Hermès // 2022 UNIVERSAL REGISTRATION DOCUMENT

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PARENT COMPANY FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS

HEADCOUNT, PERSONNEL COSTS AND EMPLOYEE BENEFITS

NOTE 3

3.1 Average number of employees

31/12/2022

31/12/2021

Executives and managers Non‑management staff

496

475

53

49

TOTAL

549

524

3.2 Compensation and other personnel costs

Note

2022 (84)

2021 (78)

In millions of euros Compensation

2016 free share plans 2019 free share plans

3.4 3.4

-

(0) (4)

(4)

Social security charges on compensation and free share plans

(51)

(31)

COMPENSATION AND OTHER PERSONNEL COSTS

(139)

(113)

3.3 Post‑employment obligations and other employee benefits

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 from the vesting of one additional year of benefits; and s the interest expense, which reflects the increase in the present value of the obligations during the period; s actuarial gains and losses for the period. s Actuarial gains and losses are recognized immediately through profit or loss.

The net amount of the commitment of €78 million is recognised in provisions for risks and expenses in the liabilities of Hermès International.

As at 31December 2022, the commitment in terms of retirement benefits and long‑service awards amounted to €100 million pre‑financed in the amount of €22 million with an insurance company.

For the 2021 and 2022 financial years, the following actuarial assumptions were used:

2022

2021

Retirement age s Increase in salaries s Discount rate s Expected rate of return/asset s

62 to 65 years

62 to 65 years

3.5 to 4%

3 to 4%

3.3% to 3.5% 3.3% to 3.5%

0.5% to 0.8%

1.75% to 2.5%

2022 UNIVERSAL REGISTRATION DOCUMENT HERMÈS INTERNATIONAL

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