CORPORATE GOVERNANCE no longer adapted to the profiles of the top managers the compensation effectively received and capped. of the Group (more international profiles, joining the This defined contribution is subject to social security Group in the middle of their career). Furthermore, the charges and income tax for the beneficiary. This legislation relating to these schemes has continually defined contribution is paid by Rexel partly on mid- changed in recent years, making the system unstable term investment vehicle (such as life insurance), and and substantially limiting the attractiveness of these partly in cash in order to allow the beneficiary to pay schemes for companies, in particular due to the for taxes and social charges due in respect of all of increase in social contributions and charges. the contribution. Medium-term collective savings scheme The Board of Directors has considered that this type The Board of Directors wished to put in place, as of of scheme was more adapted and attractive for 2016, a scheme allowing executives to progressively executives of the Group than other schemes such as bui ld up medium-term savings.This scheme supplemental retirement schemes. provides for the payment of an annual contribution The main characteristics of this scheme are as at the benefit of the executive, in proportion with follows: OBJECTIVE AND LINK WITH THE STRATEGY APPLICATION MAXIMUM POTENTIAL VALUE PERFORMANCE METRICS New medium-term To offer an appropriate The annual contribution is equal to: The contribution is collective savings scheme scheme for senior • 20% on the portion of based on the effective To allow the setting executives in mobility/ compensation paid ranging fixed and variable up of a medium-term international profiles. between 4 and 20 PASS (1 PASS = compensation savings scheme for senior €39,732 in 2018), (capped) executives. No long-term • plus 10% on the portion of undertakings for Rexel compensation paid ranging between 20 and 40 PASS. The variable compensation taken into consideration will be limited to 80% of the fixed annual compensation. Specific situation in the organization or activities or because of the Some executives benefited from the upholding of the involvement they require or because of the difficulties defined-benefit retirement scheme, in consideration they present, or transactions that do not fall within the of their career and seniority. Thus, the Chief Executive scope of routine missions of the executive corporate Officer, Patrick Berard, has been maintained in the officer. The payment of such compensation items defined-benefit retirement scheme taking into must be motivated and the reasons having led to account his length of service within the group and their implementation must be explained. In any case, his career (Patrick Berard joined Rexel in 2003) this exceptional compensation would be capped and does not benefit from the mid-term collective at 100% of the annual fixed compensation of the savings scheme. The benefits of the defined-benefit relevant executive corporate officer. retirement scheme in respect of the corporate office Similarly, if the Board of Directors intends to focus of Patrick Berard is subject to performance criteria on the internal development of talents in succession (the performance criteria are the same than those plans, it also considers that the payment of a used for the financial year ended December 31, 2017 recruitment indemnity for an executive corporate and detailed in paragraph 3.2.3.2 “Compensation and officer may be envisaged, if justified by the best other benefits of the Chief Executive Officer, Patrick interest of the Group in order to attract a new Berard, in respect of the financial year 2017” of the talented top executive (Article 24.4 of the Afep- Registration Document). This scheme complies with Medef Code). This indemnity would be proportional the guidelines of the Afep-Medef Code. to the loss effectively suffered by the executive upon his/her change of duties, in particular in respect of Other exceptionalcompensation and the annual variable compensation and long-term recruitment indemnity compensation, and in any event this indemnity The Board of Directors considers that, for the best would be capped at 2/3 of two years of global interest of the Group and of the stakeholders, it compensation of the previous duties. should not be excluded as a principle that exceptional In any case, these compensation items would meet compensation be allocated to executive corporate the requirements of the Afep-Medef Code and officers in very specific circumstances, as provided for comply, in particular, with the principles of measure by the Afep-Medef Code (article 24.3.4), in particular and fair balance among the various interests in case of significant transactions because of their size in presence. These compensation items shal l be or nature or because they result in a material change properly disclosed and clearly justified. REXEL 2017 – REGISTRATION DOCUMENT 90