2021 UNIVERSAL REGISTRATION DOCUMENT

2.4.2.5. Remuneration ratios and annual changes in L’Oréal’s remuneration, ratios and performance over five years

(1) For information purposes, Mr Agon waived any grants of performance shares for which he was eligible in 2020 according to the remuneration policy approved by the Annual General Meeting.

(2) The remuneration of Mr Jean-Paul Agon, Chairman and Chief Executive Officer until 30 April 2021, consists of the fixed remuneration for 2021 expressed on an annual basis and the 2020 annual variable remuneration paid in April 2021. Mr Agon did not receive any performance shares in 2021.

(3) The remuneration of Nicolas Hieronimus, Chief Executive Officer from 1 May 2021, comprises a fixed remuneration component expressed on an annual basis and a performance share award.

(4) The remuneration of Mr Jean-Paul Agon, Chairman of the Board from 1 May 2021, comprises a fixed remuneration component expressed on an annual basis.

Methodology used for calculating ratios

The ratios presented above take into account the separation of the functions of Chairman and Chief Executive Officer, which took place on 1 May 2021, as the Board of Directors decided to renew the position of Mr Jean-Paul Agon as Chairman of the Board and appoint Nicolas Hieronimus as Chief Executive Officer.

Pursuant to Article L. 22-10-9 of the French Commercial Code, for the calculation of average and median remuneration, the scope used is that of L’Oréal S.A., which comprises 9,183 employees as at 31 December 2021 (i.e. 64% of the workforce at L’Oréal France) of whom 6,641 are managers and sales representatives, 2,080 are technicians and supervisors and 462 employees and manual workers. This scope is representative of the various business lines of L’Oréal: Operations (plants and distribution centres), Sales, Marketing, Digital, Research, Support functions, etc.

For reasons of comparability, and in accordance with the recommendations of the AFEP, the number of employees selected for the calculation of average and median remuneration corresponds to a full-time equivalent workforce continuously present over 24 months, excluding corporate officers. Remuneration is calculated on the basis of all amounts paid and performance shares granted during the financial year in question.

The elements composing the executives’ remuneration used the calculation are:

• the annual fixed remuneration paid in 2021 (on an annual basis);
• the annual variable remuneration paid in 2021 (on an annual basis); and
• the performance shares valued on the grant date in 2021in accordance with the IFRS applied for the preparation of the consolidated financial statements.

The elements composing employee remuneration used in the calculation are:

• annual fixed remuneration paid in 2021;
• annual variable remuneration paid in 2021;
• other elements of annual remuneration paid in 2021 (excluding exceptional factors);
• the performance shares granted in 2021 valued in accordance with the IFRS applied for the preparation of the consolidated financial statements; and
• the gross Profit-sharing and Incentives paid in 2021.