Groupe Renault - 2019 Universal Registration Document

03

COMPENSATION OF COMPANY OFFICERS CORPORATE GOVERNANCE

It should be noted that pursuant to Article L. 225-100-III of the French Commercial Code, payment of the annual variable compensation to the interim Chief Executive Officer for the 2020 financial year is subject to its approval by the Annual General Meeting to be held in 2021 to approve the financial statements for the financial year ending December 31, 2020. Multi-year variable compensation The interim Chief Executive Officer will not receive any multi-year variable compensation. Exceptional compensation The interim Chief Executive Officer will not receive any exceptional compensation in 2020. Long-term compensation Pursuant to the Company’s compensation principles, a significant proportion of the interim Chief Executive Officer’s compensation consists of long-term compensation, the vesting of which is subject to performance criteria, to ensure alignment of the interim Chief Executive Officer’s compensation with shareholder interests.

Long-term compensation takes the form of performance shares, allocated annually. The number of performance shares allocated to the interim Chief Executive Officer is expressed as an absolute number, rather than as a percentage of the salary, so that upward and downward fluctuations in the share price will affect the total value of such long-term compensation. The interim Chief Executive Officer receives performance shares under the same criteria as the other executives in the Group (see Chapter 3.2.5 of this Universal registration document) subject to an additional performance criterion, the total shareholder return (TSR), applied to her in her capacity as executive officer. On the recommendation of the Governance and Compensation Committee, the Board of Directors’ meeting on February 13, 2020 decided that 27,500 performance shares would be allocated to the interim Chief Executive Officer for the 2020 financial year, representing the maximum number of performance shares that may be awarded in respect of the 2020 financial year. Performance criteria will be measured over a cumulative three-year period (2020, 2021 and 2022).

Vesting of performance shares is also subject to a three-year presence condition starting from the date of the allocation by the Board of Directors. The number of shares fully vested by the interim Chief Executive Officer out of the 27,500 performance shares allocated to her will depend on the achievement of the following performance criteria:

LONG-TERM PERFORMANCE CRITERIA

Percentage of models manufactured on the Alliance platforms

Total shareholder return (TSR) Free cash flow (FCF) *

Total carbon footprint

Target

TSR is the market criterion P which reflects variations in share prices, and dividends paid. Relative TSR reflects the value delivered to shareholders, compared to the value created by alternative investments to which they have access. TSR is calculated by reference to P a benchmark, which corresponds to the sum of the average TSR Euro Stoxx Auto & Parts index results and the average Euro Stoxx ex Financials index results (both weighted equally).

Free cash flow (FCF) is a key P component of the Company’s growth capacity, as it underlies its capacity for financing the investments necessary for long-term growth and allows dividend payments.

This criterion is key indicator of P the Group’s ability to share costs and benefit from the economies of  scale provided by  the Alliance.

This criterion corresponds to the P target of reducing the average carbon footprint of passenger cars and light commercial vehicles registered worldwide. It covers greenhouse gases P emitted as a result of the energy consumed by the Company to produce vehicles, as well as most other indirect emissions related to their design, manufacture, marketing, use and end-of-life treatment (see Chapter 2.3.3 of the Universal registration document). 0% if the average carbon P footprint emissions is strictly higher than the target 14% if the average carbon P footprint emissions is equal to the target 20% if the average carbon P footprint emissions is equal to or the Group target -2.5 points. Linear interpolation if average P carbon footprint is between the Group target -2.5 points and the Group target. 20% P

Weighting (as a percentage of allocation)

20% P

30% P

30% P

Payment rate

0% if the TSR is strictly lower P than the benchmark. 9% if the TSR is equal to the P benchmark. 20% if the TSR is equal to or P higher than the benchmark +10% Linear interpolation if TSR is P between the benchmark and the benchmark +10%.

0% if FCF is strictly lower than P the budget. 21% if FCF is equal to the P budget 30% if FCF is higher than or P equal to the budget +20%. Linear interpolation if FCF is P between the budget and the budget +20%.

0% if the percentage of CMF P models is strictly lower than the Mid-Term Plan indicator. 21% if the percentage of CMF P models is equal to the Mid-Term Plan indicator. 30% if the percentage of the P CMF manufacturing is higher than or equal to the Mid-Term Plan indicator +5%. Linear interpolation if the P percentage of CMF models is between the Mid-Term Plan indicator and the Mid-Term Plan indicator +5%.

As this is a relative criterion, the P amount of the target is not yet known. The Company will disclose the average figure and the relevant level of achievement at the end of the performance period.

For reasons of commercial confidentiality, the Company does not P disclose ex-ante the target figures for these criteria. However, it will publish the level of achievement for these criteria at the end of the performance cycle. 

The reduction target is part of P the Group’s environmental targets and is defined in chapter

2.3.3 of the Universal registration document.

Before restructuring expenses. *

322 GROUPE RENAULT I UNIVERSAL REGISTRATION DOCUMENT 2019

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