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Company officers’ remuneration and interests

Chairman and Chief Executive Officer

Remuneration policy applicable for the period 2014–2018

At its meetings of 5 February and 15 April 2014, the Board established the remuneration policy applicable to Xavier Huillard in his capacity as Chairman and Chief Executive Officer for the period 2014–2018, acting on a proposal from the Remuneration Committee.

The Chairman and Chief Executive Officer’s remuneration consists of three components:
- a short-term fixed component paid in cash, set at €1,000,000 per year for the duration of his term of office;
- a short-term variable component also paid in cash, the amount of which is tied to annual performance achievements, with an overall ceiling of 1.6 times the short-term fixed component; and
- a long-term component involving an annual award of VINCI shares that will vest after a period of three calendar years, provided that certain performance conditions are met. This award includes a specific number of VINCI shares, whose fair value is known at the time of the award, but whose definitive value may vary, depending on the number of shares that vest subject to the performance conditions and the VINCI share price at that date.

This policy has resulted in a remuneration package structured as shown below for the period 2014–2018:

a) Short-term fixed component

The short-term fixed component of the Chairman and Chief Executive Officer’s remuneration was set at €1,000,000 per year for the duration of his term of office, thus over the period 2014–2018. This component is paid in cash.

b) Short-term variable component

The short-term variable component of Mr Huillard’s remuneration is a total amount determined each year by the Board when approving the financial statements for the previous year, following a precise methodology introduced in February 2014. This methodology is based on economic and managerial criteria tied to the Group’s performance. It stipulates a limit for each item as an absolute value. Should the performance level achieved for each item make him eligible to receive the maximum amount, the Chairman and Chief Executive Officer’s short-term remuneration would be structured as follows:

This apportionment is theoretical given that the respective weightings of the four indicators determining the variable component may vary, just as the variable component itself may account for less than 62% of the total short-term remuneration.

The methodology involves an evaluation of the Chairman and Chief Executive Officer’s performance, based in part on quantitative criteria of an economic nature and in part on qualitative criteria relating to managerial and corporate social responsibility performance.

The amount of the bonuses is determined on the basis of these criteria, and the total amount may range from €0 to a maximum of €1,600,000. This ceiling is equivalent to 1.6 times the short-term fixed component of his remuneration.

The criteria taken into account and the corresponding bonuses are presented in the table below:

The amount corresponding to the economic part results from the sum of three different bonuses (1, 2 and 3), the amounts of which are based on the movement in each of the three financial indicators shown in the table above. Each definitive bonus depends on the percentage of movement for the indicator in question against the level of this same indicator at 31 December of the previous year, using guidelines established by the Board. These guidelines make the payment of the maximum bonus for each indicator contingent upon attaining a performance of 115% or 130%, as shown above. The reference bonus corresponds to the situation whereby the indicator’s level is the same as in the previous year. In the event of negative movement in an indicator, the bonus is reduced and may be nil.

The amount corresponding to the managerial part (4) is determined by the Board after taking into consideration the Chairman and Chief Executive Officer’s performance in achieving the qualitative goals set by the Board at the start of the previous year. This is done by applying a weighting coefficient reflecting the goals considered as priorities. This determination is based on a detailed proposal prepared jointly by the Remuneration Committee and the Appointments and Corporate Governance Committee. The Board reserves the option to change the indicators used depending on the environment and the context.

c) Long-term component

Mr Huillard’s remuneration includes a long-term component, which takes the form of a deferred and conditional award of shares in the Company. To date, the fair value of this component has represented, on average, about 40% of his total annual remuneration (fixed, variable and long-term components).

It should be noted that VINCI’s executive company officers are not currently eligible to receive performance share awards as provided for in Article L.225-197-1 of the French Commercial Code, due to the criteria laid down by Article L.225-197-6 of that Code.

d) Pension and insurance plans

Mr Huillard participates in the Group’s pension and insurance plans set up by VINCI for its employees. In order to ensure clarity in this regard, the Board decided to formally confirm his senior executive status.

