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DANONE
REGISTRATION DOCUMENT 2015
Corporate Governance
6.3 Compensation and benefits of corporate officers and governance bodies
278
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participation in key Danone events as the embodiment of Danone's
culture, strategy and history for managers and particularly
new employees: speeches at the divisions' and subsidiaries'
conventions and at several training seminars, visits to industrial
sites, meetings with the management committees, hosting of
Chairman's Day (forward-looking discussions with employees
of various reporting levels from around the world), etc.;
•
regular dialog with General Management on variousmatters pro-
posed by it as part of the ongoing transfer process. For example,
the Chairman of the Board shared his insight and experience
with regard to certain projects and decisions taken by General
Management in such areas as organization and innovation.
As planned, this transition period should be completed in 2017, after
which time Mr. Franck RIBOUD will carry out his duties by exercising
the traditional rights of a Board Chairman.
The fixed compensation due to Mr. Emmanuel FABER in his ca-
pacity as Chief Executive Officer for 2015 was €1 million. It was
reviewed at the time of his appointment as Chief Executive Officer
in September 2014 and has not changed since that date (his com-
pensation as Deputy General Manager was constant since 2011).
This compensation takes into account both his experience and his
level of responsibility.
2015 annual variable compensation
Compensation target and annual cap set for 2015
The Board of Directors, at its meeting on February 22, 2016, at the
recommendation of the Nomination and Compensation Committee,
set the short-term variable compensation target to be paid in 2016
for fiscal year 2015, subject to performance conditions, at €1,240,000
for Mr. Emmanuel FABER.
Mr. Emmanuel FABER's short-term variable compensation target
for his duties as Chief Executive Officer in 2015 was €1 million.
At the recommendation of the Nomination and Compensation
Committee, his annual variable compensation for 2015 had been
capped by the Board of Directors at 200% of his fixed compensation.
As a reminder, since his appointment as Chairman of the Board of
Directors effective October 1, 2014, Mr. Franck RIBOUD no longer
receives annual variable compensation for his duties as Chairman
of the Board.
Review of the achievement of objectives and weightings
At its meeting on February 22, 2016, the Board of Directors, at the
recommendation of the Nomination and Compensation Committee,
determined the level of fulfillment for Emmanuel FABER's annual
variable compensation.
Regarding the quantitative economic portion, after validation of
the financial components by the Audit Committee, the Board of
Directors determined that the rate of attainment of this component
was 115% based on the achievement of the targets disclosed to the
market, namely 4.4% net sales growth on a like-for-like basis, a
17 basis points increase in trading operating margin on a like-for-
like basis and a free cash flow generation of €1,529 million without
exceptional items. Concerning net sales, the Board of Directors
found that its increase, while very solid in view of the market con-
text and the volatile economy of some countries, came out slightly
below the median of the guidance set between 4% and 5%. As for
the operating margin, the Board recognized the effectiveness of the
transformation initiatives aimed at structurally improving Danone's
growth model to achieve a better balance between profitability
and sales growth, while continuing to prioritize the investments
necessary for Danone's future development. In this respect, the
Board underscored better-than-expected performance, as for the
FCF, the significant increase in which demonstrates the solidity of
Danone's fundamentals in this area.
At this same meeting, the Board of Directors determined that the
rate of attainment of the social and societal component was 150% of
the target, particularly in light of the outstanding results achieved
in terms of the commitment of Danone's teams, as measured by a
recent anonymous opinion poll conducted by an independent firm
in which more than 82% of Danone's employees around the world
participated; the successful implementation of the “Campus for all”
training programs in Danone's key geographical areas; ongoing
improvement in work safety (further decrease of 14% in accident
frequency); and attainment of the main objectives related to the
definition and start of implementation of the Danone 2020 project,
such as sharing “Roadmap Danone 2020” with Danone's various
strategic stakeholders, defining the climate policy and finalizing
the new “Beyond Budget” process (rolling forecasts instead of the
traditional budget process). The Board of Directors also found that the
attainment rate of themanagerial component was 125%of the target,
particularly in light of the creation of the new Executive Committee
and its alignment with the strategic priorities, the commitment by
the 200 managers of Danone's subsidiaries and principal corporate
functions to support these priorities, and the attention given to the
achievement of Danone's 13 business priorities for 2015.