HERMÈS - 2019 Universal Registration Document

CORPORATE GOVERNANCE SUPERVISORY BOARD'S' REPORT ON CORPORATE GOVERNANCE

The Executive Chairmen do not receive any compensation or benefits of any kind from the subsidiaries of Hermès International. The breakdown of the actual compensation of the Executive Chairmen for the last two financial years is shown in Table 2 on page 270. Each year, the CAG-CSR Committee of the Supervisory Board of Hermès International is tasked with ensuring that the Executive Chairmen’s compensation is compliant. No predetermined weighting is applied with respect to fixed and variable compensation, which depend on the components described above.

The two components of Executive Chairmen compensation are changed according to clear and objective quantifiable criteria, unaltered for many years, that are publicly available and predefined by nature, as described in paragraphs 1 and 2 above. Thus, no minimum (“statutory”) variable compensation is guaranteed for the Executive Chairmen. The Executive Management Board relies on the recommendations of the CAG-CSR Committee. Mr Henri-Louis Bauer, the Legal Representative of Émile Hermès SARL (Executive Chairman), does not personally receive any compensation from Hermès International. He receives compensation from Émile Hermès SARL for his functions as Executive Chairman of this company, which is unrelated to the appointment as Executive Chairman of Émile Hermès SARL in Hermès International.

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HISTORY OF FIXED AND VARIABLE COMPENSATION PAID TO EXECUTIVE CHAIRMEN OVER THE LAST THREE FINANCIAL YEARS AND RESPECTIVE IMPORTANCE 1

Proportion (not pre-established)

2018

2017

Mr Axel Dumas

2019

Fixed compensation (referred to as “additional” in the Articles of Association) Variable compensation (referred to as “statutory” in the Articles of Association) awarded in respect of the previous financial year

€1,623,378

47.70%

€1,470,773

€1,354,303

€1,780,045 €3,403,423

52.30% 100.00%

€1,622,043 €3,092,816

€1,420,353 €2,774,656

TOTAL

Proportion (not pre-established)

2018

2017

Émile Hermès SARL

2019

Fixed compensation (referred to as “additional” in the Articles of Association) Variable compensation (referred to as “statutory” in the Articles of Association) awarded in respect of the previous financial year

€551,850

39.93%

€500,000

€500,000

€830,083 €1,381,933

60.07% 100.00%

€756,409 €1,256,409

€756,409 €1,256,409

TOTAL

For further explanation of changes, please refer to page 267. (1)

Methods for evaluating the achievement of performance criteria for variable compensation or share-based compensation (Article R. 226-1-1, paragraph I-4 of the French Commercial Code (Code de commerce)) The variable compensation (referred to as “statutory”) of the Executive Chairmen is evaluated in accordance with the change in consolidated net income before tax for the prior financial year compared with the preceding financial year, and conditioned in the proportion of 10% on the achievement of the CSR criterion. The evaluation of the amount of compensation subject to the CSR criterion is limited to a target of 100%, with no possibility of exceeding that limit. Each of the three indices mentioned on page 258: shall count as one-third of the CSR criterion; s has an annual reference period; s is subject to an annual evaluation of their achievement by the s CAG-CSR Committee. Deferred or multi-year variable compensation The allocation to Executive Chairmen of deferred or multi-year variable compensation is not provided for.

Exceptional compensation The allocation of exceptional compensation to the Executive Chairmen is not provided for. Share-based compensation (Article R. 226-1-1, II-2° of the French Commercial Code) The Executive Chairmen do not currently receive any share-based compensation. Mr Axel Dumas, the only eligible Executive Chairman, has not received any stock options or performance-based shares since he was appointed Executive Chairman. The eighteenth and nineteenth resolutions submitted to the Combined General Meeting of 24 April 2020 would make it possible, subject to their approved and if the Executive Chairmen’s compensation policy were to change in the future, to grant stock options or performance shares to the Executive Chairmen under the conditions set out in said resolutions (see pages 432 and seq .). Émile Hermès SARL, a legal entity, is not eligible for the stock option or performance-based share plans.

2019 UNIVERSAL REGISTRATION DOCUMENT HERMÈS INTERNATIONAL

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