HERMÈS - 2019 Universal Registration Document

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CORPORATE GOVERNANCE SUPERVISORY BOARD'S' REPORT ON CORPORATE GOVERNANCE

COMPENSATION PAID TO THE CHAIRMAN OF THE SUPERVISORY BOARD IN THE COURSE OF OR ALLOCATED IN RESPECT OF 2019

earn more. It differs from the average wage, which is the average of all wages in the company in question; the numerator shows the gross compensation (excluding social s security contributions) and benefits of all kinds paid to each Executive Chairman during the financial year, i.e .: the fixed (“additional”) compensation paid during the year under • review, the (“statutory”) variable compensation paid during the year under • review in respect of the prior year, the exceptional compensation paid, if any, during the year under • review, other long-term compensation instruments and multi-year variable • compensation paid, where applicable, during the year under review (taken at their IFRS value), , less an annual amount depending on the length of the vesting period(s), benefits in kind (valued); • the denominator shows the gross compensation (excluding social s security contributions) of employees (continuously present in the year under review between 1 January and 31 December) of Hermès International paid during the year, i.e .: the fixed compensation paid during the year under review, • the variable compensation paid during the year under review in • respect of the prior year, the exceptional compensation paid, if any, during the year under • review, other long-term compensation instruments, in particular grants of • free shares, when the rights were allocated or were vesting during the current financial year; measured at their IFRS value, less an annual amount depending on the length of the vesting period(s), employee savings: profit-sharing and incentive schemes, • benefits in kind (valued); • the following are excluded from the numerator and denominator: s severance payments and non-compete payments, which do not • constitute recurring compensation, defined-contribution supplementary pension plan (Article 83 of the • French General Tax Code), which is a post-employment benefit, the defined-benefit supplementary pension plan (Article 39 of the • French General Tax Code), which cannot be valued insofar as payment is conditional on the completion of the beneficiary’s career in the Company. With regard to the Company’s performance, it was decided to use the consolidated revenue (at constant rates) and the consolidated income before tax, which serve as a reference for the compensation of the Executive Chairmen and which are performance criteria that are particularly relevant to the Group’s business model.

3.5.2.2

All the fixed, variable and exceptional components comprising the total compensation and benefits in kind paid in the course of or awarded in respect of 2019 to the Chairman of the Supervisory Board, on which the shareholders are asked to give a binding ex-post vote, are set out in the explanatory memorandum of the 10 th resolution to be put to the General Meeting of 24 April 2020 (page 416 ). These components are consistent with the compensation policy for the Chairman of the Supervisory Board presented in section 3.5.1.3 above. In accordance with the new framework for Senior Executive compensation created by Order 2019-1234 of 27 November 2019, which comes into force for your company as of the Combined General Meeting of 24 April 2020, these components of compensation will be submitted for shareholder approval for the first time at the said meeting, and have therefore never previously been the subject of a compensation policy subject to an ex-ante vote by the shareholders.

RATIOS AND ANNUAL CHANGE IN

3.5.2.3

COMPENSATION, THE PERFORMANCE OF THE COMPANY, THE AVERAGE COMPENSATION OF EMPLOYEES AND RATIOS

(ARTICLE L. 225-37.3 – 6 AND 7 OF THE FRENCH COMMERCIAL CODE (CODE DE COMMERCE)

We present below: the changes over the last five years in the ratios between the level of s compensation of each Executive Chairman and the Chairman of the Supervisory Board and: the average pay on a full-time equivalent basis of the Company’s • employees other than Corporate Officers on the one hand, the median pay of the Company’s employees other than Corporate • Officers on a full-time equivalent basis on the other hand; the annual change in the compensation of the Executive Chairmen s and Chairman of the Supervisory Board, the performance of the Company, the average compensation on a full-time equivalent basis of Company employees other than Senior Executives, and ratios, over the past five years. The methodology used, in accordance with the guidelines developed by Afep, is as follows: the notion of full-time equivalent (FTE) reflects a job performed on a s full-time basis, i.e. as per legal working hours. As such, for part-time employees, compensation has been reconstituted on a full-time basis; based on the INSEE definition, the median wage is that which splits s the Company’s employees into two equal parts, such that half of the employees of the company in question earn less and the other half

2019 UNIVERSAL REGISTRATION DOCUMENT HERMÈS INTERNATIONAL

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