Management and examined by the Human Resources and Remuneration Committee.
The Board of Directors will decide the identity of the beneficiaries of the grants, the number of shares allocated to each one and the performance conditions to be met for the final vesting of all or part of the shares.
The Board of Directors, at its meeting of 9 February 2022 and on the recommendation of the Human Resources and Remuneration Committee, has now decided to introduce criteria for non-financial performance in addition to financial performance within the long-term remuneration plan, in order to correlate them with L’Oréal’s strategy in which economic performance and environmental and social performance go hand-in-hand.
These performance conditions will take into account:
The figures recorded each year to determine the levels of performance achieved are published in the Annual Financial Report.
The Board of Directors considers that both of these types of criteria, assessed over a long period of three full financial years, are complementary, in line with the Group’s objectives and its specificities, and should make it possible to promote balanced, continuing and sustainable growth over the long term. They are demanding but remain a source of motivation for the beneficiaries.
Pursuant to the criterion relating to sales, in order for all free shares granted to be fully vested by the beneficiaries at the end of the vesting period, L’Oréal’s comparable growth in sales must outperform the average growth in sales of the panel of competitors. This panel comprises Unilever, Procter & Gamble, Estée Lauder, Shiseido, Beiersdorf, Johnson & Johnson, Henkel, LVMH, Kao, and Coty. Below this level, the grant decreases. If L’Oréal’s comparable growth in net sales is less than the average growth in sales of the panel of competitors, no share will be allocated for this criterion.
Pursuant to the criterion related to operating profit, a level of growth, defined by the Board, but not made public for confidentiality reasons, must be met or exceeded in order for all free shares granted to be finally vested by the beneficiaries at the end of the vesting period. Below this level, the number of finally vested shares is in decline. If the operating profit does not increase in absolute value over the period, no share will finally vest pursuant to this criterion.
Pursuant to the criterion related to the fulfilment of made as L’Oréal for the Future Commitments, in order for all the free shares granted to be finally vested by the beneficiaries at the end of the vesting period, a certain average level of achievement of the L’Oréal for the Future Committements, defined by the Board and made public, must be reached over the period. Below this level, the grant decreases. No shares will vest if the average of the results for the L’Oréal for the Future Committements falls below the minimum level defined by the Board and made public.
Pursuant to the criterion relating to gender balance within Management Bodies, in order for all the free shares granted to be finally vested by the beneficiaries at the end of the vesting period, the average representation of one of the sexes must account for at least 40% of employees on the Management Bodies. Below this level, the grant decreases. No shares will vest in relation to this criterion if the average representation of one of the sexes is less than 35% over the vesting period.
These performance conditions will apply, for all individual grants greater than 100 free shares per plan, to all shares above the hundredth share, with the exception of grants to the directors and corporate officers and members of the Executive Committee, for which they will apply in total.
The free grant of shares may be carried out for all Group staff without performance conditions, or for shares allocated on the basis of cash subscriptions carried out as part of an increase in share capital reserved for Group employees pursuant to the twentieth and twenty-first resolutions.
Any allocations of shares to the directors and corporate officers will be decided by the Board of Directors on the basis of the proposals of the Human Resources and Remuneration Committee after assessment of their performance.
The executive corporate officers of L'Oréal will be required to hold 50% of their fully vested shares in registered form until they cease to hold office.
