Hermès - Registration Document 2016

CORPORATE GOVERNANCE

REPORT FROM THE CHAIRMAN OF THE SUPERVISORY BOARD ON THE CORPORATE GOVERNANCE PRINCIPLES

s to draw up proposals and recommendations on the total amount of directors’ fees and other compensation and benefits awarded to members of the Supervisory Board and of its specialised com- mittees, and on the apportionment thereof, primarily on the basis of Board members’ attendance at meetings; s to review proposals for stock subscription or purchase options and bonus share distributions to Senior Executives in order to enable the Supervisory Board to determine the aggregate or individual num- ber of options or shares allotted, and the terms and conditions of allotment; s to review proposals for stock subscription or purchase options and bonus share distributions for employees and to draw up recommen- dations thereon for submission to the Executive Management; s to assist the Supervisory Board in determining the conditions and performance criteria to be applied in the allocation of stock subscrip- tion or purchase options, performance-based shares and/or additio- nal pensions to Executive Chairmen; s to ascertain that the compensation of the Executive Chairmen com- plies with the provisions of the Articles of Association and the deci- sions made by the Active Partner; s to remain informed and to make recommendations to the manage- ment or supervisory bodies of themain French subsidiarieswithin the Hermès Group, relative to the compensation of Executive Corporate Officers; s to remain informed and to make recommendations to the manage- ment or supervisory bodies of the main French subsidiaries within the Hermès Group, relative to granting options to purchase shares to Executive Corporate Officers; s to perform specific assignments entrusted to it by the management or supervisory bodies of the main French subsidiaries within the Hermès Group. With respect to appointments: s to prepare the Board’s proposals to the Active Partner after exami- ning all the elements which it must take into account in its delibera- tion: balance to be sought in the composition of the Board in light of the composition of, and changes in, the Company’s shareholders, search for and appraisal of possible candidates and advisability of reappointments; s to organise a selection procedure for future independent members of the Board and carry out its own research on potential candidates, to which the Executive Chairmen are associated; s to ensure a plan of succession of the Executive Corporate Officers (the Executive Chairmen) drawn up by the Active Partner. With respect to corporate governance: s to recommend revisions to corporate governance rules, as needed; s to periodically ascertain that independent Supervisory Board members meet the criteria pertaining to independence and objec- tiveness set out in the Supervisory Board rules of procedure;

Compensation, Appointments and Governance Committee rules of procedure Effective 22 March 2016 – Version no. 5 Purpose These rules of procedure define the composition, missions andmethods of organisation and operation of the Compensation, Appointments and Governance Committee of Hermès International, which acts under the collective and exclusive responsibility of the Supervisory Board. Their purpose is to enhance the quality of the Compensation, Appointments and Governance Committee’s work by promoting the application of good corporate governance principles and best practices, in the interests of ethics and greater effectiveness. A. Composition of the Compensation, Appointments and Governance Committee Chairmanship – Number of members The Chairman of the Compensation, Appointments and Governance Committee is appointed by the Supervisory Board. The Compensation, Appointments and Governance Committee com- prises at least three members of the Supervisory Board. Proportion of independent members At least half of the members of the Compensation, Appointments and Governance Committee must, at the time of their appointment and for the duration of their office, be qualified as independent as defined in the Supervisory Board rules of procedure. Term of appointment to the Compensation, Appointments and Governance Committee The members of the Compensation, Appointments and Governance Committee are appointed by the Supervisory Board for the duration of their term of office as a member of the Supervisory Board or for any other period defined by the Supervisory Board. They may be reappointed indefinitely. B. Tasks of the Compensation, Appointments and Governance Committee The Compensation, Appointments and Governance Committee studies and prepares certain proceedings of the Supervisory Board and submits its opinions, proposals and recommendations to the Board. Without prejudice to the powers of the Supervisory Board, which it does not replace, the Compensation, Appointments and Governance Committee missions are: With respect to compensation: s to receive information and draw up recommendations from the Board to the Executive Management on the terms and conditions of com- pensation paid to Executive Committee members; s to receive information and draw up recommendations from the Board to the Executive Management on the terms and conditions of allot- ment of any stock options and bonus shares granted to Executive Committee members;

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s to review the composition of the specialised committees;

s to oversee the annual assessment of Supervisory Board practices;

2016 REGISTRATION DOCUMENT HERMÈS INTERNATIONAL

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