The detailed and quantified elements of the 2025 compensation policy for the Chair and Chief Executive Officer as well as the items of compensation for the 2024 financial year for all executive corporate officers are explained respectively in Sections 3.2.3.1 and 3.2.3.2 below(1).
Pursuant to article 16 III of the Company’s Articles of Incorporation, Mr. Arthur Sadoun’s compensation is set by the Board of Directors and reviewed on the recommendation of the Compensation Committee.
This compensation policy for the Chair and Chief Executive Officer is adopted once the Board of Directors has ensured that, on one hand, it is in line with the corporate interest of Publicis Groupe while ensuring that it is attractive and competitive, and, on the other hand, that it will contribute to the Groupe’s long-term future, while at the same time serving the commercial strategy set out in Section 1.3.2 of this document.
In this regard, the compensation policy for the Chair and Chief Executive Officer is built on a fair balance between the items of compensation (fixed compensation, target annual variable compensation and target long-term variable compensation, in particular using performance shares) to reflect market practices, and incorporates the Groupe’s performance criteria over the medium to long term.
The objective of the Chair and Chief Executive Officer’s compensation policy is to align his interests with those of the Company and shareholders by establishing a strong link between performance and compensation. Within this context, its essential purpose is to encourage the achievement of ambitious objectives and create value on a long-term basis, by setting stringent performance criteria.
In order to do so, its compensation structure is based on fixed compensation and on annual and multi-year variable compensation directly linked to his individual performance, as well as his contribution to Groupe performance.
In this respect, the variable compensation of the Chair and Chief Executive Officer includes a preponderant portion of financial criteria based on targets communicated to the market. They are supplemented by criteria linked to Corporate Social Responsibility (CSR), also publicly disclosed. These varied and measurable criteria are relevant, verifiable and transparent to support both short- and long- term performance.
The performance criteria are all quantifiable, measurable, set in advance and validated by the Compensation Committee on the basis of a clear and pre-determined scale and calculations in conformity with the resolutions adopted.
The compensation policy of the Chair and Chief Executive Officer sets out the measurement methods to be applied to determine the extent to which he has satisfied the performance criteria specified for variable compensation and share-based compensation. To determine the extent to which Mr. Arthur Sadoun has satisfied these performance criteria, the Board of Directors 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 of the criteria in relation to the objectives set. This verification is documented and made available to the Directors.
The compensation structure of the Chair and Chief Executive Officer is based on a combined analysis (using the services of external consultants where necessary) of market practices observed in both in comparable major French companies in general and, more specifically, in the companies competing with Publicis Groupe both in terms of business and talent in the United Kingdom and the United States. Comparability with Publicis Groupe’s competitors is playing an increasingly important role in the analyses carried out, with Publicis Groupe as the leading player in the industry against competitors based mainly in the United States and the United Kingdom, and first in terms of market capitalization on one hand. On the other hand, the United States and the United Kingdom represent Publicis Groupe’s largest net revenue shares, at 59% for the American market (1st) and 9% for the British market (2nd).
The compensation of the Chair and chief Executive Officer comprises (i) a fixed portion, as well as (ii) a substantial variable portion, primarily based on performance and alignment of their interests with those of the Company and its shareholders. This variable compensation is made up of annual variable compensation and long-term variable compensation in the form of performance shares and/or stock options. This compensation structure applicable to the Chair and Chief Executive Officer is consistent with that proposed to the Group’s main senior executives (see Section 3.2.5).
