SCH2017_DRF_EN_Livre.indb

3 Corporate governance report

Interests and compensation of Group Senior Management

Comments:

The following table explains item wise the compensation granted to the Corporate Officers in financial year 2017:

Base Salary

The base salaries granted to the Corporate Officers are as approved by the shareholders at the 2017 Shareholders’ Meeting.

FY 2016 (as of 1/1/16)

FY 2017 (as of 1/1/17)

% Change

Officer

Jean-Pascal Tricoire Emmanuel Babeau

€950,000 €605,000

€950,000 €605,000

0% 0%

Annual Incentive

The annual incentive program relies on a variety of metrics, mostly economic and measurable, that reflect a balanced set of priorities for the financial year followed by the Corporate Officers. No adjustments were made to performance targets for annual incentive purposes following their original communication to the market. In other words, consistent with governance best practice as well as Schneider Electric’s compensation policy for 2017, the 2017 annual incentive targets were not adjusted following the revised financial guidance in July and October. The measurable financial objectives for 2017 represented 75% of the variable compensation in cash of Messrs. Tricoire and Babeau. In total, 2017 performance resulted in an overall achievement rate of 152.40%, which represents 198.12% of Mr. Tricoire’s base salary and 152.40% of Mr. Babeau’s base salary with individual performance considered. These above target numbers reflect the strong results delivered by Schneider Electric in 2017.

Target (as a % of Base Salary)

Actual Performance (as a % of target)

2017 Actual Payout (as a % of base salary)

2017 Actual Payout Amount (€)

Award Target (€)

Officer

Jean-Pascal Tricoire Emmanuel Babeau

130% €1,235,000 100% €605,000

152.40% 152.40%

198.12% €1,882,140 152.40% €922,020

2017 Performance Target

2017 Achievement (base 100)

Metric

Weight

Threshold Target Maximum

Group Sales Growth (org.) Group Adj. EBITA % (org.) Group Cash Conversion Rate Field Services Sales Growth

30% -1% 1% 3%

200% 200% 200%

20% -0.1 pt

+0.3 pt

+0.7 pt

10% 85% 95% 105%

5% 5% 5%

0% 0% 8%

System Gross Margin

Digital Index

Planet & Society Barometer

5% 8.5

9.0

9.5

200%

Mr. Tricoire: 110% Mr. Babeau: 110%

Individual Objectives

20%

TOTAL WEIGHTED 152.40% In compliance with article L.225-100 of the French Commercial Code, the payment of this annual incentive is subject to approval by the shareholders of the compensation granted to the Corporate Officers for the financial year 2017 ( cf. 7 th and 8 th resolutions submitted to the Shareholders' Meeting of April 24, 2018). Comments: The overall level of achievement for 2017 on the criteria set by the board reached an average of 152.4%, illustrating the strong financial performance of the Group during the year. It can be analyzed as follows: The financial parameters globally delivered very strong pay-out as the Group delivered an excellent financial performance in all dimensions, exceeding initial objectives set at the beginning of the year. 100%

2017 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

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