PERNOD-RICARD_REGISTRATION_DOCUMENT_2017-2018

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

Collective healthcare and welfare schemes Mr César Giron qualifies for the collective healthcare and welfare schemes offered by Martell Mumm Perrier-Jouët under the same terms as those applicable for the category of employees to which he belongs for the determination of his employee benefits and other additional components of his compensation. Other benefits During FY18, Mr César Giron qualified for a company car and a part-time chauffeur. Mr Paul-Charles RICARD, Permanent 2.1.8.3 Fixed compensation Mr Paul-Charles Ricard receives gross fixed compensation for his duties as Innovation Manager of Martell Mumm Perrier-Jouët which reached €57,756 for FY18. Variable compensation This variable portion is expressed as a percentage of the annual fixed portion. It may reach 12% of his gross fixed compensation if the (individual) qualitative targets are achieved. In this respect, during FY18, he received gross variable compensation of €6,847 relating to FY17. Amounts received in respect of employee incentive agreement and profit-sharing plans Under the employee profit-sharing plans in effect within Martell Mumm Perrier-Jouët, Mr Paul-Charles Ricard received €8,037 from incentive agreements and €8,497 from profit-sharing. Collective healthcare and welfare schemes Mr Paul-Charles Ricard qualifies for the collective healthcare and welfare schemes offered by Martell Mumm Perrier-Jouët under the same terms as those applicable for the category of employees to which he belongs for the determination of his employee benefits and other additional components of his compensation. Other components of the compensation No special bonus/No allocation of stock options and/or performance-based shares/No compensation for termination of service/No supplementary pension scheme/No benefits in kind. Compensation policy for the Executive 2.1.8.4 Director Presented below, in accordance with article L. 225-37-2, is the report of the Board of Directors on the compensation policy for the Chairman & CEO (hereinafter the “Executive Director”), which will be submitted for the approval of shareholders. Accordingly, the Shareholders’ Meeting of 21 November 2018 (in its 10 th resolution appearing in Section 7 “Combined Shareholders’ Meeting” of this Registration Document) will be asked to approve the following aspects of the compensation policy of the Executive Director. It is specified that this report has been drawn up under the supervision of the Compensation Committee. Representative of Société Paul Ricard, member of the Board of Directors and Innovation Manager at Martell Mumm Perrier-Jouët

Principles and rules for determining the policy The compensation policy for the Executive Director is set by the Board of Directors based on the recommendation of the Compensation Committee and the following principles for determination: Compliance In its analysis and proposals to the Board of Directors, the Compensation Committee is particularly careful to follow the recommendations of the AFEP-MEDEF Code, which the Company uses as reference. Overview and balance All components of the compensation and other benefits are analysed exhaustively each year using an element-by-element approach and then an analysis of overall consistency to achieve the best balance between fixed and variable, individual and collective and short- and long-term compensation. Simplicity and consistency Based on the recommendations of the Compensation Committee, the Board of Directors seeks to implement a compensation policy for the Executive Director that is straightforward, easy to understand and consistent with that of the Group’s senior executives. Motivation and performance In its recommendations to the Board of Directors, the Compensation Committee seeks to propose a compensation policy commensurate with the responsibilities of each recipient and in line with the practices of comparable large international corporations, and seeks to maintain a good balance between fixed compensation, variable annual compensation and long-term remuneration. Lastly, the variable compensation policy (in particular setting the criteria for the annual variable portion as well as the performance conditions for stock options and performance-based shares) is kept under regular review, based on the Group’s strategic priorities and in alignment with shareholders’ interests. Role of the Compensation Committee The Compensation Committee oversees the strict application of all these principles in the context of its work and its recommendations to the Board of Directors, both for drawing up the compensation policy for the Executive Director and for determining the amounts of compensation allocated. Potential change of governance Where a new Chairman & CEO, a new Chief Executive Officer or Deputy Chief Executive Officer(s) are appointed, the components of the compensation and the policy and criteria set out in the Compensation Policy for the Chairman & CEO shall also apply to them. The Board of Directors, on the recommendation of Compensation Committee, shall then, by means of adaptation to the situations of the interested parties, determine the objectives, performance levels, parameters, structure and maximum percentages compared to their annual fixed compensation, which may not be higher than those of the Chairman & CEO. Fixed annual compensation The fixed portion of the compensation of the Executive Director is determined based on: the level and complexity of their responsibilities; ● their experience and their career history, particularly within the ● Group; and market analyses for comparable functions. ● Every year, a study is carried out with the help of specialist firms on the positioning of compensation for the Executive Director in relation to the practices of international companies in the beverage sector and also of CAC 40-listed companies for similar positions.

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PERNOD RICARD REGISTRATION DOCUMENT 2017/2018