SCH2017_DRF_EN_Livre.indb

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Corporate governance report Interests and compensation of Group Senior Management

2017 Shareholder outreach Schneider Electric is committed to the interests of its shareholders and the delivery of shareholder value. As part of this commitment, it is important to maintain ongoing dialogue with shareholders to solicit and respond to feedback about executive compensation programs and decisions. Prior to the 2017 Annual Shareholders’ Meeting and in the further course of the year, the Vice-chairman independent lead director, who is also the Chair of the Governance and remunerations committee, spoke with the Group’s shareholder base at investor roadshows and during broader dialogues on matters pertaining to governance. Prior to the 2017 Shareholders Meeting, this dialog helped the Board understand shareholders’ expectations regarding the Corporate Officers’ compensation policy and clarify the governance and methodology applied by the Board when deciding on executive compensation. In the second half of 2017, these discussions were resumed in order for the Committee to anticipate shareholders’ expectations on executive compensation generally, and specifically in relation to the first shareholders’ binding vote on compensation components determined pursuant to the principles and criteria approved in 2017. Overall, during this positive feedback process, shareholders were in large part supportive of Schneider Electric executive pay programs, particularly for the Corporate Officers. Specifically, the investors viewed the following elements positively: E 3 year performance share period E Retrospective disclosure on level of performance achievement for incentive plans E Clear communication on performance shares that are vested and forfeited E Reasonable pay and performance alignment given sound plan design. At the Annual Shareholders’ Meeting of April 25, 2017: E 91.88% of the shareholder votes cast supported 2016 compensation decisions for the CEO and Chairman, E 95.51% supported the compensation decisions for the Deputy CEO, E 91.28% approved the principles and criteria governing 2017 compensation for the CEO and Chairman, and E 94.67% approved the principles and criteria governing 2017 compensation for the Deputy CEO.

2017 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

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