Hermès // 2021 Universal Registration Document

6

PARENT COMPANY FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS

HEADCOUNT, PERSONNEL COSTS AND EMPLOYEE BENEFITS

NOTE 3 Average number of employees 3.1

31/12/2021

31/12/2020

Executives and managers Non-management staff

475

453

49

44

TOTAL

524

497

Compensation and other personnel costs 3.2

2021 (78)

2020 (71)

Note

In millions of euros Compensation

2016 free share plans 2019 free share plans

3.4 3.4

(0) (4)

(5) (6)

Social security charges on compensation and free share plans

(31)

(27)

COMPENSATION AND OTHER PERSONNEL COSTS

(113)

(108)

Post-employment obligations and other employee benefits 3.3

Accounting principles For basic pension and other defined-contribution plans, Hermès International recognises contributions to be paid as expenses when they come due and no provision is accrued in this respect, as the Company has no obligation other than the contributions paid. Hermès International’s obligations in relation to retirement benefits and long-service awards are calculated annually by an independent actuary using the projected unit credit method. This method is based on actuarial assumptions and takes into account the employee’s probable future length of service, future salary and life expectancy as well as staff turnover. The present value of the obligation is calculated by applying an appropriate discount rate. It is recognised on a basis pro-rated to the employee’s years of service.

Benefits are partly funded in advance by external funds (insurance companies). Assets held in this way are measured at fair value. The expense recognised in the income statement is the sum of: the service cost, which reflects the increase in obligations arising s from the vesting of one additional year of benefits; and the interest expense, which reflects the increase in the present s

value of the obligations during the period; actuarial gains and losses for the period. s

As indicated in the note on changes in policies for the year (see Note 1), actuarial gains and losses are immediately recognised in profit or loss.

As at 31 December 2021, the commitment in terms of retirement benefits and long-service awards amounted to €126 million pre-financed in the amount of €6 million with an insurance company.

The net amount of the commitment of €120 million is recognised in provisions for risks and expenses in the liabilities of Hermès International.

For the 2020 and 2021 financial years, the following actuarial assumptions were used:

2021

2020

retirement age s

62 to 65 years

62 to 65 years

increase in salaries s

3 to 4%

3 to 4%

discount rate s

0.5% to 0.8% 1.75% to 2.5%

0.3% to 0.6% 1.75% to 2.5%

expected rate of return/asset s

418 2021 UNIVERSAL REGISTRATION DOCUMENT HERMÈS INTERNATIONAL