AFD // 2021 Universal Registration Document

CORPORATE GOVERNANCE Remuneration policy and practices

3.2.2.3 Change in remuneration The arrangements for implementing the remuneration policy place a significant emphasis on informing, consulting and negotiating with the unions. Remuneration for AFD employees may be re-evaluated by (i) ɸ increasing the value of the salary point, (ii) ɸ and/or a general revaluation (or by job level) of salary points, (iii) ɸ 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 ɸ III Chapter ɸ 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 Remuneration payments for early termination of an employment contract are defined in Heading ɸ V of the Staff Regulations. In addition to the particular cases referred to in Articles ɸ 25, 28 and ɸ 30-3, an employee may be dismissed: 1° for economic reasons; 2° on the grounds of professional incompetence; 3° as disciplinary action; 4° on the grounds of medical unfitness. In the event of dismissal for the following reasons, remuneration is calculated on the basis of an average monthly salary, which is defined as a twelfth of the remuneration over the previous 12 ɸ months: 1° Dismissal for economic reasons: Remuneration for dismissal paid to an employee at the end of the notice period is equal to one and a half months of this average monthly salary per year of service up to the sixth year inclusive, and to one and three-quarter months of this salary for every year of service beyond the sixth year. For employees whose services were performed partly in French Overseas Departments and Collectivities and/or abroad and partly in mainland France, or vice versa, remuneration is calculated on a pro rata basis in relation to the time spent in each of these postings, according to the following terms and conditions: P the portion of the remuneration relating to their services in mainland France is calculated on the basis of one twelfth of their annual reference salary in mainland France;

P awards and bonuses (Article ɸ 12.2) In addition to the basic salary, employees who meet the required conditions receive the following awards and bonuses; these are calculated on a pro rata basis according to hours of work for individuals whose working hours are fewer than the collective hours of work: P year-end bonus (12.2.1) It will be calculated on December’s base salary as defined in Article ɸ 12.1 and multiplied by 1.4. For each employee, it is in line with the number of paid days over the year, P 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 ɸ June to 31 ɸ May, P dependent child(ren) and ascendant(s) family supplement (12.2.3) It is defined by a scale indexed to the value of the salary point, P long service bonus (12.2.4) A to C grade employees receive a long service bonus defined by a scale negotiated with the trade unions, P professional bonus (12.2.5) It 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 if the employee is transferred to a position to which the professional bonus does not apply, P personal supplement (12.2.6) The company may, on an exceptional basis, pay personal remuneration 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 remuneration 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 ɸ 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 remuneration, whether deferred or not ( e.g. bonus, shares, stock options, ɸ 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. 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 remuneration, an annual profit sharing component calculated using indicators related to the Group’s operations, cost control, efficiency and overall effectiveness.

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2021 UNIVERSAL REGISTRATION DOCUMENT