He also participates in:
- the REVERSO defined contribution pension plan (known in France as an “Article 83” plan, in reference to the article in the French Tax Code under which it is established) set up by VINCI in 2013 for its executives and other management-level personnel and described in chapter, “Workforce-related, environmental and social information”;
-the supplementary defined benefit pension plan (known in France as an “Article 39” plan, also in reference to the French Tax Code) set up in 2010 by VINCI for senior executives of VINCI SA and VINCI Management.

It should be noted that the benefits under these plans have been taken into account in determining Mr Huillard’s overall remuneration, following the approval of his eligibility by the Shareholders’ General Meeting of 15 April 2014 (Tenth resolution).

e) Severance pay

The Shareholders’ General Meeting of 15 April 2014 approved, in its Eleventh resolution, a commitment to provide Mr Huillard with severance pay in the event that the Board simultaneously terminates both of his appointments as Chairman of the Board and Chief Executive Officer prior to the normal expiry of his term of office as Director, except in the case of gross negligence or retirement. This commitment is limited to 24 months of his remuneration, in line with the recommendations of the Afep-Medef code.

The amount of severance pay would be determined by the Board with regard to the Group’s economic performance, measured by applying the same indicators as those used for the calculation of the economic part of his variable remuneration (net earnings per share, recurring operating income, free cash flow).

Severance pay could reach the equivalent of 24 months of his remuneration if the average rate of achievement of the quantitative targets used to calculate the variable part of his remuneration over the two years preceding the termination of his appointments were above 100% of the objective and nil if the average rate were less than or equal to 60% of the objective. Between these two limits, the amount of severance pay would be determined by linear interpolation.

The amount of severance pay would be halved if the termination occurs during the fourth year of Mr Huillard’s term of office.

f) Benefits in kind

Mr Huillard has the use of a company car.

Remuneration policy applicable for the period 2018–2022

At its meeting of 7 February 2018, the Board, acting on a proposal from the Remuneration Committee, established the remuneration policy applicable to Mr Huillard in his capacity as Chairman and Chief Executive Officer for the period 2018–2022, should the Shareholders’ General Meeting approve the resolution to renew his term of office as Director for a further four years.

The Chairman and Chief Executive Officer’s remuneration over this period would be divided into three components:
- a short-term fixed component paid in cash;
- a short-term variable component also paid in cash, whose amount will be tied to annual performance achievements, with an overall ceiling equivalent to 1.6 times his fixed remuneration;
- a long-term component whose fair value, determined at the grant date, may not exceed a ceiling equivalent to twice the maximum amount of his fixed and variable remuneration.

a) Benchmarking exercise

At the request of the Remuneration Committee, a benchmarking exercise relating to the components of Mr Huillard’s remuneration package is conducted by an independent firm and updated on a regular basis, using a representative peer group of some 15 French companies that operate within comparable markets and are all members of the CAC 40. It should be noted that the VINCI Group has consistently ranked among the top companies included in the benchmarking exercise, in terms of revenue, market capitalisation and number of employees.

With respect to the 2016 financial year, the benchmarking results for the peer group of French companies reveal that Mr Huillard’s 2016 remuneration was lower than that paid in the median of this peer group.

b) Fixed component

The Board has decided to increase the fixed component of the Chairman and Chief Executive Officer’s remuneration to €1,200,000 per year for the duration of his term of office, thus for the period from 2018 to 2022. This amount, which is 20% higher than its previous level set in 2014, represents an average annual rise of 2.6% between April 2014 and April 2022.

The Chairman and Chief Executive Officer would thus be awarded fixed remuneration corresponding to that paid in the third quartile of the peer group, according to the results of the benchmarking exercise for the 2016 financial year. In the opinion of the Board, this remuneration amount is warranted, due to the Group’s international expansion and the growing complexity of its activities.

c) Short-term variable component

The short-term variable component of Mr Huillard’s remuneration for the period 2018–2022 would be a total amount determined each year by the Board when approving the financial statements for the previous year, following a precise methodology that will be updated in February 2018. This methodology is based on economic and managerial criteria tied to the Group’s performance. It stipulates a limit for each item as an absolute value.

