2021 UNIVERSAL REGISTRATION DOCUMENT

2. Corporate Governance

Qualitative criteria: Management Weighting: 7.5%
  • Successful renewal of the Executive Committee, strengthening its diversity (one third are women and nearly half are of foreign nationality) High retention rate for the Top 300.
  • Governance: the transition from Jean-Paul Agon to Nicolas Hieronimus as CEO was an exemplary process. L’Oréal received the AGEFI Grand Prix Award for exemplary corporate governance in 2021.
  • Covid-19 crisis management
    • When conditions made it possible, a new hybrid work model was implemented.
    • 12,909 employees completed the Best of Both Worlds (BOB) training module to familiarise themselves with a hybrid working environment.
    • Maintained a very high level of health safety for employees around the world.
  • Pulse Survey (internal employee opinion survey), the rating for the Simplicity managerial transformation programme rose by 3 points compared to 2020.
  • Sense of purpose (raison d'être) : Launch of the L’Oréal Group’s first communication campaign centred around its sense of purpose.
  • Successful renewal of the Executive Committee, strengthening its diversity (one third are women and nearly half are of foreign nationality) High retention rate for the Top 300.
  • Governance: the transition from Jean-Paul Agon to Nicolas Hieronimus as CEO was an exemplary process. L’Oréal received the AGEFI Grand Prix Award for exemplary corporate governance in 2021.
  • Covid-19 crisis management
    • When conditions made it possible, a new hybrid work model was implemented.
    • 12,909 employees completed the Best of Both Worlds (BOB) training module to familiarise themselves with a hybrid working environment.
    • Maintained a very high level of health safety for employees around the world.
  • Pulse Survey (internal employee opinion survey), the rating for the Simplicity managerial transformation programme rose by 3 points compared to 2020.
  • Sense of purpose (raison d'être) : Launch of the L’Oréal Group’s first communication campaign centred around its sense of purpose.

