In total, 86% of the Group’s employees work in subsidiaries where there are employee representative councils. 46% of the Group’s employees are covered by a collective agreement and 97% of them are covered by company collective agreements.
Two Directors representing the employees have been member of L’Oréal Board of Directors since 2014 (see section 2.2.1.3.“Two Directors representing the employees since July 2014” of this document).
An agreement signed in 1996 between L’Oréal and French and European trade unions led to the establishment of the Company’s Instance Européenne de Dialogue Social/European Works Council. This council leads discussions and formal meetings with its members about the Group’s current situation and future perspectives, on the basis of an agenda prepared with the Liaison Secretariat. This council covers approximately 30,000 employees in 25 member countries of the European Economic Area and the United Kingdom.
L’Oréal’s social policy permits the signing of a certain number of collective agreements every year. In 2021, 148 agreements were signed in France and 100 agreements were signed in the rest of the world. In total, the number of agreements in force on 31 December 2021 was 743, 424 of which were in France.117 agreements in force cover health and safety, in whole or in part.
These agreements primarily cover work organisation, remuneration and working conditions (working hours, quality of life at work, professional equality, remote working, health and safety, etc.). They contribute to the proper functioning and to the performance of the Group since they strengthen employee participation and dialogue with their representatives.
The L’Oréal remuneration policy aims at supporting the achievement of the Group’s objectives and is an integral part of its development strategy. L’Oréal wants to attract and retain talents, propose motivating career paths and encourage performance and engagement of its employees while accompanying the evolution of its jobs and business.
For L’Oréal, social and economic performance are closely linked. The Group ensures that all employees receive at least the minimum salary set by local law or applicable collective agreements. In most of the countries, L’Oréal’s lowest base salaries are much higher than the national minimum wages in force.
A process to monitor remuneration practices is in place to ensure that the Group’s permanent employees receive at least a "living wage", i.e. a salary that covers their basic needs, as calculated in line with the best practices and with the support of independent experts.
A total rewards approach is used to provide each employee with a competitive rewards package including both compensation elements (fixed pay, variable pay, long-term incentives) and employee benefits.
The Group is implementing a remuneration policy that combines external competitiveness with internal equity, and rewards both individual and collective performances. In addition, employees share in the Company’s results through results-based collective profit-sharing schemes rolled out globally.
The L'Oréal remuneration policy is formalised within a "Rewards charter" and is implemented by a network of Rewards experts present in the different countries. External surveys are conducted every year with specialist firms to ensure L’Oréal’s competitive positioning in relation to each local reference market.
Finally, L’Oréal’s ambition is for all employees to understand their remuneration and how it is determined. The Group makes sure that it communicates clearly and transparently on this subject.
L’Oréal’s remuneration policy is supported by an annual employee performance assessment system applied in all the Group’s subsidiaries. It enables the communication of remuneration decision making principles, processes and outcomes. The Group’s subsidiaries are encouraged to provide employees, once a year, with a document presenting the evolution of the remuneration package and its various components with clarity and transparency.
| € millions | 2019 | 2020 | 2021 |
|---|---|---|---|
| Total | 6,131 | 6,124 | 6,471 |
The comparison between the three years takes into account the impacts of foreign exchange and is not representative of the real changes in personnel costs.
In line with the L’Oréal policy to share growth with its employees, in 2018, L’Oréal launched its first worldwide employee share ownership plan, with very satisfactory results. This plan was indeed recognised by the French Federation of Employees and Former Employee Shareholder Associations (FAS), which awarded L’Oréal the "CAC All Tradable Grand Prix" in 2018.
A second employee share ownership plan was put in place in 2020, as L’Oréal intended to offer a new opportunity for employees to support the growth of the company and participate in its strategic project. These plans are designed to gather, unite and increase the loyalty of employees worldwide by enhancing a feeling of belonging, engagement and social cohesion. Eligible employees had the possibility of purchasing shares with preferential conditions including, where permitted by local law, a 20% discount on the share reference price with an employer matching share contribution of up to 4 free shares.
The plan was rolled out in 57 countries in 2020, 6 more than in 2018. Once again, it was a big success with a 35% subscription rate, similar to the first plan, which represents a high percentage compared to companies that have set up employee shareholding plans(1).
(1) 2019 survey on employee share ownership by the French Federation of Employee Shareholder Associations and Former Employees - FAS. The survey includes entities in France that practice employee share ownership and performs a recurring analysis between these same entities
