EDF_REGISTRATION_DOCUMENT_2017

3.

ENVIRONMENTAL AND SOCIETAL INFORMATION − HUMAN RESOURCES Pay close attention to our co-workers and make our internal transformations a success

3.6.3

COMPENSATION AND SOCIAL WELFARE: AN ATTRACTIVE EMPLOYER

At EDF, all employees may receive performance-related variable compensation. For projects and their management, compensation is based on collective performance alone. In 2017, the variable share represented 2% of average basic pay. For managers the average figure is 8% of the annual salary, so the Company is on a par with other major French companies. Furthermore, EDF decided to introduce an individual variable compensation scheme for all its non-management employees, which in 2017 represented 2% of their annual salary. For managers, the variable share is based on both individual and collective targets whose weighting increases with the position within the Company. EDF and Enedis pay special attention to the professional training of their managers on issues of compensation. In France, EDF and Enedis’s employees benefit from a profit-sharing scheme, introduced more than 20 years ago in the case of EDF and for Enedis when it became a subsidiary. Most of the Group’s European subsidiaries have similar schemes. EDF and Enedis employees can choose either to receive payment and/or to invest it into either the Group Corporate Savings Plan or the Group Collective Retirement Saving Plan (see below). In a restrictive economic environment, the policy of an employer contribution for sums invested has been maintained The EDF and Enedis profit-sharing agreements are three-yearly and require the profit-sharing amount payable to be set based on the meeting of national objectives reflecting the different components of the companies’ performances (economic, business lines, social and environmental). The most recent EDF SA three-year agreement (signed in 2016 for the period 2017-2019) aims to better link profit sharing to EDF SA performance. It includes the following five national performance criteria: development of Group cash flow, which is more directly linked to the employee activity than EBITDA, electricity generation, customer satisfaction, online health and safety training of employees and a sustainable development/digital criterion (reduction of printed paper and increase in teleconferencing). In 2017, the EDF SA agreement saw the payment of €99 million to EDF employees, i.e. €1,419 per beneficiary (down 29% due to worse performance, generation in particular). Jean-Bernard Levy decided that this did not fairly reflect employee efforts and decided to pay an exceptional bonus of €600 gross to all EDF SA employees, to recognise their commitment to the transformation of the Company in 2016. In 2017, Enedis paid €82 million for 2016 profit-sharing, i.e. €2,116 on average per beneficiary. EDF and Enedis are not eligible for the shareholding scheme. In 2017, the Dalkia group paid €4.4 million for 2016 profit-sharing, i.e. a median amount of €452. The median amount of the shareholding in 2017 for 2016 amounted to €1,088 per employee. In 2017, EDF EN paid €3.2 million for 2016 profit-sharing, i.e. an average amount of €3,504. No sum was paid under the shareholding. A comprehensive employee savings policy The Group corporate savings plan It is open to employees of EDF and of the Group’s French companies in which EDF owns directly or indirectly at least 40% of the share capital and which have signed up for the Group Corporate Savings Plan. Five varied mutual funds, including a socially-responsible investment fund, a solidarity mutual fund and the “EDF Share” fund, are open to subscriptions. The EDF group Corporate Savings Plan totalled €4,583 billion at the end of 2017. Profit-sharing, as well as individual payments and transfers from the Time Savings Accounts that employees make to the Group Corporate Savings Plan, are matched by the Company under conditions negotiated within each company.

Total compensation is a key component in recognising the contribution of every staff member to the Group’s performance. It contributes to employee engagement, increases the loyalty of talent and adds to the Group’s attractiveness. Accordingly, the Group is committed to offering its employees fair and competitive compensation, while paying great attention to the quality and level of social welfare it proposes, particularly in terms of cover against the major risks of life. The Group accordingly formally introduced a total compensation and fringe benefits policy in 2013. It covers all employees of the main companies controlled by the Group. Since 2014, the Group’s main foreign companies’ compensation and social welfare systems have been reviewed based on this policy. Following each review carried out by the Group Human Resources Division, an action plan is jointly drawn up with the subsidiary and its implementation is monitored during subsequent reviews. At the same time, a network of Compensation and Fringe Benefits managers was set up to back up the scheme, particularly in order to present the policy and share good practices. A fair and competitive total 3.6.3.1 compensation policy Total compensation policy is guided by four principles that are reviewed by the Group Human Resources Division: competitiveness with the external market; ■ consistency and internal equity; ■ financial sustainability; ■ communication. ■ It is based on fixed compensation and individual and/or collective variable compensation which serves to recognise the achievement of objectives, connected to the companies’ economic results. There is a direct and visible link between the employee’s contribution and the related compensation. The Group’s companies guarantee the meeting of the minimum legal or professional requirements in each country and the absence of discrimination. In the “communication” section, each employee receives information on the compensation rules and arrangements with the utmost transparency in accordance with the principles detailed above. Each EDF group employee must have visibility on their total compensation. Accordingly, in France, EDF, Dalkia and Enedis have offered each of their employees a full individual review of their annual compensation and its components. Variable compensation plans to boost performance Within the Group, most employees have individual or collective performance-related variable compensation. The terms and conditions of this variable compensation differ from one Group company to another, based on historical agreements and the applicable regulations. At EDF Energy (United Kingdom), a similar system applies to the majority of staff. At Dalkia (France) performance-based variable compensation was reviewed and recognises individual and collective performance for managers. At Edison (Italy), all employees, excluding executives, benefit from collective performance-based compensation schemes, based on profitability and productivity criteria (Premio di Risultato & Premio di Produttivita). At EDF Luminus (Belgium), managers and most non-managers are eligible for individual and collective performance-based compensation schemes. The China Division also introduced performance-based individual variable compensation for employees based in Beijing, designed to stimulate and recognise collective performance.

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DF I Reference Document 2017