Hermès // CSR Extract 2023

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CORPORATE GOVERNANCE THE COMPANY’S CORPORATE GOVERNANCE CODE

The very specific functioning of an SCA and the organization of powers between the Executive Management, the Supervisory Board and the Active Partner make certain recommendations of the Afep‑Medef

Code inapplicable. These recommendations have therefore been rejected or adapted by Hermès International due to its legal form. No recommendations were dismissed for other reasons.

Provisions of the Afep‑Medef Code not applied due to the Company’s legal form The Board and CSR (Articles 5.1 to 5.3) The Board’s missions are strengthened so that it determines the multi‑year strategic orientations in terms of CSR and is the guarantor of their implementation.

Explanations

The Supervisory Board of Hermès International has powers strictly defined by the Company’s Articles of Association and does not have the authority to determine the strategic orientations that fall within the exclusive competence of the Executive Management. It is therefore the responsibility of the Executive Management to: determine the CSR strategy including climate objectives; s decide on the implementation methods: action plan and time horizons within which these actions will be carried out; s annually review the results obtained and the opportunity to adapt the action plan or modify the objectives in light of changes in the Company’s strategy, technologies, shareholder expectations and the economic capacity to implement them. s The governance put in place by Executive Management to monitor CSR issues is presented in chapter 2 “Corporate social responsibility and non‑financial performance”, § 2.1.6). As part of its management control role, the multi‑year strategic guidelines in terms of CSR and their implementation methods were presented to the Supervisory Board. The results obtained are presented each year to the CAG‑CSR Committee, which reports to the Supervisory Board. This provision of the Afep‑Medef Code is therefore not applicable to Hermès International, given its legal form and the role assigned to the Supervisory Board (described in § 3.5.1). Hermès International’s Supervisory Board holds powers that are strictly defined by the Company’s Articles of Association and does not have the power to appoint the Executive Chairmen or determine their compensation policy. These decisions are the responsibility of the Active Partner, Émile Hermès SAS, under the aegis of its Executive Management Board. Furthermore, and this is an essential point of the Company’s governance, the duties of the Supervisory Board do not entail any involvement in the Executive Management, nor any liability for management actions and the results thereof. This provision of the Afep‑Medef Code is therefore not applicable to Hermès International, given its legal form and the role assigned to the Supervisory Board (described in § 3.5.1). The Company’s CAG‑CSR Committee (described in § 3.6.2) is not in charge of establishing the succession plan for the Executive Chairmen, a task that does not fall within the remit of the Supervisory Board in a société en commandite par actions (partnership limited by shares). In accordance with its rules of procedure, since 2016 the CAG‑CSR Committee has been tasked with ensuring the existence of a succession plan for the Executive Chairmen, which is reviewed annually (see § 3.3.5.1). Since 2018, the CAG‑CSR Committee has also ensured the existence of a succession plan for the Chairman of the Supervisory Board (see § 3.4.4) and this mission is included in its rules of procedure (see https://finance.hermes.com/en/governing‑bodies‑rules‑procedure‑articles‑association/). This recommendation is primarily intended for monist or dual‑tier sociétés anonymes (public limited companies) since it is up to the Board of Directors or the Supervisory Board of such structures to establish the compensation policy and the effective compensation of Executive Corporate Officers (Article L. 225‑37‑2 of the French Commercial Code ( Code de commerce )). Its application remains debatable in the case of sociétés en commandite par actions (partnerships limited by shares) (SCA). In an SCA, the Supervisory Board is the body representing the Limited Partners. Its duties and powers of control are defined as those of a Statutory Auditor. The Supervisory Board of an SCA has exceptional powers of control (in the audit sense) of the management of the company, as a counterpart to the dormant partner role of the Limited Partners. The Supervisory Board of Hermès International has powers strictly defined by the Company’s Articles of Association and does not have the authority to determine the compensation policy for the Executive Chairmen, which falls within the sole remit of the Active Partner Émile Hermès SAS, under the aegis of its Executive Management Board. The law (Article L. 226‑8‑1 of the French Commercial Code) provides that the role of the Supervisory Board of an SCA is limited to issuing an advisory opinion on the compensation policy and deliberating on the actual compensation. The role of Hermès International’s CAG‑CSR Committee is strictly limited to that of monitoring compliance with the Articles of Association and the compensation policy and monitoring the actual compensation proposed by the Active Partner as well as the assessment of the achievement of the variable compensation CSR criterion. The responsibilities of the CAG‑CSR Committee therefore do not correspond to the responsibilities of the Committee in charge of compensation as defined by the Afep‑Medef Code. The Board therefore decided to set aside this provision of the Code, in a clear, relevant and detailed manner, due to the legal form of the company. The role of the Supervisory Board in the decision‑making process applicable to the compensation policy for the Executive Chairmen is described in § 3.8.1.2.

Board meetings and Committee meetings (Article 12.3) It is recommended that at least one meeting not attended by the Executive Corporate Officers be organised each year.

Succession plan for Executive Corporate Officers (Article 18.2.2) The Appointments Committee (or an ad hoc committee) should design a plan for replacement of Executive Corporate Officers. This is one of the Committee’s most important tasks even though it can, if necessary, be entrusted by the Board to an ad hoc committee. The Chairman may take part or be involved in the Committee’s work during the conduct of this task. Composition of the Compensation Committee (Article 19.1) The Compensation Committee “shall not include any Executive Corporate Officers and shall be composed of a majority of independent directors. It is recommended that the Chairman of the Committee be independent and that an employee director be a member.” This recommendation is supplemented in Article 19.2 by the description of the powers of the Compensation Committee, as defined by Afep‑Medef: “The compensation committee is responsible for reviewing and proposing to the Board all of the elements determining the compensation and entitlements accruing to the company officers. The Board of Directors in its entirety is responsible for making the corresponding decisions. "

2023 UNIVERSAL REGISTRATION DOCUMENT HERMÈS INTERNATIONAL 276 EXTRACT FROM 2023 UNIVERSAL REGISTRATION DOCUMENT HERMÈS INTERNATIONAL 4