PERNOD-RICARD - URD 2020-21

____ 2. CORPORATE GOVERNANCE COMPENSATION POLICY

EMPLOYEE PROFIT-SHARING PLANS All employees of the Group’s French companies are eligible for profit-sharing and incentive agreements based on the results of each specific entity. In line with the Group’s decentralised structure, the terms and conditions of each of these agreements are negotiated at the level of each entity concerned. Similarly, outside France, the Group encourages all affiliates to implement local agreements enabling employees to share in the profits of the entity to which they belong. Profit-sharing agreements of this type exist in countries including Ireland and the United Kingdom: in each of these countries, employees may potentially receive Pernod Ricard shares based on their entity’s annual results. PROVISION FOR PENSION BENEFITS Details of the total amount of provisions recorded or otherwise recognised by the issuer for the payment of pensions are set out in Note 4.7 – Provisions in the Notes to the consolidated financial statements. COMPENSATION OF EXECUTIVE COMMITTEE MEMBERS The Compensation Committee members are kept regularly informed of changes in the compensation given to members of the Executive Committee. They ensure consistency between the compensation policy for Executive Directors and members of the Executive Committee and the integration of social responsibility criteria in their variable compensation. In regularly reviewing the various aspects of compensation, the members of the Compensation Committee pay particular attention to ensuring that the policy applied to the Group’s Executive Director is consistent with the policy applied to the members of the Group’s Senior Management both in France and internationally. The compensation of the members of the Executive Board (excluding the Chairman and CEO), which is set by General Management, comprises a fixed annual portion, plus a variable portion representing an attractive incentive, for which the criteria are largely based on the Group’s financial performance, as is the case for the Executive Director. Qualitative criteria to evaluate individual performance are also applied to this variable financial portion.

The Chairmen of the Group’s direct affiliates, who are members of the Executive Committee, also receive compensation comprising a fixed portion, which is set in proportion to individual responsibilities, plus a variable portion, for which the quantitative criteria depend firstly on the financial performance of the entity they manage and secondly on the Group’s results, with a view to strengthening solidarity and collegiality. The Chairmen are also evaluated using individual qualitative criteria. The same performance indicators thus apply to the key players in the Group’s business development, through the structure of and the method for evaluating the variable portion of their annual compensation. For a number of years, all members of the Executive Committee, including the Executive Director, have also been evaluated on the basis of their employee development and management performance and the implementation of Corporate Social Responsibility (CSR) projects. Total fixed compensation awarded to the members of the Executive Committee, including the Executive Director, amounted to €7.3 million for FY21 (compared to €7.7 million for FY20). In addition to this, variable compensation (relating to FY20) of €3.1 million was paid (compared with €7.1 million in FY20). This significant variation between the two financial years is due to the negative impact of the health crisis on the Group’s financial results, i.e. the quantitative portion of the variable compensation. The total recurring expense in respect of pension commitments for members of the Executive Committee, including the Executive Director, was €1.7 million in the financial statements for the year ended 30 June 2021 (compared with €4.8 million as at 30 June 2020). This significant variation between the two financial years is due to the fact that certain members of the Executive Committee received, in exchange for the elimination of the supplementary pension scheme with conditional rights decided in 2016, a cash compensation payment in respect of past service, smoothed over three years, for which the final payment was made during FY20.

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PERNOD RICARD UNIVERSAL REGISTRATION DOCUMENT 2020-2021