Should the performance level achieved for each item make him eligible to receive the maximum amount, the Chairman and Chief Executive Officer’s short-term remuneration would be structured as follows:

This apportionment is theoretical given that the respective weightings of the four indicators determining the variable component may vary, just as the variable component itself may account for less than 62% of the total short-term remuneration.

The methodology involves an evaluation of the Chairman and Chief Executive Officer’s performance, based in part on quantitative criteria of an economic nature and in part on qualitative criteria relating to managerial and corporate social responsibility performance. The amount of the bonuses is determined on the basis of these criteria, and the total amount may range from €0 to a maximum of €1,920,000. This ceiling is equivalent to 1.6 times the short-term fixed component of his remuneration.

The criteria to be taken into account by the Board and the corresponding bonuses are presented in the table below:

The amount corresponding to the economic part will result from the sum of three different bonuses (1, 2 and 3), the amounts of which will be based on the movement in each of the three financial indicators shown in the table above. Each definitive bonus will depend on the percentage of movement for the indicator in question against the level of this same indicator at 31 December of the previous year, using guidelines established by the Board. These guidelines make the payment of the maximum bonus for each indicator contingent upon attaining a performance of [110%]. The reference bonus corresponds to the situation whereby the indicator’s level is the same as in the previous year. In the event of negative movement in an indicator, the bonus is reduced and may be nil. However, the Board reserves the right to amend these rules in order to cover exceptional situations.

The amount corresponding to the managerial part (4) will be determined by the Board after taking into consideration the Chairman and Chief Executive Officer’s performance in achieving the qualitative goals set by the Board at the start of the year. This is done by applying a weighting coefficient reflecting the goals considered as priorities. This determination is based on a detailed proposal prepared jointly by the Remuneration Committee and the Appointments and Corporate Governance Committee. The Board reserves the option to change the indicators used depending on the environment and the context.

For financial year 2018, the Board has decided to take into account the Group’s expansion over the medium and long term, duty of vigilance and compliance, health and safety in the workplace, and the quality of corporate governance.

d) Long-term component

Mr Huillard’s remuneration will include a long-term component in the form of an annual award, the content of which may be determined by the Board. This award may be comprised of physical or synthetic VINCI shares and may be granted either under a plan set up in accordance with ordinary law or under any other plan permitted by law. The vesting of shares in this award will be subject to internal and external performance conditions evaluated with respect to a period of three calendar years.
The fair value of the long-term component, determined at the grant date, may not exceed a ceiling equivalent to twice the maximum amount of Mr Huillard’s fixed and variable remuneration.

It should be noted that VINCI’s executive company officers are not currently eligible to receive performance share awards as provided for in Article L.225-197-1 of the French Commercial Code, due to the criteria laid down by Article L.225-197-6 of that Code.

e) Pension and insurance plans

Mr Huillard would continue to be deemed a senior executive so as to entitle him to participate in the Group’s defined benefit pension plans and insurance plans.

In addition, the Board has noted that Mr Huillard met all eligibility requirements at 1 January 2018 to claim his pension under the defined benefit plan set up in March 2010 by the Company for its senior executives, namely having reached the legal retirement age, having completed at least 10 years’ service as specified by the plan and having ended his professional career within the Group as stipulated by the Board in March 2010 for company officers not holding employment contracts.

The Board also noted that the pension benefits Mr Huillard would be entitled to receive are, in any event, subject to a payment limit equal to 7.45 times the annual French social security ceiling.

Consequently, the renewal of Mr Huillard’s term of office would not affect the amount of his pension benefits, due to the existence of this payment limit, except for the fact that by deferring his claim to this pension, Mr Huillard would benefit in future from the payment limit equal to 8 times the annual French social security ceiling (instead of 7.45 times this ceiling), which enters into effect on 1 January 2019. This limit would apply to him in any case should he not claim his pension before this date, and this would be true whether or not his term of office is renewed.

