Compagnies des Alpes // 2019 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 consolidated version of the AFEP- MEDEF Code of Corporate Governance for Listed Companies dated June 2018, which can be viewed via the following link: www.medef. com. In accordance with the “comply or explain” rule and the latest

recommendations from that Code and the AMF, the following table speci fi es the recommendations of the Code that Compagnie des Alpes does not apply, explaining the reasons.

Principles of the AFEP-MEDEF Code not followed by CDA

Detailed explanations

Obligation to hold shares (Article 22): The Board of Directors sets a minimum number of shares that the executive o ffi cers must hold in the form of registered shares until they leave o ffi ce. This decision is reviewed at least once each time a term of o ffi ce is renewed. The Board can use di f ferent references such as: (i) annual compensation; (ii) a speci fi c 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 o f ficers 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 24.6.2): The complementary defined-benefit pension plans intended for senior executives and executive o ffi cer, are required to observe conditions that prevent abuse. These complementary pension plans are subject to the condition that the bene fi ciary is a corporate o ffi cer 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 bene fi ciaries, which can no longer be amended): P the group of potential bene fi ciaries must be signi fi cantly wider than the executive o ffi cers alone; P the bene fi ciaries must satisfy reasonable conditions, de fi ned by the Board of Directors, relating to their seniority within the Company, which must amount to at least two years, in order to bene fi t from payments under a de fi ned-bene fi t pension plan; P demanding performance conditions permitting annual de fi nition of the acquisition of conditional rights, according to applicable legislation; P the reference period taken into account for the calculation of the bene fi ts must cover several years and any arti fi cial increase in compensation over this period for the sole purpose of increasing the bene fi ts 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 fi nal 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 ( fi xed and variable compensation payable for the reference period).

In December 2013, CDA incorporated this principle relating to the holding of shares by executive o ffi cers into its Charter, leaving it up to the Board to specify the terms that would apply. As yet, the Board has not de fi ned these terms, in particular the number of shares that must be held by its executive o ffi cers (it should be noted that these executive o ffi cers do not bene fi t 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 O ffi cer (almost 9,000), the Appointments and Compensation Committee, which is aware of the di ffi culties for corporate o ffi cers 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 de fi ned- contribution pension plan and a de fi ned-bene fi t pension plan. All headquarters sta ff bene fi t from the complementary de fi ned-contribution pension plan, including its executive o ffi cers. The de fi ned contributions (individual accounts) are equal to 7% of the annual compensation for each bene fi ciary (capped at fi ve times the social security ceiling, or €198,660 on an annual basis in 2018). Contributions to the savings plan are split between the employer (4%) and employee (3%), notwithstanding the employee’s status and age. The de fi ned-bene fi t pension plan, which is fully funded by CDA, is open to corporate o ffi cers, senior managers and category-CIII executives (72 individuals). This second plan allows bene fi ciaries who end their professional career within the Group to bene fi t, when they take their pension, from a retirement pension equal to 1% of their basic annual salary (last basic annual salary comprising fi xed and variable parts) per year of seniority, up to a maximum of 10% of this compensation, less the pension received under the de fi ned-contribution plan. Upon retirement the bene fi ciary may opt to receive a life annuity with a 60% survivor pension. Although this de fi ned-bene fi t 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 bene fi ts 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 bene fi ts 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 bene fi ts 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 bene fi ciaries obtaining a high percentage of their fi nal salary if they have given only very few years of service to the Group. It should be noted that CDA closed its de fi ned-bene fi t 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 bene fi ts 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.

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Compagnie des Alpes I 2019 Universal registration document