CORPORATE GOVERNANCE 3.2.2.1 Main principles This fixed annual compensation is determined by The main principles of the compensation pol icy the Board of Directors at the beginning and for the are set by the Board of Directors fol lowing the whole term of office of the Chairman of the Board of recommendation of the Compensation Committee. Directors and of the Chief Executive Officer. In accordance with the corporate governance The amount of the annual fixed compensation is structure in place, the corporate officers are: determined according to criteria specific to each the Chairman of the Board of Directors (non- person (experience, seniority, responsibil ities, in • particular) and criteria based on the sector’s business executive corporate officer); activity and the general economic environment (in •the Chief Executive Officer (executive corporate addition to the above-mentioned market studies). officer). The Board of Directors intends to position the fixed The compensation policy determined by the Board annual compensation of the corporate officers at the of Directors for non-executive corporate officers median of the reference market and to offer the Chief (the Chairman of the Board of Directors) aims at Executive Officer more dynamic short-term target attracting and retaining corporate officers who are variable compensation and long-term target variable in charge of developing a working relationship with compensation, both of which are integrally subject the Directors and increasing the strategic scenarios to demanding performance conditions. The board that bring a support of the shareholders to the reviews the balance between these components. company and vice versa. The compensation policy determined by the Board 3.2.2.3 Short-term variable compensation of Directors for executive corporate officers (the The Chief Executive Officer qual ifies to receive Chief Executive Officer) aims at attracting, retaining variable annual compensation. and motivating executives who wil l develop the Group’s performance and competitiveness in the The annual target variable compensation, defined medium- and long-term, in accordance with defined as a percentage of the fixed compensation is also strategy, by al igning their interest with the best determined for the term of office. interest of the group and that of the shareholders. This This variable compensation is set in order to compensation is determined by taking into account correlate the compensation of the Chief Executive market practice, the executives’ performance as Officer with the results of the business of the Rexel well as the other stakeholders in the company. This Group. The variable compensation is calculated policy is in line with the policy applicable to other on the basis of the achievement of criteria relative managers of the Group. to the performance of the Rexel Group and to the In order to achieve these objectives efficiently, the individual performance. Board of Directors determines on an exhaustive basis The Board of Directors aims at setting the target and with proportionality the various components of short-term variable compensation above the market the compensation of corporate officers. In order to median and to making it fully subject to challenging assess the competitiveness of the compensation performance criteria. of corporate officers, the Board of Directors uses studies carried out by an independent consulting The criteria determined by the Board of Directors to firm (Willis Towers Watson); the benchmark includes assess the performance of the variable compensation a panel of French and European companies of are: similar industries and size in terms of sales, number •on the one hand, financial criteria (quantifiable of employees and market capitalization. criteria) determined in respect of and on the basis of the financial performance of Rexel and of 3.2.2.2 Fixed compensation the indicators that it uses in connection with the analysis of its financial performance (the financial The compensation pol icy of corporate officers portion representing 75% of the target annual determined by the Board of Directors provides for variable compensation). These criteria are sales the al location of an annual fixed compensation to growth in volume (33.33%), adjusted EBITA in the Chairman of the Board of Directors and to the volume (33.33%) and ATWC (33.33%); and Chief Executive Officer. on the other hand, non-financial criteria (qualitative • This compensation policy provides that the Chairman and/or quantifiable criteria) related in particular to of the Board of Directors benefits of a fixed annual strategic, business and managerial chal lenges compensation, excluding any other compensation that are particular to the financial year to come: component. regarding the implementation of strategic REXEL 2017 – REGISTRATION DOCUMENT 88