Given that the increase in this limit (equivalent to 0.55 times the annual French social security ceiling, or €21,853 in 2018) will occur during Mr Huillard’s term of office, the Board has decided to make the benefit of this increase subject to a performance condition. This performance condition is based on the ratio of the return on capital employed (ROCE) to the weighted average cost of capital (WACC), as noted by the Board at 31 December 2018. Both the numerator and the denominator of this ratio are calculated as an average over the same three years (2016, 2017 and 2018). The increase in the payment limit will vest at 100% if this ratio is at least equal to 1.10 and at 0% if it is lower than 1, with linear interpolation between these two limits. However, when applying this rule, the Board reserves the option to take into account the potential impact of any major acquisitions.

A resolution to ratify the approach applied for these benefits will be put to a vote at the Shareholders’ General Meeting of 17 April 2018.

f) Severance pay

At its meeting of 7 February 2018, the Board approved a commitment to provide Mr Huillard with severance pay in the event that the Board simultaneously terminates both of his appointments as Chairman of the Board and Chief Executive Officer prior to the normal expiry of his term of office as Director, except in the case of gross negligence or retirement. This commitment is limited to 24 months of his remuneration, in line with the recommendations of the Afep-Medef code.

The amount of severance pay would be determined by the Board with regard to the Group’s economic performance, measured by applying the same indicators as those used for the calculation of the economic part of his variable remuneration (net earnings per share, recurring operating income, operating cash flow).

Severance pay could reach the equivalent of 24 months of his remuneration if the average rate of achievement of the quantitative targets used to calculate the variable part of his remuneration over the two years preceding the termination of his appointments were above 100% of the objective and nil if the average rate were less than or equal to 60% of the objective. Between these two limits, the amount of severance pay would be determined by linear interpolation.
The amount of severance pay would be halved if the termination occurs during the fourth year of Mr Huillard’s term of office.

As this commitment is covered by the authorisation procedure for regulated agreements, a resolution to ratify its authorisation will be put to a vote at the Shareholders’ General Meeting of 17 April 2018, in accordance with Article L.225-42-1 of the French Commercial Code.

g) Benefits in kind

Mr Huillard will have the use of a company car.

Items of remuneration subject to shareholder approval in accordance with Article L.225-37-2 of the French Commercial Code

a) Summary table

At the Shareholders’ General Meeting of 17 April 2018, in accordance with Article L.225-37-2 of the French Commercial Code, shareholders will be asked to vote on a draft resolution to establish the following principles and guidelines used to determine the Chairman and Chief Executive Officer’s remuneration:

b) Draft resolution put to a vote at the Shareholders’ General Meeting of 17 April 2018

Thirteenth resolution
Approval of the principles and guidelines used to determine and structure the fixed, variable and exceptional components of the totalremuneration and benefits of any kind payable to the Chairman and Chief Executive Officer

The Shareholders’ General Meeting, acting in accordance with Article L. 225-37-2 of the French Commercial Code, having reviewed the Report of the Board of Directors and in particular the Report on corporate governance included therein, hereby approves the principles and guidelines used to determine and structure the fixed, variable and exceptional components of the total remuneration and benefits of any kind payable to the Chairman and Chief Executive Officer, as detailed in the report required by the final paragraph of Article L.225-37of this same Code and provided on page 156 of the 2017 registration document.

Decisions relating to the Chairman and Chief Executive Officer’s remuneration for financial year 2017

a) Short-term variable remuneration payable to the Chairman and Chief Executive Officer in respect of 2017

At its meeting of 7 February 2018, the Board, acting on a proposal from the Remuneration Committee and, for the managerial part, on a proposal prepared jointly by this Committee and the Appointments and Corporate Governance Committee, approved as shown below the variable remuneration payable to Mr Huillard in respect of 2017:

The Board again noted the challenging nature of the economic objectives set, since although the Company delivered strong and stable performance in 2017 despite economic headwinds, the economic part of the 2017 bonus corresponds to only 82.7% of the maximum amount. However, it exceeds the reference bonus, which assumes stability for the selected indicators, by 32.2%.

With respect to the managerial part of Mr Huillard’s variable remuneration, the Board concluded that it was appropriate to award him 95% of the maximum amount, in light of his managerial performance. In reaching this determination, the Board noted in particular the quality and relevance of the strategy pursued as well as the effectiveness of the external growth transactions carried out, especially, but not exclusively, in the airport and energy sectors. It also observed that, in 2017, significant progress had been made with respect to workplace accidents in line with the Group’s accident prevention policy and that the practice of governance between Executive Management and the Board had functioned smoothly overall.

