shares valued at 120,000 euros would be granted.
