Annual variable compensation
In order for the variable portion of Mr. Arthur Sadoun's compensation to better motivate good performance and more strongly penalize under‑performance, objectives are set in scales (between scales, on a proportional basis):
- if the first scale was not reached, the corresponding portion of the annual variable compensation would be zero;
- at the first scale, the corresponding portion of the annual variable compensation would be 80%;
- at the second scale, the corresponding portion of the annual variable compensation would be 100%;
- if the third scale is reached or exceeded, the corresponding portion of the annual variable compensation would be 150%.
Thus, the annual variable compensation, the target of which is 200% of the annual fixed compensation, may be 300% in the best case. A contrario, in case of underperformance, the annual variable compensation would be significantly negatively impacted and could be zero.
On the recommendation of the Compensation Committee, the Supervisory Board retained demanding performance criteria to determine Mr. Arthur Sadoun's variable compensation which, for the 2024 financial year, is based on:
- two financial criteria accounting for 80% of the overall weighting of the criteria, i.e. organic growth of the Groupe’s revenue and the Groupe’s operating margin. These absolute criteria were chosen by the Supervisory Board, following the proposal of the Compensation Committee, because they are demanding and best express the quality of the Company’s performance.These criteria provide an incentive to overperform, since variable compensation may be increased if the objectives are exceeded, with, however, a cap of 50% on each of these two criteria.The option to compensate outperformance is aligned with the Groupe’s mechanisms for annual variable compensation;
- a non‑financial quantifiable individual criterion of 20% of the overall weighting based on Corporate Social Responsibility (CSR). To accelerate the achievement of our CSR commitments, the variable compensation in respect of this criterion could be increased by 50% if the objectives are exceeded and reach the next year’s indicative checkpoint one year early. If all the criteria are met and the margin and growth targets are exceeded, as well as those relating to CSR commitments, the annual variable compensation of Mr. Arthur Sadoun may represent a maximum of 150% of his target annual variable compensation, i.e. 300% of his annual fixed compensation. 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 criterion.
