Plastic Omnium - 2020 Universal Registration Document

CORPORATE GOVERNANCE Compensation of members of the Board of Directors and executive directors PLASTIC OMNIUM UNIVERSAL REGISTRATION DOCUMENT 2020 113 Compensation policy for executive directors in respect of 2021 The compensation of the Chief Executive Officer and the Managing Director includes a fixed portion, a bonus and an incentive portion. In accordance with the principles set out above, the fixed compensation of the Chief Executive Officer for 2021 remains unchanged and stands at €900,000 for the full year. That of the Managing Director also remains unchanged for 2021 and stands at €500,000 for the full year. The annual bonus is determined as a percentage of the fixed compensation. It is determined 60% by quantifiable criteria aimed at remunerating economic performance and 40% by qualitative criteria. Among the qualitative criteria are several objectives in terms of sustainability responsibility, which together account for 20% and include the carbon neutrality strategy, the diversity policy, workplace safety and the strengthening of the compliance policy. For the quantifiable part, the parameters used are free cash flow (20%), net income Group share (20%) and operating margin (20%). These targets, quantifiable for 2021, were set in comparison to the Group’s budget as it was presented to the Board of Directors on December 11, 2020. An underweighting is established within the quantifiable and qualitative objectives. In the event of the departure of an executive director during the first quarter, the Board of Directors may set the amount of the annual bonus for the current fiscal year pro rata temporis to the amount of the bonus granted to the executive director concerned in respect of the previous fiscal year. The incentive portion takes the form of performance shares subject to exclusively quantifiable performance conditions. It aims to encourage the executive director to take action in the long term and to build loyalty and promote the alignment of their interests with the corporate interest and the interests of shareholders. To this end, the vesting of shares is subject to performance conditions that are recognized at the end of a vesting period of 4 years from the grant date. The value of these shares, estimated at the grant date in accordance with IFRS, used to prepare the consolidated financial statements, represents approximately 35% of the executive director’s overall compensation without exceeding 100%. If an event justifies it, the Board of Directors reserves the right to award an additional grant. This grant, if any, to the executive director, duly justified by the Board of Directors, would be subject to an overall annual cap (all grants combined) of 5% of the total number of performance shares granted during the same period. The executive directors make a formal commitment not to use performance share risk hedging transactions until the end of the holding period set by the Board of Directors. The payment of variable and exceptional compensation in respect of 2021 will be subject to the approval of the Ordinary Shareholders’ Meeting to be held in 2022. The executive directors will also continue to benefit from the protection of the collective welfare and health care plans of senior managers in order to have market-compliant social provision. The Chief Executive Officer and the Managing Director, who are also directors, receive compensation for their participation on the Board of Directors. It should also be noted that the employment contracts of Laurent Favre and Félicie Burelle with the company Plastic Omnium Gestion have been suspended since January 1, 2020. In addition, the Board of Directors has the option of negotiating a non-compete agreement with an executive director upon their departure, applicable in the event of termination of their duties within the Group when this would be in the Group’s interests, and under financial conditions that comply with the principles set out by the AFEP-MEDEF Code to which Compagnie Plastic Omnium SE refers. No payment may be made unless this non-compete agreement has been approved by the Shareholders’ Meeting of Compagnie Plastic Omnium SE. Lastly, executive directors each have a company car. PERFORMANCE SHARES AWARD 3.2.3 PLAN AUTHORIZATION OF THE COMBINED 3.2.3.1 SHAREHOLDERS’ MEETING OF APRIL 26, 2018 The Combined Shareholders’ Meeting of April 26, 2018 authorized the Board of Directors to award existing free shares of the Company to employees and corporate officers of the Company and its French and foreign subsidiaries that are related to it under the conditions set forth in Article L. 225-10-59 of the French Commercial Code. The Shareholders’ Meeting set the period of validity of the authorization at thirty-eight months, which may be used on one or more occasions. The number of shares thus awarded may not represent more than 1% of the share capital as of the date of the Shareholders’ Meeting of April 26, 2018. The Board of Directors shall identity the beneficiaries of the awards and the number of performance shares granted to each, as well as the vesting conditions, in particular the performance conditions. The Board of Directors may provide for vesting periods and, where applicable, a holding periods of more than one year. PERFORMANCE SHARE AWARDS 3.2.3.2 AS PART OF THE APRIL 26, 2018 AUTHORIZATION (THE MAY 2, 2019 PLAN) On February 13, 2019, the Board of Directors, on the basis of proposals from Senior management, examined by the Appointments Committee and the Compensation Committee, decided on the conditional grant of performance shares under the authorization granted by the Shareholders’ Meeting of April 26, 2018. The share capital on April 26, 2018 was comprised of 150,976,720 shares, enabling 1,509,767 shares to be distributed.