Sopra Steria - 2019 Convening notice


Corporate governance and compensation of executive company officers

Presentation of the principles and guidelines used to determine, structure and grant the fixed, variable and exceptional components of total compensation and benefits of any kind received by the Chairman of the Board of Directors, the Chief Executive Officer and, where applicable, any Deputy Chief Executive Officers, subject to shareholder approval at the General Meeting


Items of compensation


Annual fixed compensation

Determination by the Board of Directors, acting on a recommendation by the Compensation Committee

Annual variable compensation Variable deferred compensation Multi-year variable compensation

Not applicable Not applicable Not applicable

Exceptional compensation

Applicable, by decision of the Board of Directors, contingent upon very specific circumstances (spin-off and listing of a subsidiary, merger, etc.) Payment subject to shareholder approval of all items of compensation at an Ordinary General Meeting and in all circumstances capped at 100% of annual fixed compensation

Share options, performance shares and any other long-term items of compensation

Not applicable

Directors’ fees

In accordance with the Board of Directors’ internal rules (see allocation rules in Section 1.2.5 of the chapter 2 of the Sopra Steria 2018 Registration Document, pages 66 and 67)

Any other benefits

Company car Not applicable Not applicable Not applicable

Severance pay

Non-compete payment

Supplementary pension plan

1.5.2. COMPENSATION OF THE CHIEF EXECUTIVE OFFICER 2018 and previous financial years In 2017, at the General Meeting, the shareholders approved the change in the compensation policy for the Chief Executive Officer decided by the Board of Directors: p The Chief Executive Officer’s annual fixed compensation was raised to €500,000 on a gross basis, effective 1 January 2017; p Under this proposal, the Chief Executive Officer’s variable compensation was set at 60% of his annual fixed compensation should the objectives be met, capped at 100% in the event of particularly outstanding performance. The procedures used to determine the granting of annual variable compensation were also revised in the interests of clarity and compliance with AFEP-MEDEF recommendations. Of the criteria taken into account, two-thirds (i.e. 40% of annual fixed compensation, if targets are fully met) was based on the quantifiable target (operating margin on business activity) and one-third (i.e. 20% of annual fixed compensation, if targets are fully met) was based on one or more qualitative targets. The qualitative targets are precisely defined, in line with the Group’s strategy and/or the assessment of the Chief Executive Officer’s performance. For 2018, the quantifiable objective of operating margin on business activity and the three qualitative objectives in line with strategy were unanimously approved by the Board of Directors at its meeting of 16 February 2018, without the Chief Executive Officer being present. They have not been made public for confidentiality reasons. It should be noted that the qualitative targets were aligned with the Group’s organisational, governance and HR transformation priorities. While noting the progress made by the Group in 2018, particularly on the cash generation front, the Compensation Committee took into consideration the implications for all the various stakeholders (employees and management, shareholders) of the shortfall in the operating margin on business activity relative to the targets set at

the beginning of the year. At the end of its review, it concluded that the Group’s performance was not sufficient to justify the payment of variable compensation in respect of the 2018 financial year. After due consideration, the Board of Directors approved the recommendation made by the Compensation Committee. The long-term incentive plan for senior managers based on the grant of rights to performance shares (on the basis of the authorisation received at the General Meeting of the shareholders on 22 June 2016) gave rise to the implementation at the beginning of the year of a third three-year plan covering the 2018–2020 plan, and Vincent Paris was thus granted rights to 3,000 shares. For this plan and for those that preceded it in 2016 and 2017: p For all recipients, the granting of shares is subject to continued employment at the end of the vesting period. However, this condition may be waived in whole or in part on an exceptional basis, depending on the circumstances and arrangements for his departure; p Strict performance conditions are measured over three financial years (the year of allotment and the two following years) against targets for organic consolidated revenue growth, operating profit on business activity (expressed as a percentage of revenue) and free cash flow. These targets are at least equal to any guidance disclosed to the financial market; p Achievement of the performance condition is measured by calculating the average annual achievement rates, with each of the three criteria given an equal weighting; p Vincent Paris is subject to the same rules as all the other recipients under these plans. In addition, the Board of Directors decided that he must retain at least 50% of the vested shares allocated to him under these plans throughout his entire term of office as Chief Executive Officer. Vincent Paris has agreed not to engage in any hedging transactions with respect to performance shares held until the expiry of these plans. Details of Vincent Paris’ compensation for 2017 and 2018 are shown below in the standard format tables recommended in the AFEP- MEDEF Code (see Section 1.5.3 of this document, pages 46 to 49).



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