AFD - 2019 Universal registration document

CORPORATE GOVERNANCE Compensation policy and practices

Corporate governance Additional information Name of the convention Further information Agreements and commitments approved in previous years which continued to be performed

National Secular Solidarity Committee (Comite National de Solidarité Laique or CNSL) - Programme for Developing Education Networks in West Africa (final phase Ǿ 2016-2018)

Maximum amount of €910 At 31 Ǿ December Ǿ 2019, payment of €910

CS_Financing of the three-year activities programme.pdf

A meeting of the Board of Directors on 23 Ǿ February Ǿ 2017 authorised the conclusion of an agreement with Coordination SUD for €2,943. At 31 Ǿ December Ǿ 2019, payment of €2,943 A meeting of the Board of Directors on 13 Ǿ July Ǿ 2017 authorised the conclusion of an agreement with CNSL for €350 Ǿ thousand. At 31 Ǿ December Ǿ 2019, payment of €350

CNSL_Financing of a project to support citizen participation in Colombia.pdf

WITH THE NGOS CNSL_Improvement of the quality of nursery schools in Sri Lanka

Grant of €375 approved. At 31 Ǿ December Ǿ 2019, payment of €208

3

Grant of €272 approved At 31 Ǿ December Ǿ 2019, payment of €171

CNSL_ Coalition Education phase Ǿ 2

New agreements authorised by the Board of Directors WITH THE NGOS N/A WITH PROPARCO Mandate agreement relating to the “transforming financial systems for the climate” (TFSC) programme Agreements and commitments not previously approved N/A

AFD’s Board of Directors’ meeting on 28 Ǿ September Ǿ 2018 authorised the conclusion of an agreement with Proparco. The Ǿ agreement was signed on 14 Ǿ October Ǿ 2019

3.2 Compensation policy and practices 3.2.1 Compensation policy governance Article Ǿ L.511-89 of the French Monetary Code, resulting in particular from the implementation of the CRDIV directive, requires that banks and financing companies of “significance” establish an Appointments Committee and a Compensation Committee and refers to a decree from the Minister of the Economy for the definition of “significance”.

It should be noted that the compensation paid to all AFD employees, including the Executive Committee and “individuals whose activities have a significant impact on the company’s risk profile”, is determined by AFD’s bylaws. Moreover, no variable compensation is awarded. This particular characteristic of AFD, together with the partial transposition of the CRDIV directive into French law, argues in favour of exempting AFD from establishing a committee which would, ultimately, not have the power to exercise the prerogatives expected by the regulator. TheHRfunctionistheonlyentityinvolvedindesigningandimplementing the compensation policy. The reason for this is that no AFD employee receives variable compensation (except for profit sharing). 3.2.2 Principal compensation policy characteristics 3.2.2.1 Determining compensation The compensation of every AFD employee is defined essentially using their salary point: on recruitment, a job level (comprising a range of salary points) is allocated to each individual in accordance with the strict definitions in the Staff Regulations. The salary point value is then determined, within this range, according to the employee’s age, training and experience (there is a strong internal concept of fairness).

Article Ǿ 104 of the Decree of 3 Ǿ November Ǿ 2014 uses, as the sole criteria for determining “significance”, the fact that the total company or consolidated balance sheet exceeds €5 Ǿ billion, meaning that these provisions apply to AFD, while the CRDIV directive contains provisions that have not been transposed and which would exempt AFD from establishing these committees. However, the establishment of Appointments Committees and Compensation Committees conflicts with certain bylaw and legal provisions and certain organisational rules on State public undertakings applicable to AFD. With regard to Compensation Committees, pursuant to Article Ǿ 76-2 and Article Ǿ 95-1 of the CRDIV directive, governments are only obliged to stipulate that Compensation Committees are established in undertakings that are “significant” in terms of their size, but also in terms of their internal organisation and the nature, scope and complexity of their activities. These derogations and criteria established by the CRDIV directive and Article Ǿ L.511-89 of the French Monetary and Financial Code were not specified in the Decree of 3 Ǿ November Ǿ 2014.

73

UNIVERSAL REGISTRATION DOCUMENT 2019