The Group has established performance share plans with the aim of further involving employees in its performance, beyond profit-sharing and participation. The Board of Directors has not awarded stock options since 2019, but has not ruled out using this remuneration instrument, according to the conditions described above, if changes in circumstances justify doing so.
In order to pursue this attribution policy, it is proposed that you renew the existing authorizations.
As in the past, the performance conditions apply to all options and performance shares awarded to any beneficiary and are calculated over three years. They are set at the beginning of the year at the February meeting of the Board of Directors, in order to comply with a reference period of three full years.
The criteria used include ROCE (Return on Capital Employed), which is relevant in very capital intensive industry, and TSR (Total Shareholder Return), which enables the Company’s performance to be aligned with the regular returns expected by its Shareholders. In addition, since the 2020 performance share plans, the performance conditions have included a performance condition linked to the Group’s Climate Objectives. For the 2022 plans, this criterion will be aligned with the sustainable development goals published in March 2021 (ACT).
It should be noted that, since 2018, the award of long-term incentives (LTIs) to the Executive Officer has been subject to the principle of prorating. In practice, if the officer leaves for any reason other than resignation or removal from office for serious cause (situations which will result in the loss of the LTI), the overall allocation rate (when the performance conditions have been applied) will be reduced on a prorated basis, according to the number of months of the officer’s actual presence at the Group during the period of assessment of the performance criteria.
In addition, under the principle applied since 2016, the attribution of performance shares to the Executive Officer is assessed according to IFRS.
Lastly, the proposed resolutions set sub-limits for Executive Officers, it being specified that the Board of Directors sets annual limits that are substantially lower than these sub-limits. Attributions to Executive Officers are also accompanied by strict shareholding obligations.
The 20th resolution is intended to renew, for a period of 38 months, the authorization granted by the 2019 General Meeting to the Board of Directors to grant options to subscribe or purchase shares of the Company for the benefit of employees and Executive Officers. The draft resolution maintains the total number of options allowed at 2% of the share capital over 38 months, and sets the limit on the number of shares that can be awarded to Executive Officers at the same time at 0.2% of the share capital.
The 21st resolution is intended to renew, for a period of 38 months, the authorization granted by the 2019 General Meeting to the Board of Directors to grant performance shares of the Company for the benefit of employees and Executive Officers. The draft resolution maintains the total number of shares that can be attributed at 0.5% of the share capital over 38 months, and sets the limit on the number of shares that can be awarded to Executive Officers at 0.1% of the capital at the same time.
