2024 universal registration document

2. Corporate governance

Qualitative criteria: Image, Company reputation, Dialogue with stakeholders Weighting 7.5%

Qualitative criteria: Image, Company reputation, Dialogue with stakeholders
  • Ethics
    • L’Oréal was recognised for the 15th time as one of the "World’s Most Ethical Companies" by the Ethisphere Institute.
    • Record turnout for the Ethics Day, with 35,000 participants worldwide.
    • Partnership with the Egyptian government, Fair Labor Association, International Labour Organization and industrial market players in the "Harvesting the Future Jasmine in Egypt" project to combat child labour and work towards fair remuneration.
  • Essentiality of beauty

    • Launch of the "This is not a beauty podcast" podcast in partnership with The New York Times.

  • Highlighting the L’Oréal Groupe’s French roots
    • Visit to the Rambouillet plant by the Prime Minister.
    • The Group’s participation in European Heritage Days. with many L’Oréal sites in France opening to the public.
  • Reputation and image of the Group and its teams with stakeholders:
    • The seventh edition of L’Oréal Paris’ “Walk your Worth” défilé took place at the Place de l’Opéra in Paris, marking the opening of Paris Fashion Week.
    • Keynote address on the theme of Progress at BIG, Europe's largest business event.
    • Barbara Lavernos included in the Next 40 Women ranking.
    • First participation of Ezgi Barcenas in Climate Week NYC as the Group's Chief Corporate Responsibility Officer.
2.4.2.2.3 Granting of performance shares

Pursuant in particular to Articles L. 225-197-1 and L. 22-10-8 of the French Commercial Code and the authorisation of the Annual General Meeting of 23 April 2024, the Board of Directors meeting on 10 October 2024, taking into account the performance of Nicolas Hieronimus and the share price valuation, decided to grant him 16,000 performance shares (ACAs – Attributions Conditionnelles d’Actions, existing conditional grants of shares), in accordance with the remuneration policy. Based on the IFRS used to prepare the consolidated financial statements, the estimated fair value of one performance share (ACAs) for the 10 October 2024 plan, which is applicable to Nicolas Hieronimus, is €358.49.

The estimated fair value, based on IFRS valuations, of the 16,000 performance shares (ACAs) granted in 2024 to Nicolas Hieronimus is therefore €5,735,840.

These shares will only vest, in whole or in part, once the performance conditions described below are met(1).

Performance conditions

Full vesting of these shares is subject to achievement of performance conditions which will be recorded at the end of a four-year vesting period as from the grant date.

The number of fully vested shares will depend on (i) growth in comparable cosmetics sales compared to the growth of a panel of competitors, which consists in 2024 of Unilever, Procter & Gamble, Estée Lauder, Shiseido, Beiersdorf, Kenvue, Henkel, LVMH, Kao, and Coty (for 40%); (ii) on the growth in the Group’s consolidated operating profit (for 40%); (iii) on the achievement of environmental and social responsibility commitments made by the Group as part of the L’Oréal for the Future programme (for 15%) and (iv) on a gender balance target in strategic positions including the Executive Committee (for 5%).

The calculation will be based on the arithmetical average for the three full financial years of the vesting period. The first full year taken into account for assessment of the performance conditions relating to this grant is 2025.

With regard to the sales criterion, in order for all the free shares granted to fully vest at the end of the vesting period, L'Oréal must outperform the average growth in net sales of the panel of competitors. If this is not achieved, the grant is reduced. If L’Oréal’s comparable growth in net sales is lower than the average growth in net sales of the panel of competitors, no shares will be fully vested under this criterion.

With regard to the criterion relating to operating profit, in order for all the free shares granted to fully vest at the end of the vesting period, a level of growth defined by the Board but not made public for confidentiality reasons, must be achieved or exceeded. If this is not achieved, the grant is reduced. If the operating profit does not increase in absolute value over the period, no shares will fully vest in relation to this criterion.

With regard to the criterion of fulfilling commitments made under the L’Oréal for the Future programme, in order for all the free shares granted to be fully vested by the beneficiaries at the end of the vesting period, an average of 79% of the L’Oréal for the Future Commitments must be achieved during the vesting period. If this is not achieved, the grant is reduced. No shares will vest if the average level of achievement for the L’Oréal for the Future Commitments falls below 66%.

With regard to the criterion of gender balance in strategic positions, in order for all the free shares granted to be fully vested by the beneficiaries at the end of the vesting period, the average proportion of employees of each gender in strategic positions must be at least 40%. If this is not achieved, the grant is reduced. No shares will vest in relation to this criterion if the average representation of one of the genders is below 35% over the vesting period.

The figures recorded year on year to determine performance levels are published in chapter 7.