4 _247 2023 UNIVERSAL REGISTRATION DOCUMENT_MICHELIN 4 NON-FINANCIAL STATEMENT Sustainable Development Report A significant portion of their annual compensation involves a long-term incentive in the form of performance share rights, 40% of whose vesting criteria are based on the Group’s CSR performance. The number of rights granted to each member depends on his or her: ▪ level of responsibility; ▪ country of posting (or of origin in the case of expatriates); ▪ individual performance against objectives, including managerial performance (I CARE model). The performance condition is based on three closely related criteria reflecting different aspects of Michelin’s People, Profit and Planet strategy, which are presented in detail in Chapter 6 of the Universal Registration Document, Investor relations (see section 6.5.4 Share grants and performance shares). If all the performance criteria were fully met, these rights, when granted, would represent no less than 20% of the fixed compensation of these employees. The GOS members’ short-term incentive, or Michelin Bonus, comprises two components: ● the Group Bonus, 20% of which is based on CSR criteria (TCIR and Scopes 1 and 2 carbon emissions); ● the Team Bonus, which depends on each member’s choice of shared objectives. At least 20% of the amount depends on a CSR criterion, since every member has the objective of increasing the proportion of women in senior management to 20%. Compensation for the Managers is described in section 3.3.2 Compensation policy: the Managers. Guaranteeing a living wage for all employees In 2020, Michelin worked with independent expert Fair Wage Network to develop a methodology to analyze employee compensation in the Group. Since 2021, it has been committed to guaranteeing that all employees are paid a living wage, i.e., compensation that is high enough to support a decent standard of living by enabling employees and their families to pay for food, housing, education, healthcare and other basic needs. The system is based on the living wage benchmarks defined by the Fair Wage Network for a family of four, comprising two adults and two children. In 2023, a review of Group compensation(1) found that all employees are paid at least the equivalent of the living wage benchmarks defined by the Fair Wage Network. Also during the year, the process of earning Fair Wage Network certification was undertaken, resulting in the award of Living Wage Global Employer certification for all Group companies(1) around the world. Offering a variety of supplementary compensation Depending on the country and local labor market practices, employees may be offered various forms of supplementary compensation. In France, for example, the 2023-2024 discretionary profit-sharing agreement renegotiated with the trade unions is structured in two tiers: ● the first defines the profit-sharing framework applicable by each company; ● the second defines specific profit-sharing criteria for each plant or office, such as achieving production targets, reducing energy consumption and ensuring product quality. These profit-shares, which are paid in the first quarter of the following year, can amount to up to 8% of an employee’s salary. Employee benefit policies reflecting Michelin’s social responsibility Employee benefit policies are designed to support all employees and their families at important moments in their lives. In 2021, Michelin defined the Michelin One Care Program, a package of basic social protection benefits to which every employee is entitled. Roll-out of this program began in 2022, for scheduled completion in 2025. Michelin One Care reflects the Group’s commitment to supplementing national systems to: ● give every employee time to welcome a new child into the family; ● protect employees’ families financially in the event of death; ● facilitate healthcare for employees and their families. This universal floor is supplemented by the enhanced, diverse array of tailored employee benefit policies offered by each Group company, which are regularly updated in response to social changes, local legislation and the economic environment. (1) The 2023 campaign surveyed 100% of Group companies, representing 100% of Group employees, except for companies either acquired in 2023 (plus the four RLU companies) or in the process of being sold.
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