HERMÈS - 2019 Universal Registration Document

CORPORATE GOVERNANCE SUPERVISORY BOARD'S' REPORT ON CORPORATE GOVERNANCE

At its meeting on 24 February 2020, the Active Partner’s Executive Management Board set the Executive Chairmen’s compensation as presented in the following table:

Gross annual amount

Mr Axel Dumas €1,824,677 €1,956,269 €3,780,946

Émile Hermès SARL

Fixed compensation for 2020 (“additional” compensation) Variable compensation allocated for 2019 ("statutory" compensation)

€620,279 €912,261 €1,532,540

TOTAL

As in previous years, the Executive Management Board of the Active Partner takes into account, in its decision, the Group’s performance over the past year, the strategic challenges in respect of the Group’s medium- to long-term development, the competitive environment in which it operates and the principles of variability contained in the provisions of the Articles of Association set out under the heading “Annual fixed and variable compensation and respective importance” on page 258. As such, in accordance with these principles, it was decided to modify the compensation of the Executive Chairmen in 2020 on the one hand by strictly applying the variation observed between 2018 and 2019 on the two objective quantifiable criteria that have served as a reference for the compensation of the Executive Chairmen for many years and, on the other hand, by evaluating the achievement of the CSR criterion. These amounts were submitted to the Supervisory Board for approval at its meeting of 25 February 2020.

compared with 2018, i.e. a variation of +12.4%, to the fixed compensation for 2019. Variable compensation for 2019 (“statutory”) The CAG-CSR Committee evaluated the level of achievement of the CSR criterion applicable to 10% of the variable compensation of the Executive Chairmen at its meeting of 24 February 2020 and noted that the three indicators making up the criterion were fully achieved (see table below). Consequently, the variable compensation for the financial year 2019 has been calculated by applying the change in the company’s consolidated net income before tax for 2019 compared with 2018, i.e. an increase of 9.9%, to the variable compensation paid in 2019 for 2018. In accordance with Article L. 226-8-2, II of the French Commercial Code (Code de commerce), the payment of this variable compensation is subject to the approval by the Combined General Meeting of 24 April 2020 of the 8th resolution as concerns Mr Axel Dumas and the 9th resolution as concerns Émile Hermès SARL. 100% Gas and electricity consumption fell between 2018 and 2019, on a 12.4% increase in revenue at constant exchange rates over the same period (no scope effect was taken into account in this calculation). 100% The Group continued to pursue its ambitious strategy of putting down roots in local communities in 2019, both in France and internationally. Quantifiable environmental criterion. New sites outside major cities factor in the social, societal and environmental aspects of each locality. The Group has a very strong desire to revive these areas by creating both direct and indirect jobs, by forging long-term partnerships with all local actors and stakeholders in order to give life to practical and sustainable municipal and/or regional projects. Construction projects for new sites include a strong environmental ambition. 100% Constant attention is paid to the working conditions, pay and career development of all the Group’s employees. The aim is to apply a Group policy in favour of gender equality that promotes gender balance and inclusion in employment, training, management and pay through practical and ambitious measures. Level of achievement and justification

3

Fixed compensation in 2020 (“additional” compensation)

The fixed compensation for 2020 was calculated by applying the change in the Company’s consolidated revenue at constant rates for 2019

CSR criteria indicators

Importance

1/3

Quantifiable environmental criterion: decoupling between activity growth at constant scope and exchange rates and the evolution of industrial energy consumption Qualitative societal criterion: actions implemented in favour of the territorial anchoring of the Group in France and throughout the world, excluding major cities

1/3

Qualitative social criterion: Group initiatives in favour of gender balance

1/3

2019 UNIVERSAL REGISTRATION DOCUMENT HERMÈS INTERNATIONAL

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