SCH2017_DRF_EN_Livre.indb

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Corporate governance report Interests and compensation of Group Senior Management

Variable portion

Total at Target (€)

Officer

Fixed portion

Target

Award target

Min (€)

Max (€)

Jean-Pascal Tricoire Emmanuel Babeau

€182,000 €136,400

130% €236,600 100% €136,400

€0 €0

€473,200 €272,800

€418,600 €272,800

Other benefits of any type Employer Matching Contributions and Profit-Sharing In financial year 2017, both Corporate Officers were eligible for profit- sharing and the employer matching contribution paid to subscribers to the capital increase reserved for employees. In addition, both Corporate Officers were eligible for the employer matching contribution paid to subscribers to the collective pension fund (PERCO) for the retirement of workers in France. Company Car and Travel Expenses Travel and business expenses for Messrs. Tricoire and Babeau are covered by the Group. The Corporate Officers may use the cars made available to Group Senior Management with or without chauffeur services. In addition, each has been provided with a company car. Health, Life & Disability schemes Messrs. Tricoire and Babeau are granted benefits under the Schneider Electric SE and Schneider Electric Industries SAS employee benefit plan, which offers health, incapacity, disability and death coverage, plus additional coverage for health, incapacity, disability or death available to Group Senior Management under French contract as well as Group personal accident insurance policies in case of disability or death resulting from an accident. They are also entitled to an annuity for the surviving spouse in the event of death or an annuity with reversion to the surviving spouse in the event of disability, provided that these risks occur before the end of their term of office or after the age of 55 in the event of departure from the company following redundancy or a disability. The benefit of this supplementary coverage and contingency compensation under individual Group accident insurance policies is subject to the achievement of either of the following performance conditions: the average net income from the 5 financial years leading up to the event is positive or the average free cash flow from the 5 financial years leading up to the event is positive. Termination and change of assignment agreements The provisions of the regulated agreements and commitments applicable in case of termination of change of assignment of the Corporate Officers have not been enforced in 2017 and are therefore not detailed herein. Neither is eligible to be reimbursed for other costs. 7.2.2 Other benefits forming part of the status of the corporate officers (regulated agreements and commitments)

The principles and criteria described in this section were approved by Schneider Electric shareholders at the Annual Shareholders’ Meeting on April 25, 2017.

Following Mr. Tricoire’s renewal as a director at the Annual Shareholders’ Meeting of April 25, 2017, the board has reiterated and reviewed the status of the Corporate Officers and to this end, approved new Regulated Agreements and Commitments, the terms of which are detailed pages 205 to 207 and in the Statutory Auditors’ report on Regulated Agreements and Commitments pages 365 to 368, submitted to the shareholders for approval under the 4 th and 5 th resolutions. 7.2.3 Compensation granted for financial year 2017 Financial year 2017 business performance Schneider Electric is leading the Digital Transformation of Energy Management and Automation in Homes Buildings, Data Centers, Infrastructure and Industries. Pay-for-performance is one of three pillars in Schneider Electric’s executive compensation philosophy. Therefore, one must consider business performance in order to fully understand the executive compensation decisions made in financial year 2017. Jean-Pascal Tricoire, Chairman and CEO, commented on the good performance of the Group: “In 2017, we drove our revenues up +3.2% organic for the full year, and accelerated in Q4 at +4.6%. The continued execution of our strategy delivers a strong +90 bps organic adjusted EBITA margin improvement, confirming the continuous and structural improvement of our operating margin over the past 10 quarters. 2017 is the year of a combined highest ever adjusted EBITA, Net Income and Free Cash Flow. We also improved our ROCE to 12%, by more than 1.3 pt. ”

2017 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

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