Danone // 2020 Universal Registration Document

corporate governance 6.4 Detailed information on long-term compensation plans DANONE UNIVERSAL REGISTRATION DOCUMENT 2020 262 6.4 DETAILED INFORMATION ON LONG-TERM COMPENSATION PLANS Contents Group performance shares (GPS) 262 Principal rules 262 Summary of GPS delivered in 2020 and not yet delivered 264 Presentation of 2021 GPS submitted to the Shareholders’ Meeting of April 29, 2021 for approval 266 Review of the conditions related to GPS not yet delivered 271 Group performance units (GPU) 284 Principles 284 Situation as of December 31, 2020 285 Objectives applicable to the GPU in effect 285 GROUP PERFORMANCE SHARES (GPS) Principal rules General principles Authorization by the Shareholders’ Meeting Group Performance Shares (GPS) were introduced in 2010. The grant of GPS must be authorized by the Shareholders’ Meeting. Since 2013, this authorization has been granted until the end of each fiscal year and is subject to shareholders approval every year. Cap on the number of GPS granted GPS have always had a limited impact on both capital dilution and share ownership. GPS grants are subject to a double cap approved by the Shareholders’ Meeting that limits both (i) the number of GPS that may be granted and (ii) the number of GPS that may be granted to corporate officers. Limitations for GPS not yet delivered Shareholdersʼ Meeting that approved the GPS 4/27/2017 4/26/2018 4/25/2019 6/26/2020 Maximum number of GPS that may be granted (a) 0.2% 0.2% 0.2% 0.2% Of which the maximum number of GPS that may be granted to the corporate officers (a) 0.03% 0.03% 0.03% 0.03% (a) Expressed as a percentage of that year’s share capital subsequent to the Shareholdersʼ Meeting that authorized the plans. This number of shares does not reflect any adjustments thatmay bemade pursuant to legal requirements or any contractual provisions thatmay require other adjustments in order tomaintain the rights of shareholders and other rights-holders. A new authorization with the same caps as those approved by the Shareholders’ Meeting of June 26, 2020 will be submitted to the Shareholders’ Meeting of April 29, 2021 for approval. Grant by the Board of Directors GPS are granted annually by the Board of Directors on the recom- mendation of the Governance Committee, at the same times each year. In principle, they are therefore granted at the end of July and, if necessary, are granted to certain new employees at the end of the year. It should be noted that, in accordance with the compensation policy, the number of GPS granted to the corporate officers may not exceed 60% of each corporate officer’s overall target compensation in terms of accounting valuation (in accordance with IFRS) estimated at the time of the grant. Review of the achievement of performance objectives by the Board of Directors After an initial review by the Governance Committee, the Board of Directors determines whether performance objectives have been achieved. Valuation and accounting in the consolidated financial statements Long-termcompensation in the formof GPS is valued and accounted for in Danone’s consolidated financial statements pursuant to IFRS 2 Share-based payments (see Note 8.4 of the Notes to the consolidated financial statements). Performance conditions The performance conditions for GPS are determined in advance at the beginning of the year and are indicated in the comments on the resolutions submitted to the Shareholders’ Meeting describing in particular the resolution related to GPS. Performance conditions are determined by the Board of Directors on the recommendation of the Governance Committee. They are the same for all beneficiaries and apply to all the GPS granted. Performance conditions are stringent and consistent with Danone’s current environment. They include complementary criteria that are representative of Danone’s performance and adapted to the speci- fic nature of its business. These criteria reflect the key indicators monitored by investors and analysts to measure the performance of companies in the food and beverage sector. Some are internal and others are external. Since 2018, one of the conditions has been linked to Danone’s en- vironmental performance. Weighted by 20%, it reflects the rating assigned to Danone by CDP, particularly under its Climate Change program (see sections Presentation of 2021 GPS submitted to the Shareholders’ Meeting of April 29, 2021 for approval and Review of the conditions related to GPS not yet delivered ).