DETAILS OF NON-FINANCIAL CRITERIA LINKED TO THE PROGRESS OF THE L’ORÉAL FOR THE FUTURE PROGRAMME USED TO ASSESS THE PERFORMANCE OF THE EXECUTIVE CORPORATE OFFICER
Fighting climate change
By 2025, 100% of the energy used by operated sites(1), including stores(2), will be renewable.
Managing water sustainably
By 2030, 100% of water used in the Group’s manufacturing processes will be recycled and reused.
Respecting biodiversity
By 2030, 100% of ingredients in the Group’s formulas and biobased packaging materials will be traceable and come from sustainable sources.
Preserving natural resources
By 2030, 50% decrease in virgin plastic used in the Group's primary and secondary packaging, compared with 2019.
Empowering our ecosystem in our transformation
By 2030, 100,000 people from underprivileged communities helped to find employment.
Performance share grants
Since 2009, the Board of Directors has granted performance shares to employees of the Group and, since 2012, also to its executive corporate officer, under Articles L. 225-197-1 et seq., L. 22-10-59, L. 22-10-60 and L. 22‑10-8 of the French Commercial Code and the authorisations granted by the Annual General Meeting.
These grants are linked to performance and their aim is to encourage achievement of the Group’s long-term objectives and the resulting value creation for shareholders. Consequently, vesting is subject to performance conditions which are recorded at the end of a vesting period of four years from the grant date.
50% of the performance shares granted to the Chief Executive Officer, with a four-year vesting period, are subject to a further holding period of two years. This holding period still applies in the case where the beneficiary ceases to be Chief Executive Officer before the end of the holding period. If the beneficiary continues to exercise his function as Chief Executive Officer beyond the end of the holding period, he will be required to hold his shares in a nominative account until the termination of his duties in accordance with section (II) of article L.225-197-1 of the French Commercial Code.
The value of these shares, estimated at the grant date in accordance with IFRS as applied for the preparation of the consolidated financial statements, represents approximately 50% of the executive corporate officer’s annual remuneration and may not exceed 60%.
The Board of Directors reserves the possibility to decide on an additional grant if a particular event justifies it. Any such additional grants to the Chief Executive Officer, for which the Board of Directors must give good reasons, may not exceed a total annual ceiling (taking into account any grants already awarded during the year). In view of observations by the Company's main investors and by proxy advisory firms, on the recommendation of the Human Resources and Remuneration Committee, the Board decided to reduce the ceiling on these potential additional share grants to 3% of the total number of shares granted during a given financial year, taking into account any grants already awarded (instead of 5% previously).
The executive corporate officer formally undertakes not to enter into any risk hedging transactions with regard to the performance shares until the end of the holding period set by the Board of Directors.
An executive corporate officer may not be granted performance shares at the time of his or her departure.
Performance conditions
The performance criteria cover all shares granted to the executive corporate officer.
They take into account:
