Pursuant to the compensation policy approved by the General Shareholders’ Meeting of May 31, 2023, a retention contract was put in place in 2023 for the benefit of Mr. Arthur Sadoun. This contract was also approved by ex-post vote at the General Shareholders’ Meeting of May 29, 2024.
The implementation of this contract took place under very specific circumstances, marked by a historic transition in leadership following Mr. Maurice Lévy’s departure after more than 40 years at the helm of the Groupe. Given these exceptional circumstances, the Company deemed it necessary to ensure leadership stability during a critical strategic phase, marked by a profound transformation of the Groupe, an increasingly competitive environment for recruiting and retaining talent, and a significant gap in compensation practices compared to the sector’s main international players.
In this context, 167,000 shares were awarded to Mr. Arthur Sadoun. Based on the opening share price on May 31, 2023, this grant corresponds to a value equivalent to two years’ fixed salary per year of presence over a five-year period, i.e. the equivalent of ten years’ fixed annual salary. The vesting of these shares is subject to a five-year presence condition, running until December 31, 2027.
This retention contract was qualified as exceptional compensation in view of the particular and clearly identified circumstances that led to its award. It is not intended to be renewed.
Mr. Arthur Sadoun has a subscription with a taxi company and is reimbursed for his taxi and entertainment expenses.
The Chairman and Chief Executive Officer may obtain reimbursement of expenses incurred during the performance of his duties, including those that may be related to his personal situation (for example, certain specific trips), in compliance with the Company’s internal rules. He is provided with the material resources necessary for the performance of his mandate.
Mr. Arthur Sadoun receives compensation as Director in accordance with the compensation policy applicable to Directors as described in Section 3.2.2.1 of this Universal Registration Document. The compensation allocated for his term of office as Director is composed of a fixed portion and a variable portion based on his attendance at meetings of the Board of Directors.
It should be noted that Mr. Arthur Sadoun does not receive compensation for his duties as Chairman of the Board of Directors insofar as he combines this position with that of Chief Executive Officer.
Mr. Arthur Sadoun benefits from the coverage applicable to executives at his level under the French system.
Mr. Arthur Sadoun does not currently benefit from a supplementary pension plan.
The Chairman and Chief Executive Officer cannot have an employment contract with the Company.
Mr. Arthur Sadoun’s employment contract with Publicis Conseil dated December 5, 2006 was terminated when he was appointed Chairman of the Management Board in 2017.
In the event of a forced departure or due to a change in control or strategy and except in the event of serious or gross misconduct, Mr. Arthur Sadoun will be entitled to a severance payment.
The amount of the payment would be equal to one year of total gross compensation (fixed and variable portions paid) calculated using the average of the last 24 months of compensation.
He would also have the right to exercise the options to subscribe to and/or to purchase the shares that have been awarded to him, and to retain pro rata temporis the right to performance shares already granted to him, subject to the performance conditions set out in the regulations for the plan in question being satisfied (pursuant to the Supervisory Board decision of November 25, 2020).
In addition, this payment will be subject to a performance condition: the amount of the severance payment will only be payable in full if the average annual amount of the variable compensation vested by Mr. Arthur Sadoun for the three years preceding the termination is at least equal to 75% of his “target variable compensation”. If the average annual amount is less than 25% of the “target variable compensation,” no sum or benefits will be due. If the average annual amount is between 25% and 75% of the “target variable compensation,” payments and benefits will be calculated on a proportional basis between 0% and 100% using the rule of three.
The severance payment may only be paid after the determination by the Board of Directors that the performance conditions had been achieved, assessed on the termination date of his position as Chairman and Chief Executive Officer.
In the event of a forced departure or a change in control or strategy, Mr. Arthur Sadoun will not be subject to a non-compete or non-solicitation obligation.
For information, note that these commitments had been authorized by the Supervisory Board on September 12, 2018 and approved by the General Shareholders’ Meeting of May 29, 2019 in its fifth resolution, for commitments formerly subject to the procedures on related-party agreements.
