PERNOD-RICARD_REGISTRATION_DOCUMENT_2017-2018

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CORPORATE GOVERNANCE AND INTERNAL CONTROL REPORT OF THE BOARD OF DIRECTORS ON CORPORATE GOVERNANCE

Strategic Committee 2.1.7.5

Composition

On 28 August 2018, the Strategic Committee comprises: Chairman: Mr Alexandre Ricard (Chairman & CEO) Members: Mr Wolfgang Colberg (Independent Director) Mr Ian Gallienne (Independent Director) Mr César Giron (Director) Ms Anne Lange (Independent Director) Mr Pierre Pringuet (Director)

Three out of the six Directors who are members of the Strategic Committee are Independent Directors (50%), it being noted that the AFEP-MEDEF Code does not make any recommendations regarding the Strategic Committee’s independence. In FY18, the Strategic Committee met twice with an attendance rate of 91.7%. All the Directors may, upon request, and even if they are not members of the Committee, participate in the meetings of the Strategic Committee. The roles of the Strategic Committee, as confirmed by the Board on 11 February 2015, are the following: reviewing the key strategic issues of the Pernod Ricard company or of the Group; ● drawing up and giving its prior opinion on significant partnership transactions, sales or acquisitions; ● generally, dealing with any strategic issues affecting the Company or the Group. ● During FY18, the members of the Strategic Committee reviewed the strategic issues of the Group and the Group’s cybersecurity roadmap. They also debated the development of the Group's financial policy in the context of further deleveraging. In FY19, the Committee will continue with the tasks it is carrying out for the Board of Directors, and notably the review and analysis of the key strategic orientations foreseen for the Group’s development as well as the study of any strategic issues affecting the Company or the Group.

Main roles

Main activities in FY18

Outlook for FY19

Compensation policy 2.1.8

Directors who take part in Board meetings by videoconference or conference call are not eligible for this additional amount. The Director representing the employees receives an annual lump sum of €15,000 as Directors’ fees for his or her attendance at the meetings of the Board of Directors and, as applicable, those of the Board of

Executive Directors' compensation 2.1.8.1 This section was prepared with the assistance of the Compensation Committee. Compensation policy for members of the Board of Directors The conditions governing Directors’ compensation are determined by the Board of Directors on the basis of a recommendation from the Compensation Committee and must fall within the bounds of the total amount allocated by the Shareholders’ Meeting for Directors’ fees. Arrangements for allocating Directors’ fees for FY18 Directors’ annual compensation comprises a fixed portion set at €11,500 with an additional €5,500 for members of the Audit Committee and €3,000 for members of the Strategic Committee, the Compensation Committee, and the Nominations, Governance and CSR Committee. The Chairman of the Audit Committee receives an additional sum of €6,000 while the Chairmen of the Compensation Committee and the Nominations, Governance and CSR Committee each receive an additional €3,000. The Vice-Chairman of the Board of Directors receives an additional Directors’ fee of €40,000 each year. Directors are also eligible for a variable portion, calculated on the basis of their attendance at Board and Committee meetings. The variable portion is €4,000 per meeting. Furthermore, in order to take account of distance constraints, an additional premium of €1,500 is paid to Directors who are not French tax residents when they attend Board and/or Committee meetings.

Directors Committee(s) of which he or she is a member. The Chairman & CEO does not receive Directors’ fees.

Of the €970,000 allocated by the Shareholders’ Meeting of 9 November 2017, a total of €887,500 in Directors’ fees was paid to members of the Board of Directors in respect of FY18, in accordance with the rules set out above. Arrangements for allocating Directors’ fees for FY19 After 10 years without change, a Mercer study on total Directors’ fees and their allocation within the Company found that: the Company's Board of Directors uses 93% of the annual amount ● (compared with an average of 70% among CAC 40 companies), leaving no flexibility in the organisation of Board of Directors and/or Committee meetings; and the amount of fixed Directors’ fees received by each member of the ● Board of Directors and the Committees is below the market practices observed among CAC 40 issuers. To give the Board the flexibility needed to hold additional meetings of the Board of Directors and/or the Committees, to anticipate the appointment of any additional Directors, to maintain the attractiveness of the Board of Directors and to align the Company’s practices with those of other CAC 40 companies, the Board of Directors, at its meeting of 24 July 2018 and on the proposal of the Compensation Committee, decided to modify the allocation of Directors’ fees as follows, it being specified that:

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PERNOD RICARD REGISTRATION DOCUMENT 2017/2018