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€83.960 -0.29 %   03/07/2020 17:36

Company officers’ remuneration and interests

Remuneration policy for company officers

Remuneration policy for Board members

The members of the Company’s Board of Directors receive remuneration for their involvement in the work of the Board and its committees. The maximum amount for the total remuneration paid to all Board members was set at €1,600,000 by resolution of the shareholders at the Shareholders’ General Meeting of 17 April 2019. This limit applies to remuneration paid to Directors for one calendar year, regardless of the date of payment. It does not include remuneration paid to executive company officers when they are also Board members, who receive remuneration only as provided by the policy mentioned in paragraph 4.1.2.

The guidelines for the allocation of remuneration paid to Directors, as determined by the Board, acting on a proposal by the Remuneration Committee, are currently as follows, with the understanding that the Board may amend these guidelines, if necessary:

 - At the outset, Board members receive annual fixed remuneration consisting of:
   - Basic remuneration equal to €25,000 for each Director;
   - With additional remuneration of:
      - €70,000 for the Vice-Chairman;
      - €30,000 for the Lead Director;
      - €20,000 for the Chairman of Board committee;
      - €10,000 for Audit Committee members;
      - €5,500 for Remuneration Committee members;
      - €5,500 for Appointments and Corporate Governance Committee members;
      - €4,000 for Strategy and CSR Committee members.

 - Directors also receive variable remuneration equal to:
   - €3,500 for each Board meeting at which they are physically present. This remuneration is halved to €1,750 per meeting if Directors take part via audio or video conferencing. If more than one Board meeting is held on the same day, this remuneration is paid only once, with the exception of the two meetings held before and after the Shareholders’ General Meeting, when Board members receive two payments, their amounts depending on the manner of participation in these meetings.
   - €1,500 for each committee meeting at which they are physically present, with this amount halved, to €750, for participation via audio or video conferencing. This amount is paid to any Director participating on a voluntary basis in a meeting of the Strategy and CSR Committee. If a committee holds more than one meeting on the same day, this amount is paid only once.
   - Provided they are physically present at these meetings, additional amounts are paid as follows to Board members who are not French residents, again with a single payment of this amount if more than one Board or committee meeting is held on the same day:
      - €1,000 per meeting for Directors who reside elsewhere in Europe;
      - €2,000 per meeting for Directors who reside outside Europe.

Board members are entitled to the reimbursement of expenses they have incurred in the exercise of their duties and, in particular, any travel and accommodation costs connected with attending meetings of the Board and its committees.

The Vice-Chairman has the use of a company car.


Remuneration policy for executive company officers


Overall structure of the remuneration package


Executive company officers receive a remuneration package consisting of a short-term fixed component, a short-term variable component and a long-term component. Each of these components is discussed below.

Short-term fixed component
The amount of the short-term fixed component applying to an executive company officer is set by the Board at the time of appointment.

Short-term variable component
The rules for determining the short-term variable component aim to take account of the Group’s overall performance. To this end, they include three distinct elements reflecting economic and financial, managerial, and environmental, social and governance (ESG) factors, all contributing to overall performance. The rationale for choosing these indicators is given below. The amount of the short-term variable component is equal to the sum of the bonuses thus determined.

Long-term variable component
The remuneration of executive company officers also includes a long-term portion intended to align the interests of the beneficiaries with those of the shareholders, taking a multi-year perspective.

To this end, the Board carries out an analysis each year to determine the appropriate structure of the award for this component. It 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. Since 2014, all awards to executive company officers have been granted in accordance with ordinary law and satisfied using existing VINCI shares.

In order to receive these awards, beneficiaries are required to have remained with the Group. The Board reserves the right to maintain eligibility in other cases, depending on its assessment of the circumstances.

Based on their fair value under IFRS 2, these awards are subject to an upper limit equal to 100% of short-term fixed and variable remuneration. The vesting of shares is subject to continued service as well as performance conditions evaluated over a period of three years, which may decrease the number of shares delivered or eliminate the award entirely.

The Board has approved the performance conditions shown in the table below for plan years beginning in 2019.

