SAINT_GOBAIN_REGISTRATION_DOCUMENT_2017

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Corporate governance Management and Directors’ compensation

Compensation of members of the Group’s Senior 2.3 Management

Compensation paid to members of the Group’s senior management (see Chapter 1, Section 3) is set at a level consistent with compensation packages offered by comparable companies. It is determined and reviewed, among other things, based on the results of specific surveys from specialized consultants commissioned by senior management. In addition to a fixed portion, it consists of a variable compensation set at a reasonable proportion of total compensation, the purpose of which is to reflect the manager’s personal contribution to the Group’s growth and results. This principle has now been extended to all managerial staff. The performance objectives used are based on financial indicators such as Return On Investment (ROI) and Return On Capital Employed (ROCE), as well as personal objectives such as developing a certain type of business or entering a new geographic market. Most often, a safety indicator is also applied. In this way, management compensation is clearly linked to performance and to the achievement of objectives that Allocation policy 2.4.1 The objective of the Group’s long-term compensation policy is to retain and motivate the Group’s senior management, officers and employees, and to associate them with the Group’s performance, in particular through conditional allocations of stock options, performance shares or performance units to reflect their fulfillment of the Group’s long-term strategy. At the recommendation of the Nomination and Remuneration Committee, the Board of Directors authorizes the features of the stock option and performance share plans, as well as the identity of the beneficiaries, and approves the principle of long-term compensation plans in the form of performance units to be implemented, if need be, by the Chairman and Chief Executive Officer. These plans are subject to a service condition and to the strict internal and/or relative performance criteria set by the Board (see below for details of each allocation). In 2017, these plans covered 2,105 Group officers and employees, in France and outside France, including high-potential managers and managers who have performed exceptionally well (260 grantees), key corporate and line

promotes a high level of personal commitment. Each manager’s compensation can fluctuate significantly from one year to the next, based on the results achieved. Gross compensation received by the members of senior Management Committee (excluding the Chairman and Chief Executive Officer and long-term compensation) in 2017 from Group companies in and outside France, totaled €11.9 million (2016: €10.9 million), including gross variable compensation of €4.2 million (2016: €3.2 million) and termination benefits of €0.1 million (2016: no termination benefits). Pensions and other post-employment benefits (defined benefit obligations in respect of retirement bonuses and pensions) accruing to the members of the Senior Management Committee (including the Chairman and Chief Executive Officer) totaled €46.6 million at December 31, 2017 (€47.0 million at December 31, 2016). Attendance fees allocated to Directors representing the Group (particularly members of Group management) in Group companies other than Compagnie de Saint-Gobain are either reverted to their employer company, or paid directly to that company. executives in the Sectors and General Delegations (1,803 grantees), members of the Group Liaison Committee excluding the senior management team (31 grantees) and senior management (10 grantees), with grants to the Chairman and Chief Executive Officer being described in Chapter 6, Section 2.2.3(c). The beneficiaries of these plans belong to 58 different nationalities and work in 55 countries. On November 23, 2017 the Board of Directors resolved that the origin of the shares of the 2017 stock options plan, new or existing shares, would be determined at its discretion no later than by the end of the vesting period. This plan represents 0.05% of the share capital and therefore has no material impact in terms of dilution. The performance share plan entitles beneficiaries to existing shares and therefore has no impact in terms of dilution. No performance unit plan was implemented during fiscal year 2017. The members of the Liaison Committee were allocated both stock options and performance shares. The other instruments designed to associate employees with business results are presented in Chapter 8, Section 2.3 and Chapter 4, Section 3.2.3.

Long-term compensation plans (stock options, 2.4 performance shares and performance units)

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