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DANONE
REGISTRATION DOCUMENT 2015
Corporate Governance
6.3 Compensation and benefits of corporate officers and governance bodies
266
(b) Achievement of Trading operating margin objectives set by the Board of Directors and announced to the market (the “Margin Objective”)
over a two-year period, i.e. for fiscal years 2013 and 2014:
•
if the Margin Objective is achieved in both 2013 and 2014, the definitive grant will be 100%; and
•
if the Margin Objective is not achieved in either 2013 or 2014 or if it is achieved in only one of these years, the definitive grant will be 0%.
Definitions
Margin Objective for 2013
Trading operating margin down by a maximum of 50 basis points on a like-for-like
basis relative to the trading operating margin for fiscal year 2012.
Margin Objective for 2014
The higher of (i) a positive change (i.e. an increase in basis points) in the trading
operating margin on a like-for-like basis relative to the trading operating margin for
fiscal year 2013, and (ii) any trading operating margin objective for fiscal year 2014
that may be subsequently set by the Board of Directors and announced to the market.
Trading operating margin
Ratio of trading operating income to net sales.
Net sales
Danone's consolidated net sales, as defined by IFRS.
Trading operating income
Danone's operating income excluding "Other operating income (expense)". "Other
operating income (expense)", in accordance with Recommendation 2009-R.03 of the
CNC “on the format of financial statements of entities applying international account-
ing standards”, comprises significant items that, because of their exceptional nature,
cannot be viewed as inherent to the Group's current activities. These mainly include
capital gains and losses on disposals of fully consolidated companies, impairment
charges on goodwill, significant costs related to strategic restructuring and major
external growth transactions, and costs related to major litigation. Moreover, since
the implementation of revised IFRS 3, Business Combinations, "Other operating
income (expense)" has also included costs to acquire companies in which the Group
acquires a controlling interest.
Change in trading operating margin on
a like-for-like basis
Increase or decrease, mainly after exclusion of the impact of: (i) changes in exchange
rates, with both previous year and current year indicators calculated based on the
same exchange rates (the exchange rate used is a projected annual rate determined
by the Group for the current year and applied to both years), and (ii) changes in con-
solidation scope, with indicators related to the current year calculated on the basis
of the scope of consolidation of the previous year.
Other applicable rules
"No payment below the market objectives”
principle
In accordance with the “no payment below the market objectives” principle, in the
event that the Board of Directors decides to revise its trading operating margin
objective upward for 2013 and/or 2014, the Margin Objective would be automatically
adjusted upward for the corresponding year on the basis of the trading operating
margin objective as amended (to avoid any confusion, it should be noted that in the
event that the trading operating margin objective announced to the market is revised
downward, the amount of the Margin Objective will not be adjusted and will therefore
be calculated on the basis of the initial operating margin objective announced to the
market for the current year).
Recognition by the Board of Directors of
fulfillment of this performance condition
The Board of Directors must state whether this performance condition was met,
through a duly justified decision taken at a later date and mentioned in the Board of
Directors' report to the Shareholders' Meeting, following a recommendation by the
Nomination and Compensation Committee.