The Board therefore decided to set the total amount of Mr Huillard’s variable remuneration at €1,388,759, before deducting Directors’ fees received in 2017 (€13,830 net).

b) Long-term component of the Chairman and Chief Executive Officer’s remuneration

At its meeting of 7 February 2017, the Board noted that the performance conditions under the long-term incentive plan set up on 15 April 2014 had been met. Accordingly, the Board decided that all of the 23,473 shares initially included in the award granted to Mr Huillard, after applying the adjustment of November 2014, would vest at 15 April 2017.

Furthermore, at its meeting of 20 April 2017, the Board decided to grant a conditional award to Mr Huillard, corresponding to a maximum of 30,000 VINCI shares. At that time, the fair value of this award was €1,836,000. All or some of the shares in question will vest at the end of a three-year period on 20 April 2020, subject to the fulfilment of performance conditions that will be evaluated at 31 December 2019.

It should be noted that the vesting of this award is subject to the same performance conditions as those applying to grants of share awards under the performance share plans set up by the Company for the Group’s employees. The performance conditions under these plans also involve an evaluation covering a period of three calendar years.

Since the start of Mr Huillard’s term of office, he has been the recipient of the following grants in connection with the long-term component of his remuneration:

c) Pension and insurance plans

With respect to the defined benefit pension plan mentioned in paragraph 4.1.1.4 on page 152, and as required by Decree no. 2016-182 of 23 February 2016, the following points should be noted:

Employment contract, specific pension plans, severance pay and non-competition clause

Remuneration due and/or paid to the Chairman and Chief Executive Officer in 2017

a) Summary of remuneration due and options and share awards granted (in €)

b) Summary of remuneration (in €)

Items of remuneration due or granted in respect of the 2017 financial year to the executive company officer, subject to the approval of the Shareholders’ General Meeting of 17 April 2018

At the Shareholders’ General Meeting of 17 April 2018, in accordance with Article L.225-100 of the French Commercial Code, shareholders will be asked to vote on a draft resolution relating to the items of remuneration due or granted in respect of the 2017 financial year to Mr Huillard, Chairman and Chief Executive Officer.

Supplementary pension plan set up for senior executives

VINCI SA and its subsidiary VINCI Management have set up a defined benefit pension plan for their senior executives, with the aim of guaranteeing them a supplementary annual pension. The table below presents the main features of this plan:

Non-executive company officers

Principles and rules for determining the remuneration and benefits of the Vice-Chairman and Lead Director

In his capacity as Vice-Chairman and Lead Director, Yves-Thibault de Silguy receives specific Directors’ fees calculated as described below.

In addition, on 5 February 2014 the Company entered into a services agreement with YTSeuropaconsultants, of which Mr de Silguy is sole shareholder. This agreement was authorised by the Board and approved by the Shareholders’ General Meeting of 15 April 2014 (Twelfth resolution).

The agreement covers the provision of services as described in paragraph 2.3 on page 132, with oversight by the Audit Committee, in return for an annual flat fee of €330,000 (ex. VAT). It was entered into for a duration of four years, with the option for either party to terminate the agreement each year.

A resolution to renew this services agreement will be put to a vote at the Shareholders’ General Meeting of 17 April 2018.

Finally, it should be noted that Mr de Silguy has received a pension paid by the Company since 30 April 2010. VINCI’s commitment under this pension totalled €7,849,298 at 31 December 2017. Mr de Silguy also has the use of a company car.

Principles and rules for the payment of Directors’ fees

The Shareholders’ General Meeting of 14 April 2015 had set the aggregate amount of Directors’ fees at €1,150,000 for each financial year, starting on 1 January 2015. By decision of the Shareholders’ General Meeting of 20 April 2017, this aggregate amount was raised to €1,400,000 for each financial year, starting on 1 January 2017. This increase was justified by the need for the Board to have an amount appropriate for the payment of Directors’ fees in line with the assiduous participation by the Board’s members in all its meetings and those of its committees, which have become necessary to further the Group’s expansion.

