Compagnie des Alpes // 2020 Universal Registration Document

3 REPORT ON CORPORATE GOVERNANCE

Compliance with corporate governance recommendations

3.4 Compliance with corporate governance recommendations

Compagnie des Alpes refers to the AFEP-MEDEF Code of Corporate Governance of Listed Companies in its updated version of January 2020, which may be consulted via the following link: www. medef.com. In accordance with the “comply or explain” rule and the Principles of the AFEP-MEDEF Code not followed by CDA Detailed explanations Obligation to hold shares (Article 23): The Board of Directors sets a minimum number of shares that the executive officers must hold in the form of registered shares until they leave office. This decision is reviewed at least once each time a term of office is renewed.

latest recommendations from this Code and the AMF, the table below specifies the recommendations of the Code that Compagnie des Alpes does not apply and explains the reasons why.

In December 2013, CDA incorporated this principle relating to the holding of shares by executive officers into its Charter, leaving it up to the Board to specify the terms that would apply. As yet, the Board has not defined these terms, in particular the number of shares that must be held by its executive officers (it should be noted that these executive officers do not benefit from performance share or stock option plans under which they would potentially be required to hold a quota of the shares resulting from these plans). Nevertheless, taking into account the number of shares in the Company now held by the Chairman-Chief Executive Officer (almost 9,000), the Appointments and Compensation Committee, which is aware of the difficulties for corporate officers of investing in Company shares in full compliance with the provisions of the French Monetary and Financial Code, has decided to delay the introduction of a more precise policy at this stage. CDA has set up a combined complementary retirement plan, comprising a defined- contribution pension plan and a defined-benefit pension plan. All headquarters staff benefit from the complementary defined-contribution pension plan, including its executive officers. The defined contributions (individual accounts) are equal to 7% of the annual compensation for each beneficiary (capped at five times the social security ceiling, or €205,680 on an annual basis in 2020). Contributions to the savings plan are split between the employer (4%) and employee (3%), notwithstanding the employee’s status and age. The defined-benefit pension plan, which is fully funded by CDA, is open to corporate officers, senior managers and category-CIII executives (67 individuals). This second plan allows beneficiaries who end their professional career within the Group to benefit, when they take their pension, from a retirement pension equal to 1% of their basic annual salary (last basic annual salary comprising fixed and variable parts) per year of seniority, up to a maximum of 10% of this compensation, less the pension received under the defined-contribution plan. Upon retirement the beneficiary may opt to receive a life annuity with a 60% survivor pension. Although this defined-benefit plan does not adhere strictly to all the recommendations set out in the AFEP-MEDEF Code, Compagnie des Alpes believes that it is in keeping with the spirit of this Code. The benefits under the scheme are not currently subject to a minimum seniority condition (recommendation: minimum of two years) and the reference compensation on which the calculation of the benefits is based is the last basic annual salary (recommendation: multi-year period). The system set up does, however, respect all the other recommendations and remains well below authorised pension levels. Thus, potential benefits which do not increase with seniority only account for 1% of the basic salary (vs. the legally authorised maximum of 3%). Moreover, the ceiling is capped at 10% of the basic salary (vs. a maximum of 45% recommended by the AFEP-MEDEF Code). Consequently, this system rules out any possibility of beneficiaries obtaining a high percentage of their final salary if they have given only very few years of service to the Group. It should be noted that CDA closed its defined-benefit pension plan on 4 July 2019, following the recent legislative changes in this regard, stemming from the Order of 3 July 2019 implementing the so-called Pacte law of 22 May 2019. The conditional benefits granted under this plan are frozen as of 1 January 2020 and will remain subject to the conditions provided under the plan’s current rules. Although the Chairman of the Appointments and Compensation Committee is independent in accordance with the AFEP-MEDEF Code of Corporate Governance and the Charter, no Director representing employees currently sits on the Appointments and Compensation Committee. This possibility is nevertheless provided for in the Company’s Corporate Governance Charter.

The Board can use different references such as: (i) annual compensation; (ii) a specific number of shares, a percentage of the capital gain net of social security contributions, taxes and transaction-related fees, if concerning shares from stock options exercised or performance shares; (iii) a combination of these references. As long as this shareholding obligation is not fulfilled, the executive officers will devote a portion of stock options or performance shares granted to this obligation, as determined by the Board. This information appears in the Company’s annual report. Complementary retirement plans (Article 25.6.2): The complementary defined-benefit pension plans intended for senior executives and executive officer, are required to observe conditions that prevent abuse. These complementary pension plans are subject to the condition that the beneficiary is a corporate officer or employee of the Company at the time they assert their rights to the pension in accordance with the applicable regulations. To prevent any abuse, and in addition to legal requirements, the following additional regulations have to be imposed (except in the case of plans that are closed to new beneficiaries, which can no longer be amended): P the group of potential beneficiaries must be significantly wider than the executive officers alone; P the beneficiaries must satisfy reasonable conditions, defined by the Board of Directors, relating to their seniority within the Company, which must amount to at least two years, in order to benefit from payments under a defined-benefit pension plan; P demanding performance conditions permitting annual definition of the acquisition of conditional rights, according to applicable legislation; P the reference period taken into account for the calculation of the benefits must cover several years and any artificial increase in compensation over this period for the sole purpose of increasing the benefits under the retirement plan is prohibited; P systems that create an entitlement, either immediately or after a limited number of years, to a high percentage of the overall final compensation are therefore to be excluded; P the maximum percentage of the reference income to which the individual will be entitled under the complementary retirement plan may not exceed 45% of the reference income (fixed and variable compensation payable for the reference period). Director representing employees on the Appointments and Compensation Committee (Article 18.1): It is recommended that an employee Director be a member of the Appointments and Compensation Committee.

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Compagnie des Alpes I 2020 Universal registration document