2.4.1. FINANCIAL YEAR 2017 At the General Meeting of 13 June 2017, the shareholders decided, acting on a proposal from the Board of Directors, to make a significant change in the principles used to determine and structure compensation for the Chairman of the Board of Directors and the Chief Executive Officer. Compensation of the Chairman of the Board of Directors The General Meeting of Shareholders approved a proposal to the General Meeting to suppress the variable component of compensation for the Chairman without altering the amount of his total compensation package. Under this proposal, the average amount of variable compensation paid since the last update of the fixed component in January 2011 was included within his fixed compensation, whose gross annual amount would thus be raised from €350,000 to €500,000 on a gross basis in respect of financial year 2017. This decision by the Board of Directors aims in particular to bring the structure of compensation received by the Chairman of the Board of Directors in line with the AFEP-MEDEF Code, and specifically the provisions of its Article 24.2, while taking into account his role as well as his long-standing and ongoing commitment in service of the Company. Compensation of the Chief Executive Officer At the General Meeting, the shareholders approved the change in the compensation policy for the Chief Executive Officer decided by the Board of Directors. This change involves a shift in the balance between the fixed and variable components of the Chief Executive Officer’s compensation: p the fixed annual component of the Chief Executive Officer’s compensation was raised from €400,000 to €500,000, on a gross basis effective 1 January 2017, taking into account both internal and external comparatives; p under this proposal, the Chief Executive Officer’s variable compensation was raised from 40% to 60% of his annual fixed compensation should the objectives be met and its upper limit from 60% to 100% in the event of particularly outstanding performance.
This change was intended to tighten the link between performance during the year and total compensation and to encourage ambitious objectives be set without losing the motivation and loyalty effects of compensation. The criteria for the granting of annual variable compensation were also revised in the interests of clarity and compliance with AFEP- MEDEF recommendations. Two-thirds of the amount (i.e. 40%, if the targets are fully met, of the annual fixed compensation) is now based on the quantitative target and one-third of the amount (i.e. 20%, if the targets are fully met, of the annual fixed compensation) is now based on one or more qualitative targets which, under the former system, only served to raise or lower the variable compensation effectively paid. The qualitative targets continue of course to be precisely defined, in line with the Group’s strategy and/or the assessment of the Chief Executive Officer’s performance. For 2017, the quantifiable objective of operating profit on business activity and the four qualitative objectives in line with strategy were unanimously approved by the Board of Directors during its meeting of 24 February 2017, without the Chief Executive Officer being present. They have not been made public for confidentiality reasons. It should be noted that the qualitative objectives were set in line with the priorities adopted by the Group for financial year 2017, and in particular the objectives of moving toward higher value offerings and the transformation of the Group. In addition, the Board of Directors continued its project with the aim of aligning the interests of the Chief Executive Officer with those of shareholders by granting him a conditional award of 3,000 performance shares as part of a new three-year plan. As was the case for the previous plan, 50% of the shares having vested at the conclusion of the plan will need to be held for his entire term of office. The implementation of the compensation policy for company officers in 2017 is presented below in the summary statements of compensation, options and shares granted to executive company officers. As regards variable compensation, the guidelines adopted for the 2017 financial year were applied as planned, with no changes made during the financial year.
❙ SUMMARISED STATEMENT OF COMPENSATION, OPTIONS AND SHARES GRANTED TO PIERRE PASQUIER, CHAIRMAN OF THE BOARD OF DIRECTORS (TABLE 1 – AFEP-MEDEF CODE OF CORPORATE GOVERNANCE FOR LISTED COMPANIES, NOVEMBER 2016)
Compensation due for the year
Value of stock options granted during the year Value of performance shares granted during the year Value of other long-term compensation plans
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❙ SUMMARISED STATEMENT OF THE COMPENSATION OF PIERRE PASQUIER, CHAIRMAN OF THE BOARD OF DIRECTORS (TABLE 2 – AFEP-MEDEF CODE OF CORPORATE GOVERNANCE FOR LISTED COMPANIES, NOVEMBER 2016)
Amount due Amount paid Amount due
Annual variable compensation Exceptional compensation
Directors’ fees Benefits in kind
SOPRA STERIA CONVENING NOTICE 2018
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