2021 UNIVERSAL REGISTRATION DOCUMENT

The Audit Committee consists of 60% of independent Directors (i.e., three out of five, excluding Directors representing the employees). The Committee is chaired by Ms Virginie Morgon, an independent Director. The Board of Directors considers this composition satisfactory in light of the necessary presence of two Directors from L’Oréal’s majority shareholders and its choice of maintaining a limited number of members in order to ensure the efficiency of the work of this Committee which requires a certain level of expertise in finance or accounting.

The Nominations and Governance Committee currently consists of 50% independent Directors. The Committee is chaired by Ms Sophie Bellon, an independent Director. Furthermore, in 2021, the Haut Comité de Gouvernement d’Entreprise (High Committee on Corporate Governance) restated that “an Audit Committee in which three of the five members are independent, or a Remuneration Committee in which two of the four members are independent, complies with the spirit of the code as long as it is chaired by an independent Director” and acknowledged that a committee in which 50% (rather than a majority) of the members are independent Directors complies with the recommendation of the Code as long as the chairman of the committee is independent (November 2021 report).

The Board of Directors considered that the objective pursued by this recommendation can be fully achieved by maintaining the suspension of the employment contract and clearly separating the benefits related to the employment contract from those tied to his corporate office.

This position of the Board applies to the current office of Mr Jean-Paul Agon as Chairman and Chief Executive Officer (which ended on 30 April 2021) and to the ongoing office of Mr Nicolas Hieronimus as Chief Executive Officer and, in the future, to any new executive officer appointed who has over 15 years of service in the Group at the time of appointment. L’Oréal’s ongoing policy has been to appoint employees who have completely succeeded in the various stages of their career in the Group as executive corporate officers.

This is how Mr Jean-Paul Agon, then Deputy Chief Executive Officer, was appointed Chief Executive Officer in April 2006, followed by Chairman and Chief Executive Officer in 2011, following a brilliant career spanning 27 years within L’Oréal. The Board of Directors noted that if, in accordance with the AFEP-MEDEF recommendation, Mr Jean-Paul Agon’s employment contract with L’Oréal was to be terminated, Mr Jean-Paul Agon would lose the status he acquired as a result of the twenty-seven years he spent working for the Group as an employee.

The situation of Mr Nicolas Hieronimus is similar: he became Chief Executive Officer from 1 May 2021, after a highly successful 34-year career in the Group. The Board of Directors noted that if, in accordance with the AFEP-MEDEF recommendation, his employment contract with L’Oréal were to be terminated, Mr Nicolas Hieronimus would lose the status he acquired as a result of the 34 years he spent working for the Group as an employee. The AMF, in its Recommendation 2012-02 last updated on 5 January 2022, considers that a senior manager’s length of service as a company employee and their personal situation may justify maintaining their employment contract if the company provides explanations adapted to the individual situation of each executive (length of service and description of the benefits granted under the employment contract).