SCH2017_DRF_EN_Livre.indb

3 Corporate governance report

Interests and compensation of Group Senior Management

While examining Mr. Babeau’s situation, the Board paid also specific attention to the success of the merger of the industrial software business of Schneider Electric with Aveva and its consequences. Mr. Babeau's contribution was found to be key in the conclusion of the deal and he was therefore appointed non executive Deputy Chairman of the newly combined entity . As per the Group’s internal rules, Mr. Babeau will not receive Aveva’s attendance fees that he would otherwise be entitled to. The board therefore decided that Mr. Babeau’s increased responsibilities should be compensated with a meaningful revision of his cash compensation, while remaining however within internal and external acceptance levels as well as within the range of his peers: No changes were made to the proportion in which Mr. Tricoire's annual incentive and complementary payments for pension building are set. On this basis and since 50% of Mr. Tricoire's compensation package is in the form of shares, this therefore represents an increase of approximately 2.5% of his total compensation package at target. Mindful of internal and external acceptance considerations, the board noted that: E The average compensation granted to the French employees over the past 5 years increased by 6.7%; E The Enterprise Value of Schneider Electric grew by 20% over the same period; E Mr. Tricoire’s base salary represents on average less than 75% of the base salary of his peers from the selected Company peer group and the reference indices, as shown in this graph : For 2018 Mr. Tricoire’s last increase in base salary occurred in 2013 and the board deemed appropriate, in the light of the overall steady performance of the Group over the past five years, of the successfull diversification and expansion of the Group worldwide, and of its continuously increasing competitiveness as compared to its peers, to grant to Mr. Tricoire an increase of 5% of his total cash compensation at target.

CHAIRMAN & CEO BASE SALARY COMPARED TO COMPANY PEER GROUP AND REFERENCE INDICES

74

71

68

Company peer group median

CAC 40 3 rd Quartile

Stoxx Europe 50 median

DEPUTY CEO & CFO BASE SALARY COMPARED TO COMPANY PEER GROUP AND REFERENCE INDICES

99

75

74

Company peer group median

CAC 40 3 rd Quartile

Stoxx Europe 50 median

2017 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

201