LEGRAND_REGISTRATION_DOCUMENT_2017

06

CORPORATE GOVERNANCE

Compensation and benefits of company officers

6.2 – COMPENSATION AND BENEFITS OF COMPANY OFFICERS

6.2.1 –Principles and criteria for the determination, breakdown and allocation of fixed, variable and exceptional elements of compensation and any benefits due to company officers in respect of their office

The principles and criteria for the determination, breakdown and allocation of fixed, variable and exceptional components of overall compensation and any benefits attributable to company officers in respect of their office, which constitute the compensation policy applicable to them, are established by the Board of Directors based on the recommendation of the Compensation Committee, which helped to produce this chapter. These principles and criteria are part of the corporate governance report required under article L. 225-37-2 of the French Commercial Code, which is subject to shareholder approval. This report can be found in Appendix 2 of this Registration Document. R 6.2.1.1 UNDERLYING PRINCIPLES OF THE COMPENSATION POLICY The compensation policy for company officers is determined by the Board of Directors upon the recommendation of the Compensation Committee on the basis of the principlesmentioned in the Code of Corporate Governance: comprehensiveness, balance between the compensation components, comparability, consistency, understandability of the rules and proportionality. The Board of Directors ensures that the compensation policy is in line with market practice for comparable companies, is tailored to the Company’s strategy and situation and is designed to boost the Company’s performance and competitiveness in the medium and long term. The underlying principles for the compensation of company officers in 2018 remain essentially unchanged compared to 2017. Profitable growth and value creation on the long run taking into account all stakeholders within a broader definition of the business, are central to the Company’s compensation policy and practices: W total compensation should be balanced and consistent with the Company’s strategy; W the compensation structure (and financial and non-financial performance-based variable compensation in particular) should be aligned with shareholders’ interests and contribute to the Company’s profitable and sustainable growth; W performance criteria should be stringent and correspond to the key factors of profitable and sustainable growth of the

Company, and more generally be aligned with the Company’s short- and long-term objectives; W a significant proportion of variable compensation is based on the Company’s performance relating to corporate social responsibility (CSR); W lastly, the compensation policy, which is simple and transparent, must ensure a level of attractiveness for company officers while continuing to be fair and acceptable to stakeholders. As part of the separation of the functions of Chairman of the Board of Directors and Chief Executive Officer, the Board of Directors had undertook to define the compensation structures and levels applicable to the Chairman of the Board of Directors and to the Chief Executive Officer in accordance with the principles mentioned above as well as market practices and the compensation observed for similar functions in CAC 40 companies. R 6.2.1.2 COMPENSATION POLICY FOR THE CHAIRMAN OF THE BOARD At its meeting on March 20, 2018, and upon the recommendation of the Compensation Committee, the Board of Directors, taking market practices into account and in accordance with the recommendations of the Code of Corporate Governance, decided that the compensation structure that is most suited to the Chairman of the Board of Directors for the 2018 financial year as of February 8, 2018 consisted in paying a fixed compensation as the sole compensation component. The Board of Directors has decided that the annual fixed compensation of the Chairman of the Board of Directors, Mr. Gilles Schnepp, will amount to €625,000, corresponding to the amount of the fixed compensation attributable to him in respect of his office as Chairman and Chief Executive Officer, before the separation of the offices of Chairman of the Board of Directors and Chief Executive Officer. This amount of annual fixed compensation for the Chairman of the Board of Directors was determined by the Board of Directors, upon a proposal from the Compensation Committee, in accordance with the principles described in section 6.2.1.1 of this chapter, and in line with the OF DIRECTORS FOR 2018, AS OF FEBRUARY 8, 2018

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REGISTRATION DOCUMENT 2017 - LEGRAND