NEOPOST - 2018 Registration document

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Corporate governance report

Remuneration of managers and directors

fixed annual gross remuneration for his duties as Chief • Executive Officer of the Company of 510,000 euros paid in France; fixed annual gross remuneration of 112,000 United States • dollars for his duties as director of the subsidiary Mailroom Holding Inc., paid in the United States. This fixed remuneration appears to be in line with the practice of the chosen panel, both as regards structure and amount. The breakdown of the fixed annual gross remuneration between the various duties of Chief Executive Officer of the Company and director of the subsidiary Mailroom Holding Inc., may be reviewed under joint agreement, to take into account, in particular the time and resources dedicated to each of these duties. Variable annual remuneration depends on Chief Executive Officer performance, as well as on progress achieved by the Group. In 2019, for example, the variable component of Chief Executive Officer remuneration will represent 100% of the fixed component for quantitative and qualitative objectives achieved. This can rise to 150% if objectives are exceeded. It will break down according to the proportions of fixed remuneration between the Company and Mailroom Holding Inc. Variable remuneration is based on Group results regarding revenue, current operating income (1) and capital employed comprising 80% of the target bonus, with the remaining 20% comprising specific qualitative objectives regarding individual performance. 3° Variable annual remuneration

Decisions regarding the remuneration of the Chief Executive Officer are the responsibility of the Board of directors and are based on proposals from the remuneration and appointments committee. The remuneration of the Chief Executive Officer breaks down as follows:

1° Director fees

The Chief Executive Officer should receive 30,000 euros maximum in director’s fees in 2019 on an annual basis for his mandate as director of Neopost S.A.

2° Fixed annual remuneration

Fixed annual remuneration is set by the Board of directors following a recommendation from the remuneration and appointments committee implementing the principles of the Afep-Medef code. The fixed remuneration of the Chief Executive Officer has been established in relation to the scope of the position and practice observed in French and international groups where the activity, revenue, market capitalization, number of employees and challenges are similar to those of Neopost. For 2019, as in each year, the remuneration and appointments committee uses studies produced by the external consultants Willis Towers Watson to obtain remuneration benchmarks for all of the management team positions. As regards remuneration of the Chief Executive Officer, the committee refers to a panel comprising about 15 companies and, with the assistance of the aforementioned consultants, verifies the positioning of remuneration of the Chief Executive Officer. For financial year 2019, his fixed annual remuneration will be as follows:

The quantitative Group criteria for 2019 are as follow:

Criteria

Weight

Threshold (0.0%)

Target (100%)

Maximum (150%)

Sales

40%

1,063.7

1,108.0

1,130.2

Current opperating income (a)

40%

175.8

187.0

194,5

Capital Employed

20%

(39.1)

(43.4)

(52.1)

(a) Excluding innovation efforts and at constant scope.

The qualitative component is based on achieving formalized individual objectives. For 2019, the qualitative objectives of Geoffrey Godet are as follows: 60%: implementation of the new "Back to Growth" strategy • with significant changes for the 4 strategic pillars; 15%: finalize the new group’s management team, with the • preparation of a succession planning; 10%: improvement in the diversity and gender equality • policy within the Group, implementation of cultural changes in line with new strategic objectives and strengthening of the digitalization of processes; 15%: Efficient and interactive collaboration with the Board • and the Chairman.

It is however precised that, notwithstanding the achievement of said objectives, no variable remuneration will be paid in cases of resignation or dismissal for gross negligence (as defined by French labor law), occurring prior to the date of payment.

4° Performance shares

The long-term component of Geoffrey Godet’s remuneration solely comprises performance share allocation plans open to a range of beneficiaries within the Group, following a decision by the Board of management ruling in accordance with recommendations from the remuneration and appointments committee. The allocations awarded to corporate officers are capped at: 10% of the total number of free shares allocated annually; • and 150% of the annual fixed remuneration in IFRS value. •

Excluding acquisition-related cost (1)

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REGISTRATION DOCUMENT 2018 / NEOPOST