Pension and insurance plans
The remuneration policy for executive company officers includes eligibility for the insurance plan set up by VINCI for its employees as well as a specific pension plan. Given the closing in 2019 of the defined benefit pension plan set up in 2010, the Board reserves the right, as necessary, to put in place a substitute plan in the event that an executive company officer is not eligible for coverage under the aforementioned plan.

Benefits in kind
Executive company officers have the use of a company car.

Overview of the remuneration policy
On the basis of the above structure, this remuneration system has the following features:

Remuneration policy applicable to Xavier Huillard


The remuneration policy applicable to Xavier Huillard was established by the Board in 2018 upon the renewal of his term of office as Chairman and Chief Executive Officer and was adjusted in 2019 with an increase in the weighting of ESG performance indicators. It is based on the principles set out in paragraph 4.1.2. Its main features are summarised in the table below.

In the event that Mr Huillard leaves the Group, the guidelines for the vesting of awards are as follows:

Pension and insurance plans
Given that the Board has officially confirmed his senior executive status, Mr Huillard is eligible to participate in the defined contribution pension plans and insurance plans set up by VINCI for its employees.

He is also eligible to participate in the supplementary defined benefit pension plan (known in France as an “Article 39” plan) set up in 2010 by VINCI for senior executives of VINCI SA and its subsidiary VINCI Management. This plan, which is described in chapter C, paragraph 4.2.3, page 169, was closed to new members in July 2019 pursuant to Order no. 2019-697 of 3 July 2019, but its beneficiaries are not required to forfeit any benefits vested at the closing date.

Under this plan, Mr Huillard will receive a supplementary pension, the amount of which is capped at eight times the annual French social security ceiling (i.e. €329,088 at 1 January 2020).

It should be noted that the benefits under these plans were taken into account in determining Mr Huillard’s overall remuneration.

Severance pay
In the Eleventh resolution passed at the Shareholders’ General Meeting of 17 April 2018, shareholders 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 capped at 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 (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 85% 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.

Benefits in kind
Mr Huillard has the use of a company car.

Comparative information


External benchmarking exercise
At the request of the Remuneration Committee, a benchmarking exercise relating to the components of the Chairman and Chief Executive Officer’s remuneration package is conducted by an independent firm and updated on a regular basis. The aim of this exercise is to ensure that the remuneration of the Group’s top executive remains coherent and in line with the market. The most recent update was based on the latest available information, namely public data relating to the 2018 financial year.

For the purposes of this exercise, the Remuneration Committee selected two representative peer groups, the first comprised of 17 French industrial companies that are members of the CAC 40 (the “CAC 40 peer group”), and the second comprised of 10 European companies operating in comparable markets (the “International peer group”).

These two peer groups are as follows:
   - CAC 40 peer group: Air Liquide, Bouygues, Saint Gobain, Danone, Engie, Essilor International, Legrand, L’Oréal, Michelin, Pernod Ricard, PSA, Renault, Safran, Schneider Electric, Total, Valeo and Veolia Environnement
   - International peer group: Bouygues, Eiffage, ACS, AENA, Atlantia, Ferrovial, Fraport, Hochtief, Strabag and Skanska

Although these peer groups are deemed to be representative, it should be noted that the benchmarking exercise for financial year 2018 revealed that the VINCI Group ranks among the top companies included in terms of market capitalisation, revenue and number of employees, as shown in the charts below. The analysis also shows that VINCI outperforms the median of both peer groups and that its results are in line with the third quartile of each, bringing together the portion of the survey sample below which 75% of companies included in the study are situated.

According to the results of the benchmarking exercise for 2018, the total remuneration received by VINCI’s Chairman and Chief Executive Officer was:
   - above the International peer group median and above that of the CAC 40 peer group;
   - below the third quartile of both peer groups with respect to short-term remuneration and below that of the CAC 40 peer group with respect to overall remuneration.

