L'Oréal - 2018 Registration Document

7 Annual General Meeting

DRAFT RESOLUTIONS AND REPORT OF THE BOARD OF DIRECTORS TO BE HELD ON 18 APRIL 2019

Sixth resolution: Approval of the principles and criteria for the determination, allocation and distribution of the components of the total remuneration and the benefits of all kinds that may be granted to the executive officers The Annual General Meeting, deliberating in accordance with Commercial Code, approves the principles and criteria for the the quorum and majority requirements for Ordinary General determination, allocation and distribution of the components Meetings, having reviewed the Report of the Board of Directors of the total remuneration and the benefits of all kinds that may drawn up pursuant to Article L. 225-37-2 of the French be granted to the executive officers. RESOLUTION 7: APPROVAL OF THE FIXED AND VARIABLE COMPONENTS OF THE TOTAL REMUNERATION AND BENEFITS OF ALL KINDS PAID OR ALLOCATED TO MR JEAN-PAUL AGON FOR THE 2018 FINANCIAL YEAR DUE TO HIS OFFICE AS CHAIRMAN AND CHIEF EXECUTIVE OFFICER

remuneration and benefits of all kinds paid or allocated to Mr Jean-Paul Agon for the 2018 financial year on the basis of his office as Chairman and Chief Executive Officer must be approved by the Ordinary General Meeting.

EXPLANATORY STATEMENT

Pursuant to Article L. 225-100 of the French Commercial Code, the fixed and variable components of the total

SUMMARY TABLE OF COMPONENTS OF REMUNERATION PAID OR ALLOCATED FOR THE 2018 FISCAL YEAR

Components of remuneration paid or allocated for the 2018 financial year Fixed remuneration 2018/2017 changes

Amounts or accounting valuation put to the vote €2,200,000 0% €2,045,998 93.0% out of a maximum target of 100% of the fixed remuneration

Description

At its meeting on 8 February 2018, the Board of Directors decided, on the proposal of the Human Resources and Remuneration Committee, to maintain the fixed gross annual remuneration of Mr Jean-Paul Agon at €2,200,000. The annual variable remuneration is designed to align the remuneration allocated to the Chairman and Chief Executive Officer with the Group’s annual performance and to promote the implementation of its strategy year after year. The Board of Directors’ intention is to encourage the Chairman and Chief Executive Officer both to maximise performance in each financial year and to ensure that it is repeated and regular year on year. Annual variable remuneration can amount to a maximum of 100% of the fixed remuneration. CRITERIA FOR ASSESSMENT OF THE PERFORMANCE FOR 2018 FINANCIAL CRITERIA s Growth in comparable sales as compared to the budget s Growth in market share as compared to the main competitors s Growth in operating profit as compared to 2017 s Growth in net earnings per share as compared to 2017 s Growth in cash flow as compared to 2017 s EXTRA-FINANCIAL AND QUALITATIVE CRITERIA s Quantifiable criteria (allocated equally among the following criteria) s CSR (Sharing Beauty With All programme): Innovating sustainably, Producing - sustainably, Living sustainably; Developing sustainably; Human Resources: Gender parity, Development of talented employees, Access to - training; Digital Development - Individual qualitative performance: s Management, Image, Company reputation, Dialogue with stakeholders. The assessment is carried out on a criterion-by-criterion basis without offsetting among the criteria. A summary of achievements in 2018 is available on pages 102 of the Registration Document. ASSESSMENT FOR 2018 BY THE BOARD OF DIRECTORS OF 7 FEBRUARY 2019 On the basis of the above-mentioned assessment criteria, the Board of Directors decided, on the proposal of the Human Resources and Remuneration Committee, to award gross variable remuneration of €2,045,998 for 2018, namely 93.0% of the maximum objective, with a level of achievement of the financial and extra-financial and qualitative criteria of 91.7% and 95.0% respectively. The level of achievement for each financial criterion as well as the assessment of non-financial achievements are provided on pages 102-103 of the Registration Document. Pursuant to Article L. 225-100 of the French Commercial Code, the payment of this annual variable remuneration is subject to the approval of this seventh resolution. 60% 15% 15% 10% 10% 10% 40% 25% 15%

Annual variable remuneration

REGISTRATION DOCUMENT / L'ORÉAL 2018

368