L'Oréal - 2018 Registration Document

Corporate Governance REMUNERATION OF THE EXECUTIVE OFFICERS

vieillesse). The Board did, however, note that because the coefficient had not changed in 2018, the pension calculation basis remained unchanged; his seniority in his corporate office between 17 April 2018, s the renewal date, and 1 September 2018, when he reached

the 40-year seniority ceiling provided for by the scheme, will be taken into account. Pursuant to Article L. 225-40-1 of the French Commercial Code, the terms of this commitment was examined by the Board of Directors on 7 February 2019, which confirmed the relevance and terms thereof.

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4) AMF summary table The table set out below, presented in the form recommended by the AMF, clearly shows that there are no concurrent benefits under the suspended employment contract and the corporate office. It is moreover stated that the AMF considers that a company complies with the AFEP-MEDEF Code when it explains the maintenance of the employment contract of a senior manager as being due to his length of service as an employee in the Company and his personal situation and provides detailed substantiation in this respect.

Indemnities or benefits due or which may become due as a result of termination or change of duties (4)

Mr Jean-Paul Agon, (1) Chairman and Chief Executive Officer

Supplementary pension scheme (3)

Indemnities relating to a non-competition clause (5)

Employment contract (2)

Yes

No

Yes

No

Yes

No

Yes

No

X X Mr Jean-Paul Agon has been a Director since 25 April 2006, the date on which he was appointed as Chief Executive Officer. His term of office was renewed at the Annual (1) General meeting on 27 April 2010. Mr Jean-Paul Agon has been Chairman and Chief Executive Officer since 18 March 2011. His term of office was renewed on 17 April 2014, and on 17 April 2018 for a four-year period. Mr Jean-Paul Agon’s employment contract is suspended throughout the entire length of his corporate office. (2) Pursuant to his employment contract, Mr Jean-Paul Agon is entitled to benefit from the “Garantie de Retraite des Membres du Comité de Conjoncture” (Pension Cover of the (3) Members of the Comité de Conjoncture) as described in chapter 3. This defined benefit pension scheme provides that the building up of rights to benefits is conditional on the beneficiary ending his career in the Company; the funding of this scheme by L’Oréal cannot be broken down individually by employee. No indemnity is due in respect of termination of the corporate office. In respect of the employment contract, pursuant to the schedule of indemnities of the National (4) Collective Agreement for Chemical Industries, in the event of termination, except in the case of gross misconduct or gross negligence, the termination indemnity would be capped, in light of Mr Jean-Paul Agon’s length of service, at 20 months’ remuneration related to the employment contract (see section 2.5.2.4 on the accumulated amount of the contractual indemnity and the indemnity due in consideration of the non-competition clause). In respect of the employment contract, pursuant to the provisions of the National Collective Agreement for Chemical Industries, in the event of termination of the employment (5) contract (excluding compulsory retirement on the Company’s initiative), the indemnity due in consideration of the non-competition clause would be payable every month for two years on the basis of two thirds of the monthly fixed remuneration related to the employment contract unless Mr Jean-Paul Agon were to be released from application of the clause (see section 2.5.2.4 on the accumulated amount of the contractual indemnity and the indemnity due in consideration of the non-competition clause). PROCEDURE FOR SETTING THE REMUNERATION OF THE EXECUTIVE OFFICER 2.5.3. Remuneration is established in such a way as to guarantee the due and proper application of the policy and rules set by the Board of Directors. It bases its decision on the work and recommendations of the Human Resources and Remuneration Committee which has the necessary information to prepare its recommendations, and more particularly to assess the performances of the executive officer in light of the Group’s short-and long-term objectives. consumer goods market, as regards all or part of their business activities. The 2019 panel comprised Directors of the following 14 companies: Beiersdorf, Colgate-Palmolive, Coty, Danone, Estée Lauder, GSK, Henkel, Johnson & Johnson, Kimberly Clark, Kering, LVMH, Procter & Gamble, Reckitt Benckiser, Unilever. It is used to assess the competitiveness of the executive officer’s total remuneration. X X

The Human Resources and 2.5.3.1.

In terms of market capitalisation, L’OREAL is above the 3 rd quartile of companies on this panel, and above the average in terms of net sales. According to an analysis by an independent firm for the 2017 financial year, Mr Agon’s remuneration was above the average of companies on the panel, between the mid-point and the 3 rd quartile. This level is in line with the Company’s remuneration policy, specifically the one in place for senior managers which aims to position their remuneration between the mid-point and 3 rd quartile.

Remuneration Committee uses the studies conducted by an independent consulting firm.

These studies are based on an international panel of world leaders, which serves as a reference for the comparative remuneration studies. This panel is made up of French and international companies that hold the position of global leader. These companies operate on similar markets and are, in the cosmetics sector, direct competitors of L’Oréal, or operate on the wider everyday

REGISTRATION DOCUMENT / L'ORÉAL 2018

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