SCH2017_DRF_EN_Livre.indb

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Corporate governance report Interests and compensation of Group Senior Management

Compensation of Group Senior Management excluding Corporate Officers

7.5

Scope of Senior Management in 2017 On December 31, 2017, Senior Management includes the Chairman and CEO and Deputy CEO, assisted by Executive Committee members. The Executive Committee (14 members) is chaired by the Chairman and CEO. It includes, in addition to the Chairman and CEO and Deputy CEO in charge of Finance and Legal Affairs: E Executive Vice-Presidents of Corporate Functions: Global Supply Chain – Digital – Strategy – Marketing – Global Human Resources E Executive Vice-Presidents of Operations: North America Operations – China Operations – France Operations – Europe Operations – International Operations E Executive Vice-Presidents of Activities: Building & IT – Industry – Energy. Two Executive Committee members left the Group in 2017. For the presentation of the compensation in this section, the Group Senior Management excludes the Corporate Officers, who were presented separately in section 7.2 above in accordance with applicable law. Compensation policy The compensation principles of Group Senior Management (excluding the Corporate Officers) and their individual analyses are reviewed by the Human Resources and CSR committee for information and consultation with the board of directors. The Human Resources and CSR committee may consult external experts for specific missions and analyses. The compensation policy of the Group Senior Management follows the principles of competitiveness, pay-for-performance and alignment with shareholders’ long-term interests as detailed in section 7.1 above for Corporate Officers, with the following specificities: E The competitiveness of their compensation is considered into relation to a relevant panel considering the geography and the scope of responsibilities as set out by the consultancy firm Willis Towers Watson; E The proportion of variable components within their compensation package is less than for the Corporate Officers: 75% vs. around 80% for the Corporate Officers.

Compensation paid in 2017 Gross compensation, including benefits in kind, paid by Group companies in 2017 to members of Group Senior Management other than Corporate Officers, but including members who left the Group, amounted to EUR20.3 million, including EUR6.8 million in variable compensation paid in the 2017 financial year. The objectives for Group results for the financial year in question were: E Group organic sales growth; E Improvement of Group Adj EBITA on sales (org.); E Group cash conversion rate; E Field services sales growth (without process automation); E Systems gross margin; E Digital index; E Planet and Society Barometer. As of December 31, 2017, as part of the annual long-term incentive plan, Group Senior Management other than senior Corporate Officers held: E 546,163 shares, of which 375,500 are conditional; E 113 options; E 92,680 Stock Appreciation Rights (SARs). Pension benefits Schneider Electric policy concerning pension benefits states that: E the Group’s Senior Management not subject to the French Social Security System are covered by pension plan arrangements in line with local practices in their respective countries; E the Group’s Senior Management subject to the French Social Security system, with the exception of Corporate Officers, are covered by the supplementary defined-contribution pension (article 83) plans for employees, and/or Group Senior Management. Their defined-benefit pension plan (article 39) was cancelled on March 22, 2016. Long-term incentive plans Performance shares were granted in 2017.

25% Variable part

75% Fixed part

2017 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

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