The fixed remuneration is determined on the basis of the level of responsibility, the experience in the executive management duties and market practices. Fixed remuneration will represent approximately 25% of the total target annual remuneration and, as per the above-mentioned principles, will amount for Benoît Potier to roughly 1,325,000 euros (unchanged since 2018).
The 2021 variable remuneration is drawn up as follows:
Target | Maximum | |||
|---|---|---|---|---|
Indicator | As a % of the fixed remuneration | As a % based on 100 | As a % of the fixed remuneration | As a % based on 100 |
FINANCIAL CRITERIA (QUANTIFIABLE) including: | FINANCIAL CRITERIA (QUANTIFIABLE) including: Target 105 | FINANCIAL CRITERIA (QUANTIFIABLE) including: Maximum 70 | 122 | 73 |
Recurring EPS | Recurring EPS Target 75 | Recurring EPS Maximum 50 | 87 | 52 |
Revenue | Revenue Target 30 | Revenue Maximum 20 | 35 | 21 |
PERSONAL CRITIERIA (QUALITATIVE) including: | PERSONAL CRITIERIA (QUALITATIVE) including: Target 45 | PERSONAL CRITIERIA (QUALITATIVE) including: Maximum 30 | 45 | 27 |
CSR safety and reliability / sustainable development) | CSR safety and reliability / sustainable development) Target 15 | CSR safety and reliability / sustainable development) Maximum 10 | 15 | 9 |
Organization / Human Ressources | Organization / Human Ressources Target 15 | Organization / Human Ressources Maximum 10 | 15 | 9 |
Individual performance | Individual performance Target 15 | Individual performance Maximum 10 | 15 | 9 |
TOTAL (financial and personal criteria) | TOTAL (financial and personal criteria) Target 150* | TOTAL (financial and personal criteria) Maximum 100 | 167 | 100 |
* Which corresponds to a variable remuneration of roughly €1,987,500 at the target for Benoît Potier.
The benefits in kind include the use of a Company car as well as contributions to the unemployment insurance for Company managers and corporate officers.
In accordance with the Group’s internal practice, the Chairman of the Board of Directors, like any other Executive Officer, does not receive any remuneration in respect of his office as Director, if he holds executive duties at L’Air Liquide S.A.
The Board confirmed that, in accordance with the principle adopted since 2016, the award of the LTI to the Executive Officer and the changes therein over time will be assessed in terms of the IFRS value (and not in terms of the volumes granted), for all stock option and performance share plans combined.
For 2021, the Board of Directors intends to grant LTIs to Benoît Potier representing an IFRS value of approximately 2.25 million euros, which is stable by comparison with the grants since 2018, representing 40.4% of the total target remuneration for 2021, in accordance with the weighting defined above.
Within the scope of these sub-limits authorized by the General Meeting, the Board of Directors sets lower annual limits for the grants to the Executive Officers. These limits remain unchanged, it being noted moreover that, in accordance with the remuneration policy referred to above, the grant of LTI represents approximately 40% of the Executive Officer’s total annual remuneration. Since 2018, in the event of a departure from the Group during the period of assessment of the performance conditions (a), the LTIs are the subject of a proration on the basis of the actual presence of the Executive Officer at the Group.
The Board of Directors takes into account, in the overall assessment and determination of the Executive Officer’s remuneration, the long-term commitments/agreements for the Executive Officers as follows: (i) a supplementary pension mechanism (b), comprising specifically for Benoît Potier, from January 1, 2020, a collective pension insurance contract subject to performance conditions, which from this date has replaced the defined benefit pension plan, which applies to eligible employee senior executives and Executive Officers for the period up to December 31, 2019, (ii) a collective life insurance plan, (iii) a death and disability benefits plan, (iv) commitments to pay an indemnity in the event of the termination of duties at the Company’s initiative, in certain circumstances, subject to performance conditions calculated over a three-year period, (v) entitlement to unemployment insurance for company managers and corporate officers, in the absence of an employment contract with the Group.
Benoît Potier benefits from the defined contribution pension plan which applies to all the employees and the Executive Officers, the contribution to which is paid in equal shares by the employer and the beneficiary on the remuneration which does not exceed eight times the PASS. For information purposes, contributions paid in 2020 by the Company for Benoît Potier totaled 9,836 euros. Note that in order to bring it into line with the new legal and regulatory plan arising from the PACTE Law (c), this retirement plan is being transferred collectively to a mandatory company retirement savings plan (PERO) on January 1, 2021. As Benoît Potier is covered by this collective plan, his entitlements are also transferred to the PERO on this date. As for the defined contribution plan, the employer and beneficiaries pay equal contributions into the mandatory company retirement savings plan on remuneration up to a limit of eight times the PASS.
