3 _115 2023 UNIVERSAL REGISTRATION DOCUMENT_MICHELIN 3 CORPORATE GOVERNANCE REPORT Management and Supervisory Board compensation policies for 2024 The 2024 compensation policy is the subject of two proposed resolutions to be presented at the Ordinary Shareholders Meeting to be called to approve the 2023 financial statements: ● the 6th resolution concerning the policy applicable to the Managers, presented in section 3.3.2 below; ● the 7th resolution concerning the policy applicable to the members of the Supervisory Board, presented in section 3.3.3 below. 3.3.2 Compensation policy: the Managers This section describes the components of the compensation policy for the Managers. These components are presented in a proposed ordinary resolution approved by the General Partners and submitted for shareholder approval at the Ordinary Shareholders Meeting to be called to approve the 2023 financial statements (6th resolution). 3.3.2.1 Principles for determining compensation The compensation of the Managing Chairman and General Partner is decided by the General Partners and is the subject of a deliberation by the Supervisory Board. Then: ● the annual variable compensation is deducted from the General Partners' Profit Share, as explained in section 3.3.2.3 below; ● the long-term variable compensation is awarded in the form of performance shares; ● the fixed compensation is paid by a subsidiary of the Company in exchange for his services as Chairman of that company. The fixed and variable annual compensation of the General Manager and his long-term variable compensation (performance shares) are decided by the General Partners and are the subject of decisions by the Supervisory Board. The Compensation and Appointments Committee also reviews all amounts and benefits due, awarded or to be awarded to the Managers for the previous year by Group companies. As part of the review, the Committee particularly verifies that the amounts paid or awarded to the Managers are proportionate and consistent in terms of (i) the Group's performance and (ii) industry and market practice. 3.3.2.2 Fixed compensation In 2024: ● the annual fixed compensation of Florent Menegaux, Managing Chairman and General Partner, amounts to €1,100,000.00; ● the annual fixed compensation of Yves Chapot, General Manager, amounts to €770,000.00. These amounts will remain unchanged until 2026, when their current terms expire. 3.3.2.3 Annual and long-term variable compensation Shared principles To align Managers' interests more closely with the Company's performance and encourage them to act with its long-term interests in mind, their variable compensation includes an annual portion and a long-term portion, both of which are subject to performance conditions. This structure means that the Managers' variable compensation fluctuates partly in line with net income for the year and partly on the basis of several additional performance conditions related to factors that are essential for the deployment of Michelin's strategy to deliver sustainable growth. The level and terms of the Managers' compensation take into account the positions of Managing Chairman and Managing General Partner, as well as the difference in status between a Managing General Partner and a General Manager. Annual variable compensation Florent Menegaux, Managing Chairman and General Partner In light of the General Partners' unlimited joint and personal liability for the Company's debts, the General Partners are entitled to a share of annual profit (the “Profit Share”) determined on the basis defined in the Company's Bylaws. This means that their interests are fully aligned with those of the shareholders, as they are paid Profit Shares only if the Company makes a profit(1). (1) Substantially all of the Profit Share received by SAGES, Non-Managing General Partner, is credited to the contingency reserve set up in application of its Bylaws.
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