NEOPOST_REGISTRATION_DOCUMENT_2017

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Corporate governance report

Remuneration of managers and directors

The Chairman & Chief Executive Officer - 2017 Remuneration

The total remuneration and benefits in kind paid by Neopost S.A. and the companies it controls to Denis Thiery, Chairman and CEO, during fiscal 2017, were awarded on the basis of the resolution voted by the General Meeting on 30 June 2017, which approved the principles and criteria for calculating and determining the various elements of this remuneration. The gross remuneration of Neopost S.A.'s Chairman and Chief Executive Officer consists of fixed and variable remuneration, in euros and in US dollars, which is set each year by the Board of directors on the basis of the remuneration committee's proposals. As far as the variable compensation is concerned, 80% of the variable component paid in 2017 was determined on the basis of certain quantitative objectives relating to the Group’s profit and loss (sales, operating profit and capital employed) and 20% on the basis of pre-established and carefully defined qualitative objectives, namely developing the management team, finalizing the structure and development of Neopost Shipping, continuing the development of the Enterprise Digital Solutions division, accelerating the development of new activities linked to digital

communication and Shipping in the SME Solutions division and continuing the executive committee succession plan. Each of these criteria is given a weighting of 20%. In addition, the upper and lower limits of this variable component are expressed as a percentage of the fixed remuneration awarded, 100% of objectives achieved and with a pre-determined ceiling of 150%. The principle of allocating deferred or a long-term variable remuneration, or exceptional remuneration, does not apply to the Chairman & CEO. There are no plans to award any compensation or benefits to the Chairman & CEO in the event of termination or a change in role, or for non-competition obligations. The Chairman & CEO is paid 30,000 euros in directors' fees per year. 40,000 performance shares were awarded during the fiscal year and he continues to benefit from a supplementary pension scheme.

The total remuneration and benefits in kind paid and due by Neopost S.A. and the companies that it controls during fiscal 2017 ended on 1 January 2018, to Denis Thiery, Chairman & CEO, is broken down as follows:

Overview of the components of the remuneration of the Chairman & CEO 

Paid or due as of 31 January 2018

(ln thousands of euros) Fixed remuneration (a)

663.0

Annual variable remuneration (b)

paid: 562.1 due: 663.0

Multi-annual variable remuneration

None

Director's fees

30.0

Benefits in kind (company car, social security for business directors)

23.1

Exceptional remuneration

None

Compensation linked to taking up roles or termination

None

Valuation of performance shares awarded during the financial year 517.7 The fixed remuneration is divided in two parts : 530,400 euros paid in France and 172,380 United States dollars paid in the United States. The (a) amount in United States dollars has been frozen considering that it does not have to change with the evolution of EUR/USD exchange rate. It has been frozen to 20% of the fixed remuneration in euros translated with the exchange rate at the time ie 1.30. The annual variable remuneration “due” corresponds to the bonus provisioned in Neopost S.A. and Mailroom Holding Inc. financial statement (b) at the end of the financial year while tha annual variable remuneration "paid " correponds to the bonus paid relative to the previous year.

The Group quantitative criteria for variable remuneration for 2017 were as follows:

Weight

Criteria

Threshold (0.0%)

Target (100%)

Maximum (150%)

40%

Sales

1,087.0

1,144.2

1,178.5

40%

EBIT

17.1%

18.4%

19.2%

20%

Capital employed

(37.0)

(41.2)

(45.3)

The quantitative criterias were adjusted to take into account the 2017 scope effects (divestment of DMTI Spatial).

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REGISTRATION DOCUMENT 2017 / NEOPOST