Carrefour - 2017 Registration Document

CORPORATE GOVERNANCE Compensation and benefits granted to Company Officers 2017 REGISTRATION DOCUMENT | CARREFOUR 3. 150 2. Methods for determining the reference compensation The reference compensation is the average of the gross annual compensation received within the Group over the last three calendar years preceding the year of retirement. This average may not exceed 60 times the annual ceiling for social security contributions. In determining the reference compensation, only the annual base and the annual variable compensation paid are taken into consideration. Any other form of compensation is excluded, whether direct or indirect. 3. Rate of accrual of pension rights The amount of the annual pension supplement is equal to 2.75% of the reference compensation per year of service, subject to the performance conditions being met. The annuity thus calculated will be added to any other pensions or retirement annuities (social security old age pension, compulsory top-up pension for managers (AGIRC/ARRCO), annuities from supplementary company schemes, etc.). The number of years of service retained for calculating the pension supplement will be that acquired by Alexandre Bompard within the Group in his capacity as an employee or an Executive Officer. It takes into account his entire length of service within the Group, including under non-consecutive contracts. 4. Fulfilment of performance conditions The accrual of pension rights under this scheme is subject to performance conditions. Any given year is only taken into account in determining the amount of the annuity if it corresponds to a year during which the performance conditions were met. Each year, the Board of Directors determines the applicable performance conditions that correspond, barring exceptions, to meeting at least 80% of the quantitative performance conditions, which triggers the payment of annual variable compensation to Alexandre Bompard. At the end of each year, the Board of Directors checks whether the performance conditions were met during the year. If this is not the case, the year is not taken into account when calculating the annuity. Moreover, the allocation of a pension supplement presupposes that, for at least two-thirds of the years, the performance conditions have been validated during Alexandre Bompard’s period of service within the Group. 5. Methods for determining caps The amount of the annuity is subject to a double cap. If this cap is exceeded, it is reduced accordingly. The cumulative amount of the gross annual annuity and of all the annuities from supplementary Group retirement schemes cannot exceed 25% of the reference compensation. Moreover, the amount of the gross annual annuity cannot exceed the difference between: 45% of the reference compensation; and ● the gross annual amount of all the base, compulsory top-up and ● supplementary pensions. 6. Methods of financing pension rights The annuities are paid by an insurance company to which the Company pays premiums according to the financing requirements that evolve as the beneficiaries retire and claim their pensions. 7. Charges and contributions payable by the Company The employer pays an annual contribution of 24% on the premiums paid to the insurance company. During its meeting on April 11, 2018 and on the recommendation of the Compensation Committee, the Board of Directors noted that the applicable performance conditions triggering the payment of the Chairman and Chief Executive Officer’s annual variable compensation, i.e., fulfilment of at least 80% of the quantitative performance conditions, had been met in 2017. The estimated amount of the gross annual annuity at December 31, 2017 would have been 64,726 euros. Termination payment On July 18, 2017, the Board of Directors decided, on the recommendation of the Compensation Committee, that Alexandre Bompard would be entitled to a termination payment under the following conditions. The Board of Directors felt that this undertaking would further incentivise and retain Alexandre Bompard as the Group’s new Executive Officer. Conditions for the award of the termination payment: 1. Performance conditions The award of a termination payment is subject to the performance conditions pegged to achieving the following objectives: growth in sales and recurring operating income and CSR. Alexandre Bompard will therefore receive a termination payment if, during at least half of his term(s) of office and during two of the last three years preceding the termination of his appointment as Chairman and Chief Executive Officer, he exceeded all his objectives set by the Board of Directors for determining his benefits under his long-term incentive plans. If a long-term incentive plan was not in place for one of the financial years considered, only the fulfilment of the objectives set by the Board of Directors for determining his annual variable compensation will be taken into account. As an exception, if Alexandre Bompard’s term of office expires before two years have passed, the objectives mentioned above will be assessed for the year preceding the year the term expired. 2. Reasons for departure The termination payment will be paid in the event of the termination, for any reason whatsoever, of his duties as Chairman and Chief Executive Officer, except in cases of removal for gross negligence or wilful misconduct or a change of position within the Carrefour group. The Board of Directors considered that the termination payment being contingent on a non-compete obligation justifies departing from the exclusions provided under AFEP-MEDEF code in relation to termination payments for Executive Officers. The AFEP-MEDEF code recommendation only addresses termination payments, and not non-compete obligations.