CORPORATE GOVERNANCE orientations, major commercial developments and level of achievements targeted and the achieved projects, organization and management actions performance are disclosed in a precisely manner (the non-financial portion represents 25% of the ex-post in the Registration document (this ex-post target annual variable compensation). disclosure is justified by the willingness to preserve The criteria and the expected level of achievement the Rexel Group interests without disclosing ex-ante are clearly determined on an annual basis by the any sensitive indication on its long term strategy in a Board of Directors. The financial criteria are disclosed highly competitive environment). at the start of the financial year. The expected level These shares are also allocated subject to presence of achievement and the performance reached criteria of 3 years. are disclosed in a precisely manner ex-post in the The Chief Executive Officer has a retention obligation Registration document. This ex-post disclosure is of at least 20% of the shares vested under these justified by the willingness to preserve the Rexel Group mechanisms until the end of his functions. interests without disclosing ex-ante any indication on its long term strategy which could be used by its Furthermore, a limit was introduced during 2015 competitors. In respect of non-financial criteria, they concerning corporate officers, aiming at ensuring are also described in a way to preserve the Rexel a balance between their various components of Group interests in a highly competitive environment. compensation. Thus, the annual value of the 3 Their achievement rate is specified ex-post. performance shares allocated in respect of a given financial year to the Chief Executive Officer, cannot In accordance with the provisions of Article L.225- exceed 100% of his annual fixed and variable target 100 of the French Commercial Code, the payment of compensation for the relevant financial year. the variable compensation is subject to the approval of the ordinary and extraordinary shareholders An additional limit also provides that the number of meeting. shares allocated to corporate officers cannot exceed 10% of the aggregate amount of performance shares These criteria are detai led in paragraph 3.2.2.7 allocated to all of the beneficiaries.(2) “Compensation items and performance criteria summary tables for the 2018 financial year” of this The rules for the performance shares plans provide Registration document. for the loss of unvested shares in case of departure from the Group (excluding any retirement leave or death or disability). 3.2.2.4 Long-term variable compensation In accordance with the insider trading pol icy In order to involve the senior executives in the Goup’s determined by the Board of Directors and with development and performance and to align their the Afep-Medef Code, beneficiaries must formerly interests with those of the shareholders, the Board undertake not to use any hedging mechanisms of Directors may grant performance shares. in respect of the stock options and performance The Chief Executive Officer is eligible for the annual shares received from the Company. performance shares plan, which is the historical The criteria are detai led in paragraph 3.2.2.7 mechanism used to motivate and retain employees “Compensation items and performance criteria and top managers of the Group. (1) summary tables for the 2018 financial year” of this The shares allotted to the Chief Executive Officer are Registration document. fully subject to performance criteria and conditions assessed over minimum periods of 3 years. 3.2.2.5 Other compensation items The performance criteria are: average EBITA growth Former supplemental retirement scheme and (30%) and organic sales growth (30%), average free new medium-term collective savings scheme cash flow before interest and taxes/EBITDA ratio Supplemental retirement plan (20%) and the Rexel share performance compared The Board of Directors of February 10, 2016 has to the SBF 120 GR index (20%). decided to close the supplemental defined-benefit As previously indicated regarding the annual variable retirement scheme (known as “Article 39”), within compensation, the nature of the financial criteria, their the meaning of article L.137-11 of the French Social weight and their level of achievements targeted are security Code. This regime, set up on March 30, clearly defined by the Board of Directors at the time 2009 and effective as of July 1, 2009. of the al location on the basis of the Medium Term The Board of Directors had considered, on Plan (Plan Moyen Terme) of Rexel. The expected February 10, 2016, in particular, that this scheme was (1)A resolution is submitted to the shareholders meeting of May 24, 2018, inter alia for the 2018 Plan. (2) i.e., a maximum of 0.14% of the share capital over a time period of 26 months, following the adoption of the resolution submitted to the shareholders meeting of May 24, 2018 which provides for a maximum of 1.4%. REXEL 2017 – REGISTRATION DOCUMENT 89