BPCE_REGISTRATION_DOCUMENT_2017

REPORT ON CORPORATE GOVERNANCE Rules and principles governing the determination of pay and benefits

Pay component

Principles and criteria adopted

2

Annual variable pay

For the President of the ManagementBoard: the variable portion is determined based on target pay equal to 150%of his fixed pay for the fiscal year, with a maximumof 200%. As of fiscal year 2018, the variable portion is determinedbased on target pay equal to 100%of his fixed pay (includingthe special increase)for the fiscal year, with amaximum of120%. Variable payis determinedbased on thequantitativeand qualitative criteriapreviously validatedby the Supervisory Board. It is awardedif the criterionfor triggeringvariable payis met, specificallypertainingto the GroupBasel III CommonEquity Tier 1ratio. For2017, this level correspondsto the minimum CET1level, plusthe P2R, P2G and the phase-in combined buffers et by the ECB in its letter ofDecember 19, 2017.No variable portionis paid if this criterion is not met (1) . Quantitativecriteria account for 60% ofvariable payand are definedbased on quantitative factors that reflect how well anumberof the Group’sfinancial fundamentals arebeing satisfied.These criteriaare definedby the Supervisory Board, and take into account (2) : net income attributableto equity holdersof the parent (30%): if the target for thiscriterionas set by the - Supervisory Board is reached,ManagementBoardmemberswould beentitled toreceive theentire 30%; the Group’s cost/income ratio (20%): ifthe target for thiscriterionas set by theSupervisory Board is reached, - Management Boardmembers would be entitled to receivethe entire20%; the Group’s netbankingincome (10%):if the target for thiscriterionas set bythe SupervisoryBoard is - reached, Management Boardmembers would be entitled to receivethe entire10%. For eachof these criteria, if the target asset by the Supervisory Board is reached, Management Boardmembers would be entitled to receive theentire fixed percentage. In respectof fiscal year 2018, qualitative criteria account for 40%of variablepay and aredetermined based on key targets in termsof: Retail Banking and Insurance; - Human Resourcesand BPCE SA CorporateSecretary’s Office; - Financeand Strategy; - Supervision– control – governance; - Digital and InformationSystem. - Only quantitative criteriacan be usedto determine outperformance. Between 50% and 70% ofvariable payis deferredin equal installments over three years, dependingon the variable pay amount. The deferredportion is indexed tothe change in netincomeattributableto equityholdersof the parent, assessed as a rollingaverageover the last three calendar yearsprecedingthe allocationyear andthe paymentyear. Payment ofthe deferredportion is contingentupon attaining astandardReturnon Equity (ROE)for core Group businesses thatis at least equal to 4% during thefiscal year beforepayment falls due. With regardto the terms of payment forvariable payowed to FrançoisPérol: in respectof fiscal year 2014: deferredfor a fractionrepresenting 60% over2016, 2017, and 2018(20% each - year); in respectof fiscal year 2015: deferredfor a fractionrepresenting 60% over2017, 2018, and 2019(20% each - year); in respectof fiscal year 2016: deferredfor a fractionrepresenting 60% over2018, 2019, and 2020(20% each - year); in respectof fiscal year 2017: deferredfor a fractionrepresenting 60% over2019, 2020, and 2021(20% each - year); in respectof fiscal year 2018: deferredfor a fractionrepresenting 50% to70% over2020, 2021, and 2022, - depending on theamountof variablepay; Deferredpay, calculatedafter neutralizingthe impact of the revaluationof own debt, is indexed to the change in net income attributable to equity holders of the parent (3) , assessed as a rolling average over the last three calendar years preceding the allocationyear and thepayment year. Payment ofvariable payowed in respectof 2018 willbe submitted for an ex-post vote ofthe Annual General Shareholders’Meeting in 2019called to approve thefinancial statements for fiscalyear 2018.

Multi-year variable pay

The Presidentof the ManagementBoarddoes not receiveany multi-year variable pay. The Presidentof the ManagementBoarddoes not receiveany exceptionalpay.

Exceptional pay

Grants ofstock options/preference shares Grants ofbonus shares

The Presidentof the ManagementBoarddoes not receiveany stock optionsor preferenceshares.

The Presidentof the ManagementBoarddoes not receiveany bonusshares. The Presidentof the ManagementBoarddoes not collect attendance fees. The Presidentof the ManagementBoarddoes not receivea sign-on bonus.

Attendance fees Sign-on bonus

The total CET1 ratio requirement set by the ECB, including the “Pillar II Guidance” component, is not subject to disclosure. (1) The Supervisory Board has established specific expected targets for these quantitative goals, but for confidentiality reasons, they are not publicly disclosed. (2) For fiscal years preceding 2016, deferred variable p ais indexed to net income attributable to equity holders of the parent after neutraliwing the impact of the revaluation of own debt. (3)

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Registration document 2017

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