AFD - 2018 Registration document

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CORPORATE GOVERNANCE Compensation policy and practices

Awards and bonuses (Article 12.2) Added to the basic salary, for employees who fulfil the required conditions, are the following awards and bonuses calculated on a pro rata basis according to hours of work, where the individual’s hours are lower than the collective hours of work: year-end bonus (12.2.1) this will be calculated on December’s base salary as defined in Article 12.1 and multiplied by 1.4. For each employee, it is in accordance with the number of paid days over the year; holiday bonus (12.2.2) the amount is identical for every employee. It is paid in three instalments: 20% at the end of February, 50% at the end of May and 30% at the end of August. For each employee, it is in accordance with the number of paid days during the period 1 June to 31 May; P dependent child(ren) and ascendant(s) family supplement (12.2.3) this is defined by a scale indexed to the value of the salary point; long service bonus (12.2.4) employees on job levels A to C are awarded a long service bonus defined by a scale negotiated with the trade union organisations; professional bonus (12.2.5) this is related to holding a type of position and is paid to every employee who holds this type of position. The types of positions in question and the corresponding bonus amounts are decided by the Chief Executive Officer. The bonus stops being paid in the event of a transfer to a position not covered by the professional bonus; the company may, on an exceptional basis, pay personal compensation supplements, on a provisional basis, other than those described above, primarily in accordance with the specific positions held or to address exceptional situations. These personal compensation supplements are paid for as long as the reason for their being awarded continues. Management will inform the Employee- Management Committees provided for in Article 58 of the Regulations about measures taken in this respect. P some employees receive a supplementary retirement allocation according to their retirement plan; P no employee (including directors) receives individual variable compensation, whether deferred or not (for example, bonus, shares, stock options etc.); P employees also enjoy employment benefits such as supplementary defined contribution retirement plans, health fees and insurance, and housing loans financed entirely or partly by AFD; P expatriate employees also enjoy several allowances related to their expatriate status. P P P P P personal supplement (12.2.6)

Lastly, any employee on a fixed term or indefinite-term contract, whether full or part-time, who has three months of service within AFD (excluding employees whose contracts were entered into locally and are not governed by French law), receives, in addition to their fixed compensation, an annual profit sharing component calculated using indicators related to the Group’s operations, cost control, efficiency and overall effectiveness. 3.2.2.3 Changes in compensation The arrangements for implementing the compensation policy place a significant emphasis on informing, consulting and negotiating with the unions. Compensation for AFD employees may be re-evaluated by (i) increasing the value of the salary point, (ii) and/or a general revaluation (or by job level) of salary points, (iii) and/ or the award on an individual basis of salary points. General increases together with the budget for individual increases are negotiated on an annual basis during the Mandatory Annual Negotiations (NAO) and are subject to the framework of AFD’s supervisory ministries. There is a safeguard clause for salary point increases which ties the increase in AFD’s salaries to the increase in government civil service salaries over a three-year period. An individual increase in basic salary agreed by Management is based on an assessment of an employee’s mastery of his or her position in accordance with the terms and conditions provided in Heading III Chapter II of the Staff Regulations on evaluations. Individual increases are distributed fairly between departments, job levels or men/women. For a promotion decision, a minimum number of salary points must be awarded according to the job level. An Employee-Management Committee enables employees to appeal in the event that they disagree with the Management’s decision or when an employee has not had an individual promotion for four full years. 3.2.2.4 Early termination of the employment contract Compensation payments for early termination of an employment contract are defined in Heading V of the Staff Regulations. In addition to the particular cases referred to in Articles 25, 28 and 30-3, an employee may be dismissed: 1° for economic reasons; 2° on the grounds of professional incompetence; 3° by way of disciplinary action; 4° on the grounds of medical unfitness. For the following reasons for dismissal, compensation for dismissal is calculated on the basis of an average monthly salary defined as a twelfth of the compensation for the last 12 months: 1° Dismissal for economic reasons: Compensation for dismissal paid to an employee at the end of the notice period is equal to one and a half months of this

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REGISTRATION DOCUMENT 2018