BPCE_REGISTRATION_DOCUMENT_2017

2 REPORT ON CORPORATE GOVERNANCE

Rules and principles governing the determination of pay and benefits

PAY POLICY APPLICABLE TO THE MEMBERS OF THE MANAGEMENT BOARD ➡

Pay components

Principles and criteria adopted

Fixed pay

Based on amotionby theRemuneration Committee, the Supervisory Boardsets the pay grantedto the membersof the Management Board. Fixed payprimarilyreflectsthe professionalexperience relatedto the positionheld and the responsibilities exercised,and is determined bycomparisonto marketpractices. For membersof the Management Board, the variableportion is determined based on target pay equal to80% of their fixed pay (includingthe special increase, ifapplicable)for thefiscal year, with a maximumof 100%. Variable payis determinedbased on thequantitativeand qualitative criteriapreviously validatedby the Supervisory Board. It is awardedif the criterionfor triggeringvariable payis met, pertainingspecifically tothe GroupBasel IIICET1 ratio. Thislevel correspondsto the minimum CET1 level,plus the P2R, P2G and thephase-in combined buffers set by the ECB in itsletter ofDecember 19,2017. No variableportion is 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, - the Group’s cost/income ratio, - the Group’s netbankingincome. - 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 (3) , assessed as arolling averageover the last three calendar years preceding the allocationyear and the payment year. Payment of the 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 CatherineHalberstadtand LaurentRoubin: in respectof fiscal year 2016: deferredfor a fractionrepresenting 50% over2018, 2019, and 2020(16.66% - each year); in respectof fiscal year 2017: deferredfor a fractionrepresenting 50% over2019, 2020, and 2021(16.66% - each year); in respectof fiscal year 2018: deferredfor a fractionrepresenting 50% over2020, 2021, and 2022(16.66% - each year); Deferred pay, calculated after neutralizingthe impactof the revaluationof own debt, is indexedto the change in net income attributableto equity holdersof the parent, assessed asa rolling averageover thelast 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.

Annual variable pay

Multi-year variable pay

Membersof the Management Boarddo not receiveany multi-year variablepay. Membersof the Management Boarddo not receiveany exceptionalpay.

Exceptional pay

Grants ofstock options/preference shares

Membersof the Management Boarddo not receiveany stock optionsor preferenceshares.

Exceptwhen relatedto the natureof the corporateoffice,membersof the Management Boarddo not receive any bonusshares.

Grants ofbonus shares

Attendance fees Sign-on bonus

Membersof the Management Boarddo not collect attendance fees. Membersof the Management Boarddo not receivea 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 pay is indexed to net income attributable to equity holders of the parent after neutralising the impact of the revaluation of own debt. (3)

104

Registration document 2017