Weighting: 7.5%

 
Qualitative criteria: Image, Company reputation, Dialogue with stakeholders Weighting: 7.5%
  • The Group’s international influence and that of its teams:
    • Dubai World Expo: double partnership (France Pavilion via the Notre-Dame exhibition with Histovery and the official Beauty Partner)
    • L’Oréal was ranked in Fortune magazine’s “Change the World” list.
    • Barbara Lavernos, Deputy CEO, featured in Fortune’s list of most powerful women in the world.
    • Entered into a tech and innovation environment (Verily partnership, CES, L’Oréal Water Saver, which was named a top innovation of 2021 according to TIME magazine).
    • Alexandra Palt participated in One Planet Summit’s high-level virtual conference.
    • Presentations as part of B4IG (Business For Inclusive Growth).
  • Group influence at national level: meetings with national public officials (including with the French president and a visit from the French Minister of Labour in November 2021) and local public officials (Clichy Sponsorship project).
  • Attendance at forums and conferences that promote the value of the Company in society:
    • Presentation at “Mardis de l’ESSEC” (ESSEC Tuesdays).
    • Presentation before the new cohort at Real Campus (School of Hairdressing & Entrepreneurship).
    • Climate Week NYC Opening Ceremony.
    • Presentation at Club 21e siècle
    • Alexandra Palt participated in One Planet Summit’s high-level virtual conference.
    • Presentations as part of B4IG (Business For Inclusive Growth).
  • Sustainable development:
    • L’Oréal is the only company in the world, among nearly 6,000, to have received three “A” ratings from the Carbon Disclosure Project for the sixth consecutive year, which is the highest score in three areas: climate, sustainable water management and the fight against deforestation.
    • L’Oréal received the Terra Carta Seal by HRH The Prince of Wales in recognition of its commitment to creating a sustainable future.
    • L’Oréal was ranked No. 1 across all categories in the Vigéo Eiris ranking.
  • Diversity and inclusion:
    • L’Oréal was one of the top 100 companies in the Refinitiv Diversity & Inclusion ranking.
    • L’Oréal won the “Parité du Top 100” Special Award for the Feminisation of Governing Bodies.
    • Organised the first meeting of the Global Diversity Equity and Inclusion Advisory Board.
  • Ethics:
    • L’Oréal was recognised for the twelfth time as one of the “World’s Most Ethical Companies” by the Ethisphere Institute.
    • For the seventh consecutive year, L’Oréal was recognised as a Global Compact LEAD company by the United Nations.
    • Ethics Day on 14 October 2021: two live webchats with Nicolas Hieronimus were open to all employees worldwide.
  • Heritage:
    • L’Oréal supported an exhibition on beauty in Ancient Greece held at the Museum of Cycladic Art in Athens: “Kállos. The Ultimate Beauty”.
    • L’Oréal paid homage to Notre-Dame de Paris at the Dubai World Expo.
  • The Group’s international influence and that of its teams:
    • Dubai World Expo: double partnership (France Pavilion via the Notre-Dame exhibition with Histovery and the official Beauty Partner)
    • L’Oréal was ranked in Fortune magazine’s “Change the World” list.
    • Barbara Lavernos, Deputy CEO, featured in Fortune’s list of most powerful women in the world.
    • Entered into a tech and innovation environment (Verily partnership, CES, L’Oréal Water Saver, which was named a top innovation of 2021 according to TIME magazine).
    • Alexandra Palt participated in One Planet Summit’s high-level virtual conference.
    • Presentations as part of B4IG (Business For Inclusive Growth).
  • Group influence at national level: meetings with national public officials (including with the French president and a visit from the French Minister of Labour in November 2021) and local public officials (Clichy Sponsorship project).
  • Attendance at forums and conferences that promote the value of the Company in society:
    • Presentation at “Mardis de l’ESSEC” (ESSEC Tuesdays).
    • Presentation before the new cohort at Real Campus (School of Hairdressing & Entrepreneurship).
    • Climate Week NYC Opening Ceremony.
    • Presentation at Club 21e siècle
    • Alexandra Palt participated in One Planet Summit’s high-level virtual conference.
    • Presentations as part of B4IG (Business For Inclusive Growth).
  • Sustainable development:
    • L’Oréal is the only company in the world, among nearly 6,000, to have received three “A” ratings from the Carbon Disclosure Project for the sixth consecutive year, which is the highest score in three areas: climate, sustainable water management and the fight against deforestation.
    • L’Oréal received the Terra Carta Seal by HRH The Prince of Wales in recognition of its commitment to creating a sustainable future.
    • L’Oréal was ranked No. 1 across all categories in the Vigéo Eiris ranking.
  • Diversity and inclusion:
    • L’Oréal was one of the top 100 companies in the Refinitiv Diversity & Inclusion ranking.
    • L’Oréal won the “Parité du Top 100” Special Award for the Feminisation of Governing Bodies.
    • Organised the first meeting of the Global Diversity Equity and Inclusion Advisory Board.
  • Ethics:
    • L’Oréal was recognised for the twelfth time as one of the “World’s Most Ethical Companies” by the Ethisphere Institute.
    • For the seventh consecutive year, L’Oréal was recognised as a Global Compact LEAD company by the United Nations.
    • Ethics Day on 14 October 2021: two live webchats with Nicolas Hieronimus were open to all employees worldwide.
  • Heritage:
    • L’Oréal supported an exhibition on beauty in Ancient Greece held at the Museum of Cycladic Art in Athens: “Kállos. The Ultimate Beauty”.
    • L’Oréal paid homage to Notre-Dame de Paris at the Dubai World Expo.

Weighting: 7.5%

 
2.4.2.3.3. Granting of performance shares

Pursuant in particular to Articles L. 225-197-1 and L. 22-10-8 of the French Commercial Code and the authorisation of the Ordinary and Extraordinary General Meeting of 30 June 2020, the Board of Directors meeting on 7 October 2021, taking into account the performance of Mr Nicolas Hieronimus and the share price valuation, decided to grant him 17,000 performance shares (ACAs – “Attributions Conditionnelles d’Actions”, existing conditional grants of shares), in accordance with the remuneration policy.

The estimated fair value, according to the IFRS standards applied in preparing the Consolidated Financial Statements, of one performance share (ACAs) for the 7 October 2021 plan, of which Mr Nicolas Hieronimus is part, is €339.34.

The estimated fair value, according to the IFRS standards, of the 17,000 performance shares (ACAs) granted in 2021 to Mr Nicolas Hieronimus is therefore €5,768,780.

These shares will only vest, in whole or in part, once the performance conditions described below are met.

Performance conditions

Final vesting of these shares is subject to achievement of performance conditions which will be recorded at the end of a four-year vesting period as from the grant date.

Half of the number of fully vested shares will depend on growth in comparable cosmetics sales compared to the growth of a panel of competitors, which consists in 2021 of Unilever, Procter & Gamble, Estée Lauder, Shisei do, Beiersdorf, Johnson & Johnson, Henkel, LVMH, Kao, and Coty; and the other half will depend on the growth in the Group’s consolidated operating profit.

The calculation will be based on the arithmetical average for the 3 full financial years of the vesting period. The first full year taken into account for assessment of the performance conditions relating to this grant is 2022.