At its meeting of 4 February 2015, the Board had decided to allocate this aggregate amount of Directors’ fees as follows (amounts given on an annual basis, unless otherwise stated):
- the Chairman and Chief Executive Officer receives no Directors’ fees from the Company;
- each Director receives €20,000 in fixed fees and €3,500 in variable fees per Board meeting;
- an additional amount of €1,000 is paid per Board meeting for Directors residing in an EU country other than France and €2,000 for Directors residing outside the EU, provided that they physically attend the Board meetings;
- the Chair of each committee receives €25,000, the members of the Audit Committee receive €15,000 and the members of the other committees receive €10,000, in addition to the Directors’ fees mentioned above.
- the Vice-Chairman and Lead Director receives an additional payment of €100,000 in respect of his position as Lead Director.

At its meeting of 15 December 2017, the Board decided to change the allocation rules for Directors’ fees as follows in order to improve their variability (amounts given on an annual basis, unless otherwise stated), effective 1 July 2017:
- the Chairman and Chief Executive Officer receives no Directors’ fees from the Company;
- each Director receives €25,000 in fixed fees and €3,500 in variable fees per Board meeting for physical attendance per Board meeting or €1,750 in the event of participation via audio or video conferencing (if more than one Board meeting is held on the same day, a single variable fee is paid, with the exception of the two meetings held on the date of the Shareholders’ General Meeting, in which case Directors receive two fees if they take part in both Board meetings);
- the Chair of each committee receives €20,000 in fixed fees, the members of the Audit Committee receive €10,000, the members of the Strategy and CSR Committee receive €4,000, and the members of the Appointments and Corporate Governance Committee and of the Remuneration Committee receive €5,500; Directors also receive €1,500 in variable fees for physical attendance at each committee meeting and €750 in the event of participation via audio or video conferencing;
- an additional amount of €1,000 is paid per Board or committee meeting for Directors residing in an EU country other than France and €2,000 for Directors residing outside the EU, provided that they physically attend these meetings;
- the Vice-Chairman and Lead Director receives an additional payment of €100,000 in respect of his position as Lead Director.

Directors’ fees and other remuneration due and/or paid to non-executive company officers in 2017

The total amount of Directors’ fees paid in 2017 by the Company (for the second half of 2016 and the first half of 2017) amounted to €959,000. Some company officers also received Directors’ fees in 2017 from companies controlled by VINCI.

The total amount of Directors’ fees payable by VINCI in respect of 2017 was €1,099,000.

The table below summarises the Directors’ fees and other remuneration received in 2016 and 2017 by non-executive company officers of VINCI.

VINCI shares held by company officers

Shares held by Directors of the Board

In accordance with the Company’s Articles of Association, each Director (other than the Director representing employee shareholders and the Directors representing employees) must hold a minimum of 1,000 VINCI shares which, on the basis of the share price at 31 December 2017 (€85.15), amounts to a minimum of €85,150 invested in VINCI shares.

The number of shares held by each of the company officers, as declared to the Company, is included.

Share transactions by company officers, executives and persons referred to in Article L.621-18-2 of the French Monetary and Financial Code

The Group’s company officers and executives subject to spontaneous declaration of their share transactions carried out the following transactions in 2017:

 

Further information

Statement relating to severance pay commitment decided by the VINCI Board of Directors on 7 February 2018 47 Kb
Deliberation of the Board of Directors of 7 February 2018 regarding the satisfaction of performance conditions under the long-term incentive plan set up on 14 April 2015 46 Kb


ARCHIVS

Decisions on 15 april 2014 (compensation of company officers) 48 Kb
Décision du 6 mai 2010 (engagement de retraite - M. de Silguy) Available in french only 42 Kb
Décision du 3 mars 2010 (rémunération mandataires sociaux) Available in french only 94 Kb
Décision du 27 février 2008 (engagement de retraite - M. de Silguy) Available in french only 57 Kb
VINCI adopts the AFEP-MEDEF code of corporate governance (13 November 2008) 31 Kb
VINCI adopts and implements the AFEP-MEDEF code of corporate governance (16 December 2008) 24 Kb