SAINT_GOBAIN_REGISTRATION_DOCUMENT_2017

Corporate governance Management and Directors’ compensation

Stock option plans 2.4.2 Stock option plans have been set up by the Board of Directors every year since 1987. Under the authorization granted by the 13 th resolution of the General Shareholders' Meeting of June 2, 2016, at its meeting of November 23, 2017 the Board of Directors resolved to implement a stock option plan, following analysis and the recommendation of the Nomination and Remuneration Committee. This plan covers 42 employees and officers of the Group, in France and outside France, who were granted a total of 284,500 options (including allocations to the Chairman and Chief Executive Officer), with the type of options, whether for new or existing shares, to be determined by the Board no later than by the end of the vesting period (noting that any options that may be exercised before their type is determined will be options to subscribe for new shares). Grants to the Chairman and Chief Executive Officer are less than the grant sub-cap defined by the General Shareholders' Meeting on June 2, 2016. The lifetime of the options is 10 years. The option price was set at €49.38, without rebate or discount based on the average opening price of the Saint-Gobain shares in the 20 trading days preceding the date of the grant by the Board of Directors. The performance criteria applicable to the stock options plan implemented on November 23, 2017 entail, as since 2015, an internal performance condition linked to Saint-Gobain Group’s Return on Capital Employed, including goodwill, and a relative performance condition linked to the performance of the Saint-Gobain stock price compared to the performance of the CAC 40 stock market index. Furthermore, following dialogue with investors and as announced in 2016, the Board of Directors decided, at its meeting of November 23, 2017, at the proposal of the Nomination and Remuneration Committee, to add a criterion related to corporate social responsibility. 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. In the past, the performance conditions for stock option plans on the one hand, and performance shares and units on the

other, were identical in nature but inversely weighted. At its meeting of November 23, 2017, the Board of Directors decided, at the proposal of the Nomination and Remuneration Committee, to apply the same exact conditions, weighted and calculated in the same way, to all 2017 long-term compensation plans (stock options and performance shares), with the aim of putting an end to the dual exposure to the stock market price of beneficiaries of stock options (via the overweighting of the stock market criterion provided in the plans implemented up to that date and the value of the – non-discounted - strike price for stock options). Exercise of the stock options is subject to fulfillment of the following cumulative conditions: service condition: to be an employee or a Director of a „ Saint-Gobain Group company throughout the period up to the exercise date of the stock options, without interruption, except in a number of defined specific cases such as death, disability (as defined in paragraphs (2) and (3) of Article L.341-4 of the French Social Security Code), no-fault termination, negotiated departure, retirement, transfer to another position within the Group, or change of control of the grantee’s host company to outside the Group; performance condition linked to the following three „ criteria: 65% of the options initially allocated are subject to the „ criteria of Return On Capital Employed, including goodwill, of the Saint-Gobain Group (“ROCE”); 20% of the options initially allocated are subject to a „ criterion linked to the performance of the Saint-Gobain stock price versus the performance of the CAC 40 stock market index; and 15% of the options initially allocated are subject to a „ criterion linked to corporate social responsibility. This criterion comprises the following three indicators, all quantifiable and published each year as key CSR indicators, each applying to 5% of the options initially allocated: the total recordable accident rate – more than 24 hours’ lost and non lost time (TRAR), the reduction rate of CO 2 emissions and the senior executives diversity index.

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