The Chairman and Chief Executive Officer receives long-term variable share-based compensation subject to the achievement of the objectives set as follows.
Since 2021, Mr. Arthur Sadoun has benefited from a regular performance share plan (“LTIP”). An initial grant of shares is made each year. They only vest after three years, and then only in accordance with the achievement of stringent objectives. In order to bring Mr. Arthur Sadoun’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 him 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 since 2023).
In order to promote the retention of the Chairman and Chief Executive Officer, no shares are vested by him before the end of a period of presence 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 Board of Directors and made public, the vesting of shares is subject to compliance with the presence condition of the Chairman and Chief Executive Officer until the end of the vesting period.
This condition may only be waived by a substantiated decision of the Board of Directors after obtaining the opinion of the Compensation Committee. Pursuant to its established practice, the Board of Directors exercises this discretionary authority strictly and only uses it very occasionally, following a thorough analysis of the specific circumstances surrounding the departure and in strict compliance with the applicable performance conditions and governance requirements. Recent departures illustrate the limited and stringent application of this clause.
In the event of forced departure or a departure due to a change in control or strategy, and except in the event of serious or gross misconduct, shares awarded may be retained pro rata temporis, subject to performance conditions.
In the event of retirement, he may, at the end of the vesting period and pursuant to a decision of the Board of Directors, in accordance with the compensation policy approved by shareholders and applicable at that time, receive the shares granted to him pro rata temporis.
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 reference group of competitor companies of Publicis Groupe. The changing geopolitical context, particularly in the United States, as well as the significant increase in the Groupe’s scope and the excellent results already achieved in terms of CSR objectives, for which Publicis ranks at the top of its industry, have led the Groupe to remove non-financial criteria from its LTIP plans from 2025. The performance conditions of the Chairman and Chief Executive Officer LTIP would be aligned with those of the Groupe LTIP, and based solely on growth and margin criteria. In addition, the achievement of the financial criteria is assessed on an expanded reference group, in order to take into account the reorganizations underway in our industry in 2025. The number of shares actually awarded is determined in accordance with the level of achievement of these performance objectives. Moreover, the vesting of the performance shares is also subject to a presence condition during the three-year vesting period.
The number of shares that may be delivered at the end of a three-year vesting period (except in the event of death or disability) will depend on:
Since 2023, in order to strengthen the link between Mr. Arthur Sadoun and the Groupe and to provide an incentive for overperformance, the grant of performance shares may be increased by an additional number of shares if the objectives are exceeded. In this case, the long-term variable compensation in shares may represent up to 350% of his annual fixed compensation if the organic growth and operating margin criteria are exceeded.
In each of these plans, assuming the performance conditions are met, entitlement to receive shares is subject to a presence condition until the end of the vesting period.
