L'Oréal - 2018 Registration Document

2 Corporate Governance

REMUNERATION OF THE EXECUTIVE OFFICERS

The studies conducted with the independent consulting firm also enable the Committee to measure: the comparative results of L’Oréal in light of the criteria s adopted by the Group to assess the executive officer’s performance; the link between the executive officer’s remuneration and s his performance; the relevance over time of the remuneration structure and s the objectives assigned to him.

The Chairman of the Human Resources and Remuneration Committee is a member of the Audit Committee and participates in the closing of the financial statements as well as the examination of the risk prevention policy. She is also president of the Appointments and Governance Committee, which offers her a Company-wide vision of the various performance assessment criteria. The committee can also carry out a more in-depth evaluation of the Company’s performance by contacting the Company’s main senior managers, after informing the General Management. This information enriches their vision of the strategy and performances of the Company and its executive officer. The recommendations to the Board of Directors are made on these bases, and the Board then makes its decisions collectively concerning the executive officer’s remuneration. The organisation of the work of the Human Resources and Remuneration Committee concerning the remuneration of the executive officer is shown in the chart on the next page.

The Human Resources and 2.5.3.2. Remuneration Committee has all useful internal information in its possession

This information enables it to assess the performance of the Company and that of its executive officer both from an economic standpoint and in non-financial fields. The Group’s annual economic and financial results are presented every year completely and exhaustively to the members of the Human Resources and Remuneration Committee at its meeting in February, and are used as a basis for the assessment of the financial performance criteria for the executive officer’s variable remuneration. The principles of the Human Resources policy are regularly presented to the Committee members or at a Board of Directors meeting by the Executive Vice-President Human Resources. Similarly, the Senior Vice-President, Chief Ethics Officer, also regularly explains the policy and the actions taken in this field. Two members of the Human Resources and Remuneration Committee are members of the Strategy and Sustainable Development Committee at which the actions taken with regard to the programmes concerning the Group’s social and environmental responsibility are discussed. This information contributes to the assessment of the qualitative portion of the annual variable remuneration.

The Committee examines the 2.5.3.3.

expectations of investors and proxy advisors, and the rules and recommendations of the regulatory authorities.

The Human Resources and Remuneration Committee carefully analyses the law and reports concerning executive remuneration, notably the French markets authority’s (AMF) report on corporate governance and the remuneration of executives of listed companies, and the report of the High Committee on Corporate Governance. It is mindful of the observations and requests of investors and strives to accommodate them while preserving consistency in the remuneration policy adopted by the Board and subject to constraints relating to the disclosure of confidential information.

REGISTRATION DOCUMENT / L'ORÉAL 2018

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