SAINT_GOBAIN_REGISTRATION_DOCUMENT_2017

Corporate governance Management and Directors’ compensation

Supplementary pension arrangements c) Pension commitments to Pierre-André de Chalendar in his capacity as non-employee Executive Director Pierre-André de Chalendar continues to benefit from all provisions governing the so-called “SGPM” defined benefits pension plan for engineers and executive staff, on the same basis as for all other beneficiaries of this plan. Pierre-André de Chalendar does benefit from the SGPM pension plan covering all employees who, as he did, joined Compagnie de Saint-Gobain before January 1, 1994, the date the plan was closed to new entrants. It is a so-called differential type system, according to Article 39 of the General Tax Code. As of December 31, 2017, 234 retired former employees of Compagnie de Saint-Gobain were receiving benefits under the plan and a further 25 active employees will be entitled to benefits on retirement. Commitments made to Pierre-André de Chalendar and all beneficiaries of the retirement system (current and retired employees) are partly financed, in the amount of approximately 60% of the total, through outsourcing to two insurance companies, without transfer of the lifetime income risk. To benefit from the plan, Pierre-André de Chalendar will have to retire at 60 or over on a full pension under the compulsory government-sponsored schemes after contributing to the SGPM plan for at least 15 years. If he leaves Compagnie de Saint-Gobain before fulfilling these conditions, he will not be able to claim this benefit, unless forced to terminate his activity for health reasons. Benefits under the plan are determined so that retirees receive a guaranteed total income in retirement. The guaranteed amount depends on the retiree’s years of service (up to 35 years) and is determined on a declining scale for each tranche of gross annual compensation excluding exceptional or temporary payments. Benefits received by the retiree under other basic and compulsory pension plans during the period are deducted from the guaranteed amount for the purpose of calculating the plan’s total guaranteed benefits. Pierre-André de Chalendar’s pension will be based on his final year’s fixed compensation and his years of service with the Group, calculated as from October 1, 1989, the date on which he joined the Saint-Gobain Group. If he were to leave after completing the maximum number of pensionable years of service under the SGPM plan, Pierre-André de Chalendar would be entitled to total guaranteed pension benefits (including pension benefits paid under the basic and compulsory pension schemes) representing a guaranteed replacement rate of approximately 49% of his final year’s fixed compensation. The seniority-based supplementary pension benefits under the SGPM plan that would be paid by Compagnie de Saint-Gobain, which corresponds to the difference between these guaranteed total benefits and the amount of the benefits paid under the basic and compulsory pension schemes, would therefore be approximately 37% of his latest fixed compensation set in the event of retirement at maximum seniority. Pierre-André de Chalendar’s maximum supplementary retirement payout is significantly lower than the AFEP-MEDEF code’s recommended ceiling, which is 45% of the sum of the fixed and variable compensations. The annual increase in Pierre-André de Chalendar’s potential rights is 1.5%

Performance condition Payment of the compensation for termination of office will be subject to fulfillment of a performance condition defined as an allocation by the Board of Directors of a variable part of compensation at least equal to one-half of the average maximum amount fixed for this variable part for the last three full fiscal years during which he will be Chairman and Chief Executive Officer and ending prior to the date on which he ceases his duties. This performance condition is challenging, as demonstrated by the overall completion rate of the objectives corresponding to the variable share of his compensation for the past two fiscal years, which in 2017 totaled 80%, and 82% in 2016. Payment of an indemnity for termination of office will be subject to the Board’s prior determination, in accordance with applicable laws, of fulfillment of this performance condition, on the date of his termination of office. Stock options, performance shares and performance units in the event of termination of office of the Chairman and Chief Executive Officer In the event of termination of his office as Chairman and Chief Executive Officer under circumstances qualifying him for compensation for termination of office (see the cases listed in the paragraph “Forced departure” above), and subject to fulfillment of the performance condition described in the previous paragraph, the Board reserves the right, on the proposal of the Nomination and Remuneration Committee, to decide whether or not to maintain all or some of Pierre-André de Chalendar’s rights to Saint-Gobain stock options, performance shares and performance units granted to him as of the date of termination and which have not been delivered as of this date, or for which the exercise period has not expired, as the case may be, provided at all times, the performance condition(s) set out in the plans concerned have been fulfilled. Non-compete indemnity b) Pierre-André de Chalendar has signed a firm and irrevocable non-compete agreement with Compagnie de Saint-Gobain for a period of one year from the date his functions as Chairman and Chief Executive Officer are terminated in circumstances qualifying him for compensation for termination of office. In consideration for this commitment, Pierre-André de Chalendar would receive a non-compete indemnity equal to the Reference Compensation (see Paragraph (a) above), it being specified that the amount of the compensation for termination of office due to Pierre-André de Chalendar will, if necessary, be reduced so that the sum of the compensation under the non-compete agreement and the compensation for termination of office amount to no more than twice the Reference Compensation. In accordance with the recommendations of the AFEP-MEDEF Code, the Board of Directors is entitled to unilaterally waive application of the non-compete agreement, no later than the date of termination of Pierre-André de Chalendar’s duties as Chairman and Chief Executive Officer, in which case he shall be free of any commitment and no sum shall be due to him on this account.

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