LEGRAND_REGISTRATION_DOCUMENT_2017

06

CORPORATE GOVERNANCE

Compensation and benefits of company officers

criterion by an adjusted operating margin criterion, and (ii) increased weighting of organic and external growth criteria. While in no way altering the degree of stringency of the criteria,

these changes enable complete consistency between the quantifiable targets and the Company’s disclosed target.

Min Target

Max Actual

As a % of fixed compensation

Operating margin

2017 adjusted operating margin (at 2016 perimeter) 2017 organic revenues growth 2017 revenues growth (including the effect of the acquisitions) Legrand’s inclusion in CSR benchmark indices

0% 32% 48% 48.0%

Indicator value

19.3% 19.7% 20.1% 20.1%

Organic growth of revenues

As a % of fixed compensation

0% 12% 18% 18.0%

Quantifiable portion: 3/4 of annual variable i.e., 60% of fixed compensation (as a target)

Indicator value

0% 1.5% 3.0% 3.1%

As a % of fixed compensation

External growth

0% 8% 12% 10.2%

Indicator value

0% 5% 10% 7.8%

Corporate Social Responsibility (CSR)

As a % of fixed compensation

0% 8% 12% 3.2%

Indicator value

7

12

14

9

QUANTIFIABLE TOTAL

0% 60% 90% 79.4%

Revenues growth

Evolution market share, new products, sales policies, access to new markets, partnerships (including outside France), expansion in the new economies

0% 8% 12% 12.0%

Qualitative portion: 1/4 of annual variable i.e., 20% of fixed compensation (as a target)

External growth policy Compliance with set priorities, emphasis on multiples paid, quality of integration for acquisitions already made

0% 8% 12% 12.0%

General criteria

Risk management, labor issues, successions plans

0% 4% 6% 5.0%

QUALITATIVE TOTAL

0% 20% 30% 29.0%

VARIABLE TOTAL AS A % OF FIXED COMPENSATION

0% 80% 120% 108.4%

2016 perimeter) equal to 19.7%; such figure varying between 0% and 48% of the fixed compensation for an adjusted operating margin (based on the 2016 perimeter) between 19.3% and 20.1% (annual target disclosed to the market at the beginning of 2017). The performance achieved in 2017 was 20.1%, representing 48% of the fixed compensation, W the target defined was 12% of fixed compensation (target value) for an organic growth of revenues of +1.5%, such figure varying between 0% and 18% of the fixed compensation for an organic growth in revenues between 0% and +3% (annual target disclosed to the market at the beginning of 2017). The performance achieved in 2017 was +3.1%, representing 18% of the fixed compensation, W the target defined was 8% of the fixed compensation (target value) for a growth in 2017 revenues (including the effect of the acquisitions) of 5%, such figure varying between 0% and 12% of the fixed compensation for a growth of revenues (including the effect of the acquisitions) between 0% and +10%. The performance achieved in 2017 was +7.8%, representing 10.2% of the fixed compensation,

Therefore, for the 2017 financial year, quantifiable and qualitative targets were achieved up to 90.3% (equal to 108.4% divided by 120%) out of the maximum, i.e. 135.5% (equal to 108.4% divided by 80%) of the target. As a result, Mr. Gilles Schnepp’s variable compensation for 2017 amounted to €677,500. However, on his own initiative, Mr. Gilles Schnepp waived a portion of his variable compensation for 2017 in order to maintain it at the 2016 level of €535,000. The principles (as well as the achievements) governing the determination of the variable portion of Mr. Gilles Schnepp’s 2017 annual compensation, as calculated in the above table, are as follows: a) the target value of the quantifiable portion was set at 60% of the fixed compensation, with a possible variation between 0% and 90% of said fixed compensation. The 2017 achievement of this quantifiable portion reached 79.4% of the fixed compensation, determined as follows: W the target defined was 32% of the fixed compensation (target value) for a 2017 adjusted operating margin (based on the

198

REGISTRATION DOCUMENT 2017 - LEGRAND