_246 2023 UNIVERSAL REGISTRATION DOCUMENT_MICHELIN 4 NON-FINANCIAL STATEMENT Sustainable Development Report Encouraging employees to submit Progress Ideas First introduced in 1927, Michelin’s pioneering participatory innovation process, known as Progress Ideas, offers every employee the opportunity, spontaneously and at any time, to act as an agent of continuous improvement across the Group by suggesting solutions to improve a situation or solve a problem, thereby contributing to the innovation dynamic. Managers are expected to encourage their team members to submit these ideas and then make them a reality. The results attest to the success of the Progress Idea system in the Group, with more than 19,000 employees submitting at least one idea in 2023, or 27% of the workforce that had access to the process. Of the total 38,116 ideas received in 2023, more than 16,145 were implemented during the year, delivering improvements in areas of special interest to the Group, such as safety, quality, working conditions, cost savings, diversity and the environment. Encouraging intrapreneurship In the Innovation and Partnerships Department, the Michelin Innovation Lab incubator offers a supportive environment, open to the outside world, to any Group employee seeking to explore new businesses around and beyond tires that could make a lasting contribution to society in the future. Launched in 2014, the intrapreunarial program is now open to all employees in Europe, North America, China and India. In 2023, it supported more than 100 ideas submitted from across the organization. Over 20 are currently in the incubation stage, with objectives and a budget, with a view to becoming new business activities. The MIL also supports employee skills development through coaching programs that encourage personal empowerment, risktaking (and therefore the possibility of failure), innovative thinking and unlimited curiosity. 4.1.2.3 h) Offering fair compensation and benefits Compensation, payroll taxes and other employee benefits Employee benefits expense amounted to €7,401 million in 2023. Total employee benefits expense in 2023 (in € millions) Production operators Administrative employees and technicians Management staff Provisions and provision reversals for pension obligations Taxes and provisions Group 7,401 2,850 2,656 1,449 16 428 For the entire Group, the allocation of employee benefit costs by function (wages and salaries, payroll taxes, etc.) is presented in note 7 “Employee benefit costs” in section 5.2 Consolidated financial statements for the year ended December 31, 2023. Ensuring that compensation reflects each employee’s performance and level of responsibility Michelin is committed to offering every employee compensation that is personalized, fair and market-competitive, and that reflects their individual performance and level of responsibility. Compensation policies are implemented with a long-term view, taking into account each person’s professional development, so as to enable people to advance according to their aspirations and abilities and the needs of the Group. Compensation is also carefully aligned with evolving market conditions and local practices. In every host country, compensation is competitively set and raised with a constant eye on achieving the right balance between employee satisfaction and financial performance. The Group’s variable compensation policy is designed to: ● enhance its ability to attract and retain talented employees in every host country; ● empower and incentivize everyone to meet our growth challenges; ● encourage collaborative working methods; ● give everyone a stake in the Group’s earnings and share created value more equitably. Variable compensation comprises three bonuses: ● a Group Bonus tied to how well the Group meets its People, Profit and Planet objectives, which is granted to every Group employee regardless of job position, business line, level of responsibility or country; ● a Team Bonus, based on shared objectives and indexed to the Group’s financial results, which rewards collaborative work practices and the alignment of everyone’s job performance with Group priorities (does not apply to sales forces and production operators); ● a Special Bonus for sales forces and production operators. Integrating CSR performance criteria into the compensation of the Group’s 100 most senior executives Tasked with helping to define Group strategy and its execution, the Strategic Operations Group (GOS) comprises the Group’s 100 most senior executives, including the Managers, the members of the Group Executive Committee (CEG) and the members of the Group Management Committee (CDG).
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