PERNOD RICARD - Universal Registration Document 2019-2020

3. SUSTAINABILITY & RESPONSIBILITY The four pillars of the good times from a good place roadmap

Welfare, social protection and labour relations POLICIES AND OBJECTIVES Compensation policy The compensation policy reflects the decentralised business model, except for Group Senior Management, whose compensation is overseen by Headquarters. Each affiliate manages its policy locally while upholding a set of common rules. These include developing a performance culture and offering compensation that is competitive locally. This also involves setting up straightforward, meaningful and motivating compensation packages. Total payroll is included in Note 3.5 – Expenses by type to Section 6 “Consolidated financial statements”. This year, payroll represented 14.4% of net sales. Signature of labour agreements Each year, the affiliates sign roughly 100 agreements with the various social partners worldwide, thereby encouraging improved social dialogue. The number of agreements signed depends on changes to local legislation. The agreements signed by affiliates during the past year mainly covered compensation and profit-sharing, group welfare schemes and occupational health and safety. Performance culture: profit-sharing and incentive policies Performance is encouraged through favourable profit-sharing and incentive policies. The total gross amount paid under profit-sharing and incentive plans to over 5,807 employees amounted to nearly €42 million. This was matched by contributions (additional sum paid to employees for investments in the Company savings plan) amounting to over €5 million. Moreover, long-term profit-sharing policies (such as allocating performance-based shares) have once again been implemented in FY20 for over 800 employees worldwide. In 2019, the Group launched Accelerate , its very first Employee Share Ownership Plan. This first version of the Plan has been rolled out in 18 countries, covering 75% of Group employees. The clear goal is to give employees a share in the Group’s future development and growth. The initiative proved highly successful, with an overall subscription rate of 41.5%. Such a level is rarely achieved when structured offerings are launched. The subscription rate exceeded 60% in a number of countries, such as India (76.4%) and Hong Kong (60.4%). In France, the subscription rate was 56.9%.

ACTION PLANS AND NEXT STEPS Welfare protection and health insurance

In accordance with the Group’s commitment, all employees are offered a welfare protection plan covering major risks (death and invalidity). Some chose not to be covered or are covered by their spouse’s employer. Social dialogue The Group has a long tradition of social dialogue and promotes freedom of association in all the countries in which it operates. In addition, it firmly believes in the importance of providing a working environment with optimal working conditions. European Works Council : with over 50% of its staff based in — Europe, the Group has mainly focused its efforts on European employee representatives, through the European Works Council. This council brings together one or more representatives from every affiliate within the EU with over 50 people. It had a total of 24 representatives in FY20. The European Works Council meets at least once a year. A Select Committee, elected by their peers, comprising five members from five different countries, meets at least once a year too. The Select Committee may act on its own initiative in response to any social measure that might be taken in Europe involving at least two countries in which Pernod Ricard has local teams. To share information, an Intranet site publishes content each year co-written by delegates and the HR Department. The France Group Committee meets once a year. It brings together employee representatives appointed by the largest trade unions in the French affiliates. At these meetings, the Group’s business activities are reviewed, together with an analysis of employment trends and forecast changes during the year ahead. The Group Committee and the European Works Council are chaired by the Group Chairman & CEO, Alexandre Ricard, and moderated by the HR Department; The Global Deal : Pernod Ricard has officially signed up to the — Global Deal, a multi-stakeholder partnership intended to address challenges in the global labour market and enable everyone to benefit from globalisation. It aims to encourage governments, businesses, unions and other organisations to make commitments to enhance social dialogue and promote joint solutions. The deal entails exchanges of ideas, joint projects, lessons learned and policy advice. It will also promote concrete initiatives and voluntary commitments. Pernod Ricard affiliates in partner countries will have access to their own local platforms.

FY19

FY20

Number and %

Employees covered by a welfare protection plan (death and invalidity) with a benefit equivalent to at least one year of the employee’s fixed annual salary  (1)

92.4%

94.2%

Employees benefitting from health insurance  (1) (2)

99.7%

97.6%

Total gross amount paid under profit-sharing and incentive plans

€40 million

€42 million

Number of agreements signed with social partners

125

174

Number of affiliates that signed at least one company-wide agreement during the year

30

27

Fixed term and permanent contracts. (1) Health insurance is defined as the regime that is compulsory at local level, whether or not supplemented by a company plan. (2)

98

Pernod Ricard Universal Registration Document 2019-2020