Invitation to our General Meeting 2024

1.2. IMPLEMENTATION IN ORDER TO DETERMINE THE 2024 REMUNERATION OF THE CHIEF EXECUTIVE OFFICER

The Board of Directors, on the recommendation of the Remuneration Committee, decided to review mid-term the positioning of the Chief Executive Officer’s total remuneration, to ensure it always accurately reflects the Chief Executive Officer’s level of responsibility and the market conditions.

For this purpose, an update of the benchmark conducted in 2021 in the context of the determination of the Chief Executive Officer’s remuneration has been carried out in 2023. It shows that, in a highly inflationary context following the public health crisis, the median and average remuneration of CEOs have been revised upwards, with the result that the relative positioning of Mr François Jackow’s remuneration is now well below the average of the 2023 benchmark.

Consequently, the Board, on the recommendation of the Remuneration Committee, considered that it was appropriate to reassess Mr François Jackow’s total remuneration, which had not changed since his appointment as Chief Executive Officer, by +10% (applicable to the fixed and target variable remuneration as well as the LTI in order to maintain the balanced structure of the components of his remuneration).

This 10% increase represents an average annual increase of +3.2% up until the end of his current mandate, in line with the trend in employee remuneration within the Group (detailed in the 2023 Universal Registration Document).

The structure of the remuneration will remain identical to that approved by the General Meeting of May 3, 2023. The remuneration revised in this way will then remain stable until the end of Mr François Jackow’s term of office. M. François Jackow will not receive any remuneration for his office as Director.

The components of the Chief Executive Officer’s remuneration are described below.

1. The annual fixed renumeration for Mr François Jackow will amount to 1,210,000 euros.
2. The 2024 variable remuneration for Mr François Jackow is drawn up as follows:

The fixed remuneration thus represents approximately 27% and the variable remuneration represents 32% of the total target remuneration (including LTIs), and the target variable remuneration represents 80% of the maximum variable remuneration.

• Long-term remuneration components (LTI): Mr François Jackow will be granted, for his term of office as Chief Executive Officer, for the 2024 fiscal year, performance shares totaling 1,815,000 euros (based on an IFRS value).
• 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.
• Death and disability benefits plan and healthcare plan: Mr François Jackow will continue to benefit from the additional “incapacity, disability, death” benefits plan and from the healthcare plan covering all the personnel.
• Long-term commitments: Mr François Jackow will continue to benefit from supplementary pension plans set up by L’Air Liquide S.A.: a collective pension insurance contract with individual and optional subscription (that is subject to performance conditions ⁽¹⁾ Based on the gap between the ROCE and the WACC over the last three fiscal years, the ROCE taken into consideration being the recurring ROCE excluding major acquisitions, defined as those representing more than 5% of capital employed (only two or three acquisitions having exceeded this level in the last 30 years). ), a defined contribution pension plan for “senior executives” and a defined contribution pension plan (PERO).
• Commitments relating to the termination of duties:
  • — Mr François Jackow may benefit from a termination indemnity, subject to very strict triggering conditions. Payment of this indemnity is subject to performance conditions that are calculated over three years and based on the gap between the ROCE and the WACC. The amount of the termination indemnity is set at 24 months’ annual gross fixed and variable remuneration and decreases gradually as Mr François Jackow, in his capacity as Chief Executive Officer, approaches the age limit defined in the articles of association.
  • — Mr François Jackow may benefit from an indemnity in consideration for an undertaking not to compete for a period of two years from the date of termination of his term of office. The amount of this indemnity would be equal to one year’s annual gross fixed and variable remuneration received by the Chief Executive Officer (excluding any sums received in respect of the long-term variable remuneration), the aggregate total of the termination indemnity and the non-compete indemnity being capped at two years’ annual gross fixed and variable remuneration. — Mr François Jackow may benefit from an indemnity in consideration for an undertaking not to compete for a period of two years from the date of termination of his term of office. The amount of this indemnity would be equal to one year’s annual gross fixed and variable remuneration received by the Chief Executive Officer (excluding any sums received in respect of the long-term variable remuneration), the aggregate total of the termination indemnity and the non-compete indemnity being capped at two years’ annual gross fixed and variable remuneration.