Pursuant to Article L. 22-10-9 of the French Commercial Code, for the calculation of average and median remuneration, the scope used is that of L’Oréal SA, which comprises 6,447 employees as at 31 December 2024(1) (i.e., 40.9% of the L’Oréal workforce in France), 5,288 of whom are managers, 1,132 are supervisors and 27 are administrative staff and workers.
For reasons of comparability, and in accordance with the recommendations of AFEP(2), the number of employees selected for the calculation of average and median remuneration corresponds to a full-time equivalent workforce continuously present over 24 months, excluding corporate officers. Remuneration is calculated on the basis of all amounts paid and performance shares granted during the financial year in question.
The components of executive remuneration used in the calculation are:
The elements composing employee remuneration used in the calculation are:
The termination indemnities and supplementary pension scheme for which L’Oréal's corporate officers may be eligible, provided they are former senior executives of the company with more than 15 years of service, are not related to their positions as corporate officers, but could be due under the suspended employment contract.
Therefore, they are not subject to the approval of the Annual General Meeting of 29 April 2025 under the 16th resolution.
Shareholders approved the agreement suspending the executive corporate officer’s employment contract at the Annual General Meeting of 20 April 2021.
The AFEP-MEDEF Code, which L'Oréal uses as the corporate governance code of reference, recommends, but does not enforce, that companies should cease combining employment contracts with a corporate office.
L’Oréal’s Board of Directors has the same objective as this recommendation, which aims at avoiding benefits being simultaneously obtained from both the employment contract and the corporate office, and at preventing any interference with the removal of executive corporate officersad nutum. The Board of Directors has formally provided for application of the objectives of the recommendation, in a way that is adapted to the L’Oréal Groupe's situation.
The Board’s intention is to use the treatment set out below for any new corporate officer appointed who has over 15 years of service in the Group at the time of his or her appointment.
As L’Oréal’s ongoing policy is to appoint employees who have been very successful in the various stages of their careers in the Group as executive corporate officers, the Board does not want these executives to be deprived of the benefits to which they would have continued to be entitled had they remained employees, after spending many years of their career at L’Oréal.
The Board of Directors has considered that the objective of the AFEP-MEDEF Code's recommendations could be fully achieved by maintaining the suspension of the employment contract and clearly separating the benefits related to the corporate office from those relating to the employment contract.
Remuneration in respect of the corporate office will in no event be taken into consideration in the calculation of benefits that may be due under the employment contract.
The reference remuneration to be taken into account for all rights attached to the employment contract, in particular, for the calculation of the pension under the defined benefit scheme is 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 within the Group, including the years spent as an executive corporate officer.
