Pursuant to the criterion related to sales, in order for all the free shares granted to be fully vested by the beneficiaries at the end of the vesting period, L’Oréal must outperform the average growth in sales of the panel of competitors. If this is not achieved, the grant decreases. If L’Oréal’s comparable growth in sales is less than the average growth in sales of the panel of competitors over the period, no shares will be allocated for this criterion.
Pursuant to the criterion related to operating profit, in order for all the free shares granted to be fully vested by the beneficiaries at the end of the vesting period, a level of growth defined by the Board of Directors, but not made public for confidentiality reasons, must be achieved or exceeded. If this is not achieved, the grant decreases. If the operating profit does not increase in absolute value over the period, no shares will fully vest pursuant to this criterion.
Pursuant to the criterion related to the achievement of the L’Oréal for the Future Commitments, in order for all the free shares granted to be fully vested by the beneficiaries at the end of the vesting period, the L’Oréal for the Future Commitments have to be met at a certain level, as defined by the Board of Directors and made public, on average over the course of the vesting period. If this is not achieved, the grant decreases. No shares will fully vest under this criterion if the average level of achievement of the L’Oréal for the Future Commitments falls below the minimum level defined by the Board of Directors and made public.
With regard to the criterion of gender balance in strategic positions, including the Executive Committee, 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 decreases. 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.
These performance conditions will apply, for all individual grants greater than 100 free shares per plan, to all shares above the hundredth share, with the exception of grants to the corporate officers and members of the Executive Committee, for which they will apply in total. The free grant of shares may be carried out for all Group employees without performance conditions, or for shares allocated on the basis of cash subscriptions carried out as part of an increase in share capital reserved for Group employees.
The Board of Directors will be able to settle vesting and holding periods which are longer than the minimum periods set above. This mechanism for the conditional grant of shares complies with the AFEP-MEDEF Code.
Any allocations of shares to the corporate officers will be decided by the Board of Directors on the basis of the proposals of the Human Resources and Remuneration Committee after assessment of their performance. The corporate officers of L’Oréal will be required to hold 50% of their fully vested shares in registered form until they cease to hold office.
On the basis of the proposals made by the General Management and examined by the Human Resources and Remuneration Committee, the Board of Directors decided, at its meeting on 10 October 2024, to make a Conditional Grant of Shares within the scope of the authorisation granted by the Annual General Meeting on 23 April 2024.
The share capital at 10 October 2024 comprised 534,725,475 shares, and 3,208,352 shares could therefore be issued.
The Board of Directors used this authorisation at its meeting of 10 October 2024 by granting 700,000 shares to 2,742 beneficiaries. This is a free grant of shares to be issued.
Vesting of the shares is subject to a dual condition:
Non-financial criteria represent 20% of performance conditions and are based on:
The calculation will be made on the basis of the arithmetic average of the performances for financial years 2025, 2026 and 2027.
Pursuant to the criterion relating to net sales, in order for all the free shares granted to be fully vested by the beneficiaries 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 decreases. If L’Oréal’s comparable growth in net sales is less than the average growth in net sales of the panel of competitors over the period, no shares will be allocated for this criterion. The Board of Directors defines a threshold, not made public for confidentiality reasons, below which no shares will fully vest pursuant to this criterion.
