2 members of the Human Resources and Remuneration Committee are members of the Strategy and Sustainability Committee at which the actions taken with regard to the programmes concerning the Group’s social and environmental responsibility are discussed.
This information contributes to the assessment of the non-financial and qualitative portion of the annual variable remuneration.
The Chairwoman of the Human Resources and Remuneration Committee is a member of the Audit Committee and participates in the closing of the financial statements as well as the examination of the risk prevention policy. She is also Chairwoman of the Nominations and Governance Committee, which offers her a Company-wide vision of the various performance assessment criteria.
The Committee can also carry out a more in-depth evaluation of the Company’s performance by contacting the Company’s main senior managers, after having informed the General Management.
This information enriches their vision of the strategy and performances of the Company and its executive corporate officer.
Recommendations are made on these bases to the Board of Directors, which then makes its decisions on the executive corporate officer’s remuneration collectively, in accordance with the remuneration policy approved by the Annual General Meeting.
The organisation of the work of the Committee on the remuneration of the executive corporate officer is shown in the chart below.
The Human Resources and Remuneration Committee carefully analyses the law and reports concerning executive remuneration, notably the French financial markets authority’s (AMF) report on corporate governance and the remuneration of executives of listed companies, and the report of the High Committee on Corporate Governance.
It is mindful of the observations and requests of investors and strives to accommodate them while preserving consistency in the remuneration policy adopted by the Board and subject to constraints relating to the disclosure of confidential information.
French Order no. 2019-1234 of 27 November 2019 encourages companies to provide for any exceptions in the event of extraordinary circumstances in their remuneration policy. Failing this, the Board of Directors would be unable to grant an element of remuneration not provided for in the remuneration policy previously approved by the Annual General Meeting, even though this decision would be necessary in view of these exceptional circumstances. It is stated that this derogation may only be temporary, pending the approval of the amended remuneration policy by the next Annual General Meeting, and should be duly substantiated.
If applicable, the adaptation of the remuneration policy to exceptional circumstances would be decided by the Board of Directors on the recommendation of the Human Resources and Remuneration Committee , after seeking the opinion, as necessary, of an independent consulting firm. Thus, for example, the recruitment of a new corporate officer under unforeseen conditions might require the temporary adaptation of some existing remuneration elements or the proposal of new remuneration elements. In this case, the Board of Directors would take into account the experience, expertise and remuneration of the executive concerned in order to propose exceptional remuneration that could not exceed the amount of the benefits he or she would have had to relinquish by leaving his or her previous role.
It might also be necessary to amend, subject to compliance with the caps determined in the remuneration policy, the performance conditions governing the acquisition of all or some of the existing remuneration elements in the event of exceptional circumstances resulting from a significant change in the Group’s scope following a merger or sale, the acquisition or creation of a significant new business activity or the elimination of a significant business activity, a change in accounting policy or a major event affecting the markets and/or L’Oréal’s major competitors.
