PERNOD-RICARD_REGISTRATION_DOCUMENT_2017-2018

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

Components of compensation

Amounts

Remarks

Fixed compensation €950,000

At its meeting held on 30 August 2017, the Board of Directors, on the recommendation of the ● Compensation Committee, decided to maintain the amount of Mr Alexandre Ricard’s gross fixed annual compensation at €950,000 for FY18. At its meeting held on 28 August 2018, the Board of Directors, on the recommendation of the ● Compensation Committee and after approval of the financial elements by the Audit Committee, assessed the amount of the variable portion of Mr Alexandre Ricard’s compensation for FY18. Considering the quantitative and qualitative criteria set by the Board meeting on 30 August 2017 ● and the achievements recognised as of 30 June 2018, the amount of the variable portion was assessed as follows: for the quantitative criteria, the variable portion amounted to 131.49% of Mr Alexandre Ricard’s ● fixed annual compensation, versus a target of 80% and a maximum of 150%, breaking down as follows: achievement of the budgeted Profit from Recurring Operations (target 30%, maximum — 55%): 40.92%; achievement of the budgeted Net Profit from Continuing Operations attributable to equity — holders of the Parent (target 20%, maximum 40%): 35.57%; deleveraging (Net debt/EBITDA) (target 30%, maximum 55%): 55%; — for the qualitative criteria, the variable portion approved amounted to 30% of Mr Alexandre ● Ricard’s annual fixed compensation, versus a target of 30% and a maximum of 45%, breaking down as follows: grow in value at the same pace as the US market (6%/9%): 6%; — return to growth of Chivas (6%/9%): 6%, — implementation of the operational efficiency plan (6%/9%): 6%; — strengthen the culture of commitment and performance within the Group (6%/9%): 6%; — honour the five CSR commitments made by the industry for December 2017 (Smart — Barometer reading of 95% at the end of December 2017) (6%/9%): 6%; Consequently, the total amount of Mr Alexandre Ricard’s variable compensation for FY18 as ● Chairman & CEO was set at €1,534,155, i.e. 161.49% of his fixed annual compensation for FY18 (vs. a target of 110%). The variable compensation in respect of the FY17 and FY16 respectively represented 130.85% and 96.20% of his annual fixed compensation. Mr Alexandre Ricard does not qualify for any multi-year variable cash compensation. ● During FY18, the Board of Directors’ meeting held on 9 November 2017 decided, on the ● recommendation of the Compensation Committee, to grant Mr Alexandre Ricard: 25,050 stock options ( i.e. approx. 0.009% of the Company’s share capital) all subject to the ● external performance condition specified in the subsection "Allocation of stock options" in section 2.1.8.4 above; 4,000 performance-based shares ( i.e. approx. 0.0015% of the Company’s share capital) all ● subject to the internal performance condition specified in the subsection "Allocation of performance-based shares" in section 2.1.8.4 above; 6,600 performance-based shares (representing approximately 0.0025% of the Company’s ● share capital), fully subject to the internal and external performance conditions specified above in the subsections "Allocation of stock options" and "Allocation of performance-based shares" in section 2.1.8.4 above; the same presence condition applies to Mr Alexandre Ricard and the other beneficiaries of the ● allocation plan. it is noted that Executive Directors are subject to lock-in obligations in respect of shares resulting ● from the exercise of stock options and the effective transfer of performance-based shares (see subsection “Stock option and performance-based share allocation policy” in section 2.1.8.4 above). As an Executive Director of the Company, Mr Alexandre Ricard does not receive any Directors’ fees. ● Mr Alexandre Ricard does not qualify for any special bonus. ●

Variable compensation €1,534,155

Multi-year variable compensation

N/A

Directors’ fees Special bonus

N/A N/A

Allocation of stock options and/or performance-based shares

€473,195 (total IFRS value of stock options with external performance condition) €476,600 (total IFRS value of performance-based shares with internal performance condition) €475,134 (total IFRS value of performance-based shares with internal

and external performance conditions)

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PERNOD RICARD REGISTRATION DOCUMENT 2017/2018