HERMÈS - 2020 Universal registration document

CORPORATE GOVERNANCE COMPENSATION AND BENEFITS OF CORPORATE OFFICERS

incentive schemes involving employees with the development of • locally determined indicators that are relevant with regard to the activity and environment of each of the French subsidiaries, notably quality, safety and productivity, a Group profit-sharing agreement giving all employees of • companies in France a share of the Group’s profits in a harmonised manner, other mechanisms enabling employees of foreign subsidiaries to • benefit from additional compensation adapted to local performance and practices, lastly, voluntary and supra-legal social protection and pension • plans, set up by the subsidiaries in order to supplement the employer offer in a comprehensive and competitive manner and to offer compensation and social protection schemes in the short, medium and long term. The Group’s employee compensation policy is ambitious and comprehensive; it incorporates a wide range of compensation tools. The budget guidelines for wage increases during the annual salary review take account of inflation and changes in local wage markets. Particular attention is paid to gender equality and gaps in relation to the market (internal and external). Specific budgets may be provided if adjustments are necessary. Hermès is committed to rewarding employee performance at both the collective and individual levels, and the development of variable compensation at both levels in recent years also reflects this commitment. 3.7.1.1.3 Measures to avoid or manage conflicts of interest (Article R. 22-10-40, I-2° of the French Commercial Code) A number of measures have been implemented to prevent possible conflicts of interest: the maximum amount of variable compensation set by the Articles of s Association (“statutory compensation”) of the Executive Chairmen is determined by the Articles of Association (Article 17); the maximum amount of fixed (“additional”) compensation of the s Executive Chairmen and its indexation were determined by the Ordinary General Meeting of 31 May 2001; since its creation on 24 March 2010, the CAG-CSR Committee of the s Supervisory Board of Hermès International has been tasked each year with ensuring that compensation paid to the Executive Chairmen complies with the provisions of the Articles of Association and the decisions made by the Active Partner; changes to the two components of the compensation of Executive s Chairmen depend on objective and comprehensible quantifiable qualitative criteria unaltered for many years, that are public and predefined by nature, as described in § 3.7.1.2;

when setting the actual amount of each Executive Chairman’s s compensation set by the Articles of Association (“statutory compensation”), the Executive Management Board of Émile Hermès SARL uses the recommendations of the CAG-CSR Committee and takes into account in its decision the performance achieved by the Group in respect of the prior financial year, the strategic challenges in respect of the Group’s medium- and long-term development and the competitive environment in which it operates; since 2020, the compensation policy for the Executive Chairmen has s been subject to the advisory opinion of the Supervisory Board and the approval of the General Meeting, and the actual compensation of the Executive Chairmen is subject to a decision by the Supervisory Board. Pursuant to Article R. 22-10-40, V of the French Commercial Code, the compensation policy for Corporate Officers, together with the date and result of the last ex-ante vote in the General Meeting, is disclosed on the Company’s financial website https://finance.hermes.com/en/ corporate-officers on the business day following the date of the vote. Pursuant to Article 26.1 of the Afep-Medef Code updated in January 2020, all potential or vested compensation of the Executive Chairmen is disclosed on the Company’s financial website https://finance.hermes.com/en/corporate-officers immediately after the meeting of the Executive Management Board of Émile Hermès SARL, Active Partner, that approved it. 3.7.1.1.4 Disclosure methods of the compensation of Corporate Officers

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2020 UNIVERSAL REGISTRATION DOCUMENT HERMÈS INTERNATIONAL

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