Remuneration in respect of the corporate office will in no event be taken into consideration in the calculation of all benefits that may be due under the employment contract described above.
The reference remuneration to be taken into account for all rights attached to the employment contract, in particular, for the calculation of the aforementioned pension scheme, will be based on the amount of remuneration at the date of suspension of the employment contract. This reference remuneration is revised annually by applying the revaluation coefficient in respect of salaries and pension contributions published by the French state pension fund (Caisse Nationale d’Assurance Vieillesse). The seniority applied will cover the entire career, including the years spent as a corporate officer. Information on the benefits that could be owed under the suspended employment contract are discussed in section 2.4.3.
The executive corporate officer is also considered in the same way as senior executives during the term of his corporate office, which allows him to continue to benefit from the additional social protection schemes and, in particular, from the defined contribution pension scheme, and the employee benefit and healthcare schemes applicable to the Company’s employees.
Remuneration that is consistent with the remuneration of the Company’s senior executives
The remuneration policy for the executive corporate officer is, where applicable, in line with the policy which was applied to them as senior executives.
Their level of remuneration as an executive corporate officer is set on the basis of the level of responsibilities they exercised in the Company at the time of their appointment.
The remuneration policy is based on the same foundations and instruments as those applied to the Company’s senior executives. The remuneration principles are therefore stable and durable.
The Board of Directors is informed every year of the Group’s Human Resources policy. The Board is in a position to verify the consistency between the remuneration of the executive corporate officer and procedures in place, particularly for the members of the Group’s Executive Committee, based on the work by the Human Resources and Remuneration Committee and the Nominations and Governance Committee.
Competitive remuneration in comparison to a coherent and stable reference panel
The remuneration of the executive corporate officer must be competitive in order to attract, motivate and retain the best talents in the Company’s top positions.
This remuneration is assessed as a whole, namely by taking into account all the components that make it up.
To assess the competitiveness of this remuneration, a coherent and stable reference panel is put in place, with the assistance of an external independent consulting firm.
The panel is made up of a range of leading global French and international companies that must operate on similar markets and are L’Oréal's direct competitors in the cosmetics sector, or operate on the wider consumer goods, luxury or pharmacy markets for all or a portion of their business activities.
This panel is re-examined each year by the Human Resources and Remuneration Committee to ensure that it continues to be relevant, it being specified that some companies making up the panel may be changed, based on proposals by an independent consultancy firm, particularly if there are changes to their business or structure.
Based on in-depth work by Mercer, the Committee noted that the current panel, which has remained the same since 2019, has gradually become less suitable for benchmarking the growth and development of L'Oréal's business. In September 2024, L'Oréal was positioned between the median and the 3rd quartile of the panel in terms of sales and number of employees, and above the 3rd quartile in terms of market capitalisation. In addition, this panel is heavily weighted towards fast-moving consumer goods companies, which means that a rebalancing is required in view of the changes in the Group’s sales and their breakdown between the Divisions (in particular the Dermatological Beauty Division and the L'Oréal Luxe Division).
The recommended changes to the benchmark panel put forward by the Human Resources and Remuneration Committee to the Board were based on proposals by the consultancy firm, Mercer, with a view to making the comparative analysis more consistent and relevant with regard to the changes in the Group's profile and strategy. In its search for new members of the benchmark panel, the Committee focused on companies with large brand portfolios in the pharmaceutical or luxury retail sectors, or with a strong brand identity. At the same time, it decided to keep the same number of companies in the panel as before, as well as the same geographic coverage as it considers this to be representative of the Group's international footprint while remaining predominantly European.