Individual application of the defined contribution plan to Benoît Potier was authorized by decision of the Board of Directors on February 12, 2010, in accordance with the regulated agreements and commitments procedure, and approved by the General Meeting on May 5, 2010 (9th resolution).
(a) (a) For a reason other than resignation or removal from office for serious cause, which are cases that result in loss of LTIs. .
(b) (b) Which supplements the defined contribution pension plan which applies to all the employees and corporate officers.
(c) The PACTE Law of May 22, 2019 and the Ordinance of July 24, 2019 reforming retirement savings, the decree of July 30, 2019 and the order of August 7, 2019.
The remuneration policy applicable to Directors is, in terms of principles and structure, in line with the policy approved by the General Meeting of May 5, 2020.
It aims to determine, pursuant to the total package voted by the Ordinary General Meeting (to date, a maximum annual pay package of 1.3 million euros, in accordance with the 12th resolution voted by the Combined General Meeting on May 5, 2020), a remuneration which is competitive internationally to attract the best skills and expertise, in compliance with the Board’s diversity policy.
First of all, it provides for fixed remuneration (prorated if the term of office starts or comes to an end during the course of the year) allocated to the Directors. This remuneration is increased for the Lead Director, and an additional fixed remuneration is allocated to the Chairs of the four Board Committees (a), to take account of the level of responsibilities incurred and the work involved as a result of these duties.
It also includes a on the basis of each Director’s attendance attendance at the meetings of the Board and the Committees/working group, in accordance with the AFEP/MEDEF Code, in the form of the allocation of a fixed amount for each attendance at a meeting.
The Board will seek to harmonize fixed remuneration awarded to the Committee Chairs, since they have a comparable workload, as well as the remuneration awarded for attending each Committee meeting.
On the recommendation of the Remuneration Committee, the Board of Directors decided to slightly amend the remuneration policy to be put to the General Meeting of May 4, 2021 to reallocate the same remuneration for remote participation at meetings as for in-person attendance (instead of half the flat fee for each meeting). Measures introduced to contain the spread of coronavirus curbed in-person attendance at Board and Committee meetings in 2020, with many foreign Directors unable to attend meetings since March 2020. Some meetings were even fully remote to comply with lockdown restrictions and guarantee safety with regard to health. However, the Board notes that members were able to attend meetings using high-quality video-conferencing facilities and take part in discussions, in qualitative conditions equivalent to in-person meetings. Subject to approval of the remuneration policy for the Directors by the General Meeting of May 4, 2021, this change will be effective for all meetings held since September 2020. While it does not alter the preference of the Board and its members to attend meetings in person where possible, it recognizes the advances in communication technologies.
In order to take account of the distance for Directors coming from abroad, a fixed amount per trip is added to the variable remuneration for such Directors if attending in person (the remuneration for intercontinental travel being higher than that provided for intracontinental travel). Travel expenses are refunded by the Company.
This policy promotes attendance and participation by the Directors in the work of the Board and Committees, which fosters dialog between the Directors and with the management team, and, more generally, a complete understanding by the members of the Company’s activities and issues, including any social and environmental issues, which ensures solid governance for the Company’s sustainability.
The recognition of the role of the Lead Director, who receives additional remuneration in this regard, reflects the importance accorded by the Group to his governance tasks assisting the combined executive management functions, in connection with the meetings of the Board and the Appointments and Governance Committee, and in an informal manner between such meetings, thus promoting best governance practices. The consideration, in the remuneration policy, of the work of the four specialist Committees is evidence of the importance accorded to the preparation of the principal Board decisions, whether in terms of the proper running of the governing bodies, the review of the financial statements and the financial situation, the risk analysis, the consideration of the societal and environmental issues across all the Group’s activities, or indeed the determination of an incentivizing remuneration policy for the Executive Officers, including objectives in line with those of the Company.
Accordingly, the remuneration policy, which is balanced and incentivizing, contributes to the quality of the Board’s work, he latter being thus able to determine the orientations of the Company’s activity and its strategy in the best interests of the Company, its employees and all the stakeholders.
It is stated that the Executive Officers do not receive remuneration in respect of their office as Director or as Chair of a Committee/working group while they perform executive duties at L’Air Liquide S.A. Moreover, pursuant to the provisions in force at the Group which apply to all the employees who perform duties on the Group companies’ Boards of Directors, and in agreement with the various stakeholders, the employee Directors do not receive remuneration in respect of their office as Director. Travel expenses are refunded by the Company.
(a) And the working group, if chaired by a member other than an Executive Officer