Internal comparison

In accordance with the sixth paragraph of Article L.225-37-3 of the French Commercial Code, it is noted that the ratio between the Chairman and Chief Executive Officer’s total annual remuneration (fixed, variable and long-term components) and
  - the average full-time equivalent remuneration (4) for 2019 of VINCI SA’s employees, not including company officers (Ratio A) is equal to 41.3;
  - the median full-time equivalent remuneration (4) for 2019 of VINCI SA’s employees, not including company officers (Ratio B) is equal to 73.8.

The indicators mentioned in Article L.225-37-3 recorded the movements shown in the table below over the past three years:

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


At the Shareholders’ General Meeting of 9 April 2020, in accordance with Article L.225-37-2 of the French Commercial Code, shareholders will be asked to vote on draft resolutions setting out the remuneration policy for company officers, as presented in the following tables.

Remuneration policy for the members of the Board of Directors

Remuneration policy for Xavier Huillard, Chairman and Chief Executive Officer

Remuneration paid in 2019 or due in respect of this same year to the company officers

Decisions relating to the Chairman and Chief Executive Officer’s remuneration


Short-term variable remuneration due in respect of 2019 to the Chairman and Chief Executive Officer

At its meeting of 4 February 2020, 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 2019.

Economic part
The following movements were recorded for the indicators relating to economic performance in 2019:

Part based on managerial and ESG performance
At its meeting of 4 February 2020, the Board approved the recommendations of the Remuneration Committee and the Appointment and Corporate Governance Committee, which had examined managerial and ESG performance in detail.

The analysis of these performance factors led the Board to decide on the allocation of the following amounts:
   - €260,000 in respect of managerial performance;
   - €384,000 in respect of ESG performance.

In reaching this determination, the Board made the following observations:

These achievements led the Board to set the performance-based remuneration for these criteria as follows:

Total short-term variable remuneration for 2019

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

At its meeting of 17 April 2019, the Board decided to grant a conditional award to Mr Huillard, corresponding to a maximum of 32,000 VINCI shares. At that time, the fair value of this award was €2,394,880. All or some of the shares in question will vest at the end of a three-year period on 17 April 2022, subject to continued service as well as performance conditions that will be evaluated at 31 December 2021 as described in paragraph 5.4.2, page 174.

Vested awards under the long-term incentive plans set up on 19 April 2016 and 20 April 2017


Plan set up on 19 April 2016
At its meeting of 5 February 2019, the Board noted that the fulfilment of performance conditions under the long-term incentive plan set up on 19 April 2016 meant that 97.27% of shares in the award would vest (see paragraph 5.4.1, page 174). Accordingly, the Board decided that 25,290 of the 26,000 shares initially included in the award granted to Mr Huillard would vest at 19 April 2019.

Plan set up on 20 April 2017
At its meeting of 4 February 2020, the Board noted that the performance conditions under the long-term incentive plan set up on 20 April 2017 had been met at 99.694% (see paragraph 5.4.1, page 174). Accordingly, the Board decided that 29,908 of the 30,000 shares initially included in the award granted to Mr Huillard would vest at 20 April 2020.

Long-term incentive plans for which Mr Huillard is eligible
It should be noted that the vesting of awards under the plans set up on 19 April 2016 and 20 April 2017 was 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, which are described in paragraph 5.4.1, page 174.

Mr Huillard is eligible to receive awards under the following long-term incentive plans remaining in force at 31 December 2019:

Pension and insurance plans

At 31 December 2019, Mr Huillard met all eligibility requirements 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 pension benefits Mr Huillard would be entitled to receive at 31 December 2019 are subject to a payment limit equal to eight times the annual French social security ceiling, which corresponds to the upper limit for pensions under this plan.

With respect to the defined benefit pension plan mentioned in paragraph 4.1.3, page 162, 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

Chairman and Chief Executive Officer’s remuneration


Summary of remuneration and share awards granted (in €)

Summary of remuneration (in €)

Items of remuneration paid in 2019 or due in respect of this same year to the executive company officer, subject to approval at the Shareholders’ General Meeting of 9 April 2020

At the Shareholders’ General Meeting of 9 April 2020, 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 paid in 2019 or granted in respect of this same year to Mr Huillard, Chairman and Chief Executive Officer.

Commitments requiring the approval of shareholders at the Shareholders’ General Meