SAINT_GOBAIN_REGISTRATION_DOCUMENT_2017

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Corporate governance Management and Directors’ compensation

Principles and criteria applying to the determination, distribution and allocation of the compensation components of the Chairman and Executive Officer, for the 2018 fiscal year, submitted to the approval of the Ordinary General Shareholders’ Meeting (ArticlebL.225-37-2 of the French Commercial Code)

Compensation components attributable to the Chairman and Chief Executive Officer

Cap

Description

Long-term compensation Cap for grants of long-term compensation instruments to the Chairman and CEO, i.e. , stock options, free shares and performance units (valuation based on IFRS.standards) set at 85% of his 2018 total maximum gross compensation

The Board of Directors has decided that grants of stock options, performance shares and performance units to the Chairman and Chief Executive Officer in 2018, could not, at the time of their grant, represent a value (in accordance with the IFRS standards) greater than 85% of his total maximum gross compensation for the 2018 fiscal year (fixed compensation plus maximum variable compensation for the 2018 fiscal year). The grants of stock options, performance shares and performance units to the Chairman and Chief Executive Officer for the 2017 and 2016 fiscal years represented a value of less than 70% and 50% respectively of his total maximum gross compensation for such fiscal years. In addition, the Board of Directors has decided that the Chairman and Chief Executive Officer may not receive more than 10% of the overall grants of performance shares and performance units allocated under the long-term compensation plans 2018. For the record, the sub-limit for the grant of stock options to the executive Directors was set by the General Shareholders’ Meeting of Juneɸ2, 2016 at 10% of the limit determined by the 13thɸresolution (such limit being also applicable to the 14thɸresolution of the same General Shareholders’ Meeting relative to the grant of free shares which fixed a sub-limit at 10% of the limit set by the resolution for the allocation to the Executive Directors). At the occasion of the General Shareholders’ Meeting of Juneɸ2, 2016, the Board of Directors indicated its intention to subject the exercise of the stock options and the vesting of the performance shares under long-term compensation plans to a service condition and performance conditions which will be based as a minimum on an internal performance criterion (Group ROCE) and on a relative performance criterion (the stock market performance of Saint-Gobain vis-à-vis the CACb40 stock market index), taken individually or combined, and that it reserves the right to add the criterion of free cash flow , a published market indicator (for more information see pagesɸ31 and 32 of the Notice of Meeting for the General Shareholders’ Meeting of Juneɸ2, 2016). Furthermore, following dialogue with investors and as announced in 2016, the Board of Directors decided on November 23, 2017, at the proposal of the Nomination and Remuneration Committee, to add a criterion related to corporate social responsibility, comprising the following three indicators, all quantifiable and published each year as key CSR indicators: total recordable accident rate – more than 24 hours’ lost time and non lost time (TRAR), the reduction rate of CO 2 emissions and the senior executives diversity index. These criteria have been considered relevant by the Board of Directors as they reflect the operational, financial and non-financial performance of the Saint-Gobain Group and ensure an alignment of the beneficiaries with the interest of Saint-Gobain shareholders. The duration of vesting periods applicable under long-term compensation plans shall not be shorter than three years. In the event that the Board of Directors should decide in 2018 to implement in favor of certain beneficiaries a plan of performance units instead of the grant of performance shares, as in the past, the grants of performance units will be subject to the same service and performance conditions as the grants under performance share plans which would be implemented in 2018 in favor of other beneficiaries of long-term compensation plans. As in the past, the Board will set for the Chairman and Chief Executive Officer, for any allocation in 2018 under long-term compensation plans, a demanding obligation to retain shares resulting from the exercise of stock options or vested performance shares or to reinvest in shares upon exercise of performance units, that the Chairman and Chief Executive Officer will be required to retain in registered form until the cessation of his duties.

and

Cap for allocation to the Chairman and CEO fixed at 10% of the overall grants performance shares and performance units in 2018

and

Caps for allocation to the Chairman and CEO provided by resolutions 13 (stock options) andb14 (free shares) of the General Shareholders’ Meeting of Juneb2, 2016

162 SAINT-GOBAIN - REGISTRATION DOCUMENT 2017