Danone // 2020 Universal Registration Document

6 corporate governance 6.3 Compensation and benefits of governance bodies DANONE UNIVERSAL REGISTRATION DOCUMENT 2020 249 Long-term variable compensation in cash (Group performance units) Principles • granted for a given fiscal year; • subject to performance conditions over three years on the basis of one or more quantifiable economic criteria, possibly supplemented by social and environmental criteria. These conditions are determined in advance by the Board of Directors, on the recommendation of the Governance Committee, which each year also determines whether or not the targets are achieved for each GPU plan. In the framework of the simplification of the Chief Executive Officer’s compensation structure and in order to increase its share-based component, no GPUs have been granted to Mr. Emmanuel FABER since 2017. More information on GPU plans is provided in section 6.4 Detailed information on long-term compensation plans , including the (i) general principles, (ii) performance targets, (iii) other applicable rules, (iv) details of GPUs granted in 2020 and a review of the potential achievement of performance conditions for 2020, and (v) detailed information on GPU plans in effect as of December 31, 2020. Long-term variable compensation in shares (Group performance shares) Principles • established in 2010 to strengthen the commitment of beneficiaries (corporate officers, Executive Committee members and over 1,600 senior executives) to support Danone’s development and increase its share price over the long term; • approved annually by the Shareholders’ Meeting in a specific resolution; • granted by the Board of Directors on the recommendation of the Governance Committee; • subject to complementary performance criteria that are representative of Danone’s performance and consistent with its specific business, assessed over a three-year period. These reflect key indicators monitored by investors and analysts to measure the performance of companies in the food and beve- rage sector. They may also include a societal and/or environmental criterion. The Board of Directors determines whether or not these performance objectives have been achieved, after an initial review by the Governance Committee; • definitively granted to all beneficiaries, subject to them being continuously present for four years, with the exception of those specified in the plan rules (including in the event of death or disability) or decided by the Board of Directors. In the case of the executive corporate officers, the Board of Directors may, where applicable, decide to partially waive the continuous employment condition on a prorata temporis basis and based on a reasoned opinion. Moreover, in the event of a change of control, the fulfillment of the continuous employment condi- tion for GPS granted from 2019 onwards to executive corporate officers and members of the Executive Committee will be assessed on a prorata temporis basis, calculated between the date of the grant and the date of the change of control, compared to the initial delivery date stipulated in the plan. In addition, regarding the fulfillment of the performance conditions, either the Board of Directors will have reached a decision regarding the level of achievement or no such decision will have been reached, in which case the Board, acting on the recommendation of the Governance Committee, will assess the extent to which each performance condition has been fulfilled on the basis of the available information; • capped as follows: the number of performance shares granted to executive corporate officers must not exceed 60% of each executive corporate officer’s overall target compensation in terms of its accounting valuation (in accordance with the IFRS standards) estimated at the time of the grant; • granted in the form of Danone shares that the person is obliged to hold in accordance with the principles determined by the Board and stated below. Performance conditions These are generally: • an external performance criterion based on Danone’s sales growth compared to that of a group of Danone’s historical peers consisting of leading international groups in the food and beverage sector; • an internal performance criterion based on a key financial indicator such as operating margin, free cash flow or other; • an external environmental performance criterion. More information on the GPS plans is provided in section 6.4 Detailed information on long-term compensation plans , including the (i) general principles, (ii) performance conditions, (iii) other applicable rules, (iv) details of the GPS granted in 2020 and a review of the potential fulfillment of performance conditions for previous plans, and (v) de- tailed information on the plans in effect as of December 31, 2020.