Plastic Omnium - 2018 Registration Document

2 CORPORATE GOVERNANCE Report from the Board of Directors on corporate governance PLASTIC OMNIUM 2018 REGISTRATION DOCUMENT 63 Components of the compensation of executive 2.1.2.2.2 directors Compensation of Mr. Laurent Burelle, Chairman and Chief Executive Officer FIXED COMPENSATION 2018 Mr. Laurent Burelle’s fixed compensation equals 120% of the highest coefficient in the collective bargaining agreement in the Plastics industry (coefficient of 940). Accordingly, Mr. Laurent Burelle received compensation from Burelle SA of €89,806 in 2018, up 1.10% compared to 2017. BONUS IN RESPECT OF 2018 Mr. Laurent Burelle’s bonus is based on the funds from operations of Burelle SA, Plastic Omnium’s parent company, after payment of interests and taxes, plus the share of funds from operations of joint-ventures, after payment of interests and taxes, and net of dividends paid by these companies. Burelle SA pays gross compensation to executive directors for their services, which is then billed to Compagnie Plastic Omnium and its subsidiaries, calculated on the basis of the estimated time spent by each of them on business relating to the Plastic Omnium Group. Based on Burelle SA’s audited and certified operatingcash-flow of €695,378,000 for fiscal year 2018, the total amount of profit-sharing net of social security costs, distributable to the executive directors of Burelle SA, Mr. Laurent Burelle, Mr. Jean Burelle and Paul Henry Lemarié is €9,021,067. Mr. Laurent Burelle receives 53% of this total amount, i.e. €4,781,165, from Burelle SA, of which 76% is rebilled to Compagnie Plastic Omnium and its subsidiaries. The payment of this amount is subject to the vote of the Shareholders’ Meeting. Furthermore, Mr. Laurent Burelle no longer receives stock options since 2015. He does not have an employment contract or a non-competition clause. The rebilling to Compagnie Plastic Omnium and its subsidiaries of the variable portion of Laurent Burelle’s compensation due for the 2018 financial year is submitted for approval by the Ordinary Shareholders’ Meeting of April 25, 2019 in its Resolution 10 presented in Chapter 7 of this document. Compensation of Mr. Jean-Michel Szczerba, Co-Chief Executive Officer, Chief Operating Officer FIXED COMPENSATION 2018 The annual fixed compensation of Mr. Jean-Michel Szczerba earned in 2018 increased by 5% compared with 2017. This compensation, decided by the Board of Directors upon the recommendation of the Compensation Committee, was based on a review of the position from a sample representative of listed industrial companies comparable to Plastic Omnium. As a result, the fixed compensation received by Mr. Jean-Michel Szczerba for 2018 amounted to €1,079,006. BONUS 2018 On the recommendation of the Compensation Committee, the Board of Directors set the terms for determining Mr. Jean-Michel Szczerba’s bonus for 2018. Mr. Jean-Michel Szczerba’s bonus is expressed as a percentage of the fixed compensation. This percentage is capped at 50% of the fixed compensation. This annual bonus is determined on the basis of performance assessment criteria based on both quantitative objectives and qualitative objectives. This variable portion is paid to Mr. Jean-Michel Szczerba after the Compensation Committee and the Board of Directors confirm that the results have been achieved. Mr. Jean-Michel Szczerba’s bonus is made up of the following two components: a quantitative component (60%) and a qualitative component (40%). The quantitative component is fixed, for 2018, based on the following criteria: Attainment of a workplace accident frequency rate, with and without ● lost time (Tf2) of 2 or less (20%); Attainment of an operating margin (OpM) of 9.6% or more (20%); ● Attainment of freecash-flow of €180 million or more (20%). ● The qualitative component is based on the following criteria: Furthering the implementation of the Group’s strategic repositioning ● through disposals and acquisitions (20%); Assessment, by the Chairman and CEO, of his role as Co-Chief Executive ● Officer in terms of commercial development and other aspects (20%). Based on the recommendations of the Compensation Committee, the Board of Directors at its meeting held on February 13, 2019 reviewed the level achieved in terms of the aforesaid criteria and decided to set the annual bonus of Mr. Jean-Michel Szczerba, in respect of the 2018 fiscal year, at €426,207, i.e. 39.5% of his annual fixed compensation. The payment to Jean-Michel Szczerba of the variable portion of his compensation due for the 2018 financial year is submitted for approval by the Ordinary Shareholders’ Meeting of April 25, 2019 in its Resolution 12 presented in Chapter 7 of this document. Compensation of Mr. Paul Henry Lemarié, Chief Operating Officer FIXED COMPENSATION 2018 The annual fixed compensation of Mr. Paul Henry Lemarié equals 120% of the highest coefficient in the collective bargaining agreement in the Plastics industry (coefficient of 940). Accordingly, Mr. Paul Henri Lemarié received compensation from Burelle SA of €89,806 in 2018, up 1.10% compared to 2017. BONUS 2018 Mr. Paul Henry Lemarié’s bonus is based on the operatingcash-flow of Burelle SA, parent company of Compagnie Plastic Omnium, after tax and interest expense plus the share of operatingcash-flow of joint ventures (after tax and interest expense and net of dividends paid by these companies). Burelle SA pays gross compensation to executive directors for their services, which is then billed to Compagnie Plastic Omnium and its subsidiaries, calculated on the basis of the estimated time spent by each of them on business relating to the Plastic Omnium Group.