Adaptation of performance conditions applying to the plans set up on or after 1 January 2019
Given the uncertainties surrounding the Covid-19 pandemic and in order to maintain the interest of these plans as a means to foster loyalty, the Board decided at its meeting of 4 February 2021 to eliminate VINCI Airports from the ROCE calculation when determining Group performance in line with the internal criterion, from the second quarter of 2020, and until such time as passenger numbers at the facilities operated by VINCI Airports (as reported by IATA) return to the level seen in 2019 on a full-year basis. Activity in this sector has contracted dramatically, due to the travel restrictions introduced by governments around the world in response to the Covid-19 pandemic, and there is a lack of visibility as to how long this situation will last. The aforementioned adaptation was decided in order to maintain the usefulness of these plans in encouraging motivation and loyalty among their beneficiaries.
It should be noted that this adaptation will not apply to the long-term incentive plans set up for the executive company officer (Xavier Huillard) in 2019 and 2020. The performance conditions of the plans for which he is eligible remain as they are described in paragraph 5.4.2, page 174 of the 2019 Annual Report (for the plan set up on 17 April 2019) and in paragraph 5.2.2, page 165 of the 2020 Universal Registration Document (for the plan set up on 18 June 2020).
5.2.2 Performance share plans set up by the Board at its meeting of 8 April 2021
At its meeting of 8 April 2021, the Board decided to use the delegation of authority given by the shareholders at the Shareholders’ General Meeting held on that same date to set up a performance share plan to grant awards satisfied using existing VINCI shares pursuant to Article L.225-197-1 of the French Commercial Code, with effect from 8 April 2021.
This plan provides for the granting of awards involving a total of 2,458,780 existing shares to 3,949 beneficiaries. The members of the Executive Committee, with the exception of Mr Huillard, thus a total of 10 persons, are eligible to receive 117,000 shares, thus about 4.8% of the shares in the awards. The executive company officer is not eligible to receive performance shares under this plan. The plan calls for vesting at the end of a three-year period, which began on 8 April 2021 and will end on 8 April 2024. Vesting is subject to continued employment within the VINCI Group as well as performance conditions, comprising an economic criterion accounting for 50% of the award, two financial criteria together accounting for 25% of the award and three ESG criteria together accounting for 25% of the award.
- The economic criterion relates to the measurement of net value creation, which is determined on the basis of the ratio of the return on capital employed (ROCE), calculated as an average over three years (2021, 2022 and 2023), to the weighted average cost of capital (WACC), also calculated as an average over the same three years, as noted by the Board at 31 December 2023. This indicator will be determined by excluding the Group’s airport activities (VINCI Airports) from the ROCE calculation until such time as passenger numbers at this entity’s facilities return to 2019 levels (according to data published by the IATA) on a full-year basis. The vesting percentage in line with this economic criterion will depend on this ratio. It will be 100% if the ratio is 1.25x or higher and 0% if it is 1.0x or higher, with linear interpolation between the two limits of this range.
- The financial criteria consist of a stock market performance criterion (12.5% weighting) and a debt management criterion (12.5% weighting). The stock market performance criterion measures, over a period of three years, the performance of the VINCI share compared with that of a composite industry index comprised of companies representing the full range of VINCI’s business activities, which is calculated by a third party. The composite index comprises 14 listed companies active in the industry sectors concerned. This performance is determined on the basis of the difference, whether positive or negative, noted at 31 December 2023, between the total shareholder return (TSR) achieved by a VINCI shareholder over the period from 1 January 2021 to 31 December 2023 and the TSR that a shareholder invested in the composite industry index would have achieved over the same period, in both cases with dividends reinvested. The vesting percentage in line with this stock market performance criterion will depend on this difference. It will be 100% if the difference is positive by 5 percentage points or more, 50% if the two TSR results are equivalent and 0% if the difference is negative by 5 percentage points or more, with linear interpolation between the two limits of this range.
The debt management criterion measures the Group’s ability to generate cash flows in line with its level of debt. This target will be measured by the FFO (funds from operations)/net debt ratio, determined according to the methodology of rating agency Standard & Poor’s. The vesting percentage in line with this criterion will depend on this ratio. It will be 100% if the ratio is 20% or higher and 0% if it is 15% or lower, with linear interpolation between the two limits of this range.
- The ESG criteria consist of an external environmental criterion (15% weighting) as well as two new criteria, one measuring safety performance (5% weighting) and another relating to the presence of women in leadership roles (5% weighting). The external environmental criterion reflects the effectiveness of the Group’s environmental actions and initiatives. It is measured on the basis of the Climate Change score received by VINCI from CDP Worldwide. The vesting percentage in line with this criterion will depend on the scores obtained during the period. It will be 100% if the score received is in the B band or higher for each of the three years, 66% if the score received is in the B band or higher for two of the years, 33% if the score received is in the B band or higher for only one of the years and 0% if no score in the B band or higher is received.
The safety criterion measures the Group’s performance with respect to safety based on the frequency rate for lost-time workplace accidents.
For this criterion, the vesting percentage will be 100% if this rate is 5.30% or lower, 50% if it is equal to 5.60% and 0% if it is higher than 5.90%, with linear interpolation between the two limits of this range.
The criterion relating to the presence of women in leadership roles tracks the increase in the percentage of women hired or promoted to management positions worldwide across the Group. In 2020, that percentage was 25.30%. The aim is to increase it to 28.33% by the end of 2023. The vesting percentage in line with this criterion will be 100% if the percentage of women hired or promoted to management positions at end-2023 is 28.33% or higher and 0% if it is lower than 25.30%, with linear interpolation between the two limits of this range.
It will be the responsibility of the Board to record the vesting percentages in line with the criteria described above.
