Remuneration Information • Jul 11, 2017
Remuneration Information
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Clermont-Ferrand, July 11, 2017
Jean-Dominique Senard's compensation package was determined by the Supervisory Board in application of the compensation policy presented at the Annual Shareholders Meeting of May 19, 2017 and available on the Michelin website: www.michelin.com.
At the request of SAGES, CGEM's Non-Managing General Partner, the Supervisory Board of CGEM submitted to the General Partners a set of performance criteria to be applied to determine the variable compensation of Jean-Dominique Senard, Chief Executive Officer and Managing General Partner, for 2017. These criteria were recommended by the Compensation and Appointments Committee and agreed to by the General Partners.
As in prior years, the basis of Mr. Senard's variable compensation has been set at 0.6% of the Group's consolidated net income (the "Consolidated Base"), in accordance with the provisions of the Company's bylaws.
The extent to which he meets these criteria, which all concern Group performance objectives, will be analyzed by the Compensation and Appointments Committee, which will submit a report and a recommendation to the Supervisory Board. After reviewing this information, the Supervisory Board will submit its recommendation to the General Partners.
As in 2016, the components of Jean-Dominique Senard's variable compensation will be paid out of the share of profit allocated to CGEM's two General Partners.
No new agreement or commitment has been entered into between CGEM and Jean-Dominique Senard concerning his compensation.
This component corresponds to 8% of the Consolidated Base, unchanged from 2016.
This component corresponds to between 0% and 14% of the Consolidated Base, unchanged from 2016 and determined based on achievement rates for five criteria.
It will only be payable if the cumulative achievement rate for the five criteria represents at least 50/150ths.
Mr. Senard will be awarded the maximum 14% of the Consolidated Base if the cumulative achievement rate for the five criteria is 150/150ths.
The five criteria are as follows:
The long-term incentive bonus, similar to that of 2016, will be calculated on a base amount of €1,800,000, as increased or reduced to reflect the percentage gain or loss in Michelin's share price over the three years 2017-2019.
The results of this adjustment will be modulated by the result, over the three years 2017-2019, of criteria set by the Supervisory Board which are also applicable to performance share grants for Group employees. The criteria are: Michelin's comparative stock market performance, the environmental performance of manufacturing operations, employee engagement and growth in operating income.
These criteria are described in detail in the compensation policy available for consultation on the Michelin website: www.michelin.com.
The maximum cumulative achievement rate for these criteria is 100%. The final amount receivable will be capped at 150% of the average of the annual variable compensation paid to Mr. Senard for 2017, 2018 and 2019.
In addition, Jean-Dominique Senard has undertaken to invest in Michelin shares 20% of the actual long-term incentive bonus received at the end of the three-year period and to retain these shares for as long as he remains in office, after which the shares may be sold on a phased basis over three years.
The other components of Mr. Senard's 2017 annual compensation package are as follows:
Gross annual fixed compensation to be received from Manufacture Française des Pneumatiques Michelin (MFPM) for his duties as MFPM's Managing Partner. This compensation amounts to €1,100,000 for 2017, unchanged from 2014.
The share of profit of Compagnie Financière du Groupe Michelin (CFM) allocated to him in his capacity as CFM's Managing General Partner and calculated on the basis of CFM's income for the year.
The other components of Jean-Dominique Senard's compensation package (compensation for loss of office, consideration for non-compete clause, supplementary pension benefits), presented at the Annual Shareholders Meeting of May 19, 2017, are unchanged compared with 2016. As was the case in 2016, he was not granted any stock options or performance shares in 2017.
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This press release is not an offer to purchase or a solicitation to recommend the purchase of Michelin shares. To obtain more detailed information on Michelin, please consult the documents filed in France with Autorité des Marchés Financiers, which are also available from the www.michelin.com/eng website.
This press release may contain a number of forward-looking statements. Although the Company believes that these statements are based on reasonable assumptions as at the time of publishing this document, they are by nature subject to risks and contingencies liable to translate into a difference between actual data and the forecasts made or inferred by these statements.
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