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DANONE
REGISTRATION DOCUMENT 2015
Corporate Governance
6.3 Compensation and benefits of corporate officers and governance bodies
254
(iii) a managerial portion, calculated with reference to objectives
linked to the development of Danone's business (product innovation,
market share, expansion into new geographic areas and implemen-
tation of strategic priorities), representing 20% of the target, which
may vary by 0% to 40%, made up, for 2015, of the following elements:
•
for 10%of the target:management of Danone'smanagement teams;
•
for 10% of the target: achievement of the Executive Committee's
priorities for 2015, with the same variation.
The cap for each of these portions has been set at 200%, which
means that the maximum amount of Emmanuel FABER's short-
term annual variable compensation for 2015 is equal to 200% of his
fixed compensation, with no guaranteed minimum or lower limit.
As a reminder, Franck RIBOUD no longer receives annual variable
compensation for his duties as Chairman of the Board of Directors
since being appointed to that position effective October 1, 2014.
Annual variable compensation conditions for Executive
Committee members
For the Executive Committee members, including members who
manage each of Danone's Divisions, annual variable compensation
consists of the following based on the same criteria:
(i) an economic variable portion calculated with reference to the
objectives communicated to the financial markets and/or set in
the annual budget of the relevant Division (e.g. in terms of sales,
Trading operating margin and free cash flow);
(ii) a social variable portion calculated with reference to the social
objectives of Danone or the relevant Division (such as work safety,
employee training, skills development, environmental parameters
and societal initiatives); and
(iii) amanagerial variable portion calculated with reference to objec-
tives linked to the development of Danone's business or that of the
relevant Division (product innovation, market share, expansion into
new geographic areas and implementation of strategic priorities).
The cap for each of these portions is also set at a maximum of 200%,
with no guaranteed minimum or lower limit.
Annual variable compensation conditions for other senior
executives
The annual variable compensation scheme applicable to the corporate
officers and Executive Committee members applies in the same
way to all 1,300 Danone senior executives worldwide, particularly
as regards the various criteria and their weighting.
Principles applicable to multi-annual variable compensation of executives
Multi-annual variable compensation consists of Group performance
units paid subject to multi-annual performance conditions over a
three-year period.
Group performance units (GPU) were introduced in 2005 to more
closely align the compensation of the corporate officers, the Executive
Committee members and the 1,300 senior executives with Danone's
overall medium-term operational and economic performance.
Group performance units are granted each year, upon the deci-
sion of the Board of Directors and at the recommendation of the
Nomination and Compensation Committee, for a three-year period.
The Board of Directors, upon the recommendation of the Nomination
and Compensation Committee, sets the performance objective(s)
for the next calendar year and afterwards examines the potential
achievement of the previous year's objective(s) for each Group per-
formance unit plan. The annual objectives for Group performance
units currently in the process of vesting (Group performance units
granted in 2013, 2014 and 2015) are detailed hereafter in the
Group
performance units, Annual objectives
section.
Performance objectives of Group performance
units
The objective(s) of Group performance units is/are determined, for
each fiscal year, by the Board of Directors based on the recommen-
dations of the Nomination and Compensation Committee. They are
based on performance conditions in line with Danone's objectives,
as communicated to the financial markets at the beginning of the
year (see the list hereafter in the
Group performance units, Annual
objectives
section). These objectives are the same for all beneficiaries
of Group performance units.
Consequences of a change of control for
a beneficiary
If a person or group of persons acting in concert (within the meaning
of Article L. 233-10 of the French commercial code) were to acquire
control of Danone (within the meaning of Article L. 233-3 of the
French commercial code), the performance objectives relating to the
year in which the change of control occurred would be considered
achieved and a payment would become due for all outstanding Group
performance unit plans in themonth following the change of control.
Consequences of the death, voluntary or
non‑voluntary retirement of a beneficiary
The continuous employment condition and the performance condition
are partially waived in case of death, voluntary or non-voluntary
retirement of a beneficiary.
For the corporate officers, in case of departure before the expiration
of the term set for the assessment of performance criteria, the pay-
ment of multi-annual variable compensation is canceled, except in
exceptional circumstances justified by the Board. Therefore, in case
of the voluntary or non-voluntary retirement of a corporate officer:
(i) he/she loses all rights to the Group performance units granted
to him during the 12 months preceding his/her departure;
(ii) the Group performance units granted earlier are (a) considered
vested by said beneficiary and the three-year continuous employment
condition does not apply, and (b) valued as of the date of the event
based on the following rules:
•
the calendar year(s) for which the accounts were approved by
the Board of Directors are valued based on the achievement of
objectives; and
•
the current or future calendar year(s) is/are deemed to have
no value.
Value of Group performance units
Each GPU has a maximum value of €30, i.e. maximum €10 per
reference year, based on the achievement of objectives determined
by the Board. For outstanding Group performance units, the year
2013 was valued at €0, the year 2014 was valued at €7 and the year
2015 was valued at €9. The valuation of existing GPUs is detailed
hereafter in the
Group performance units, Annual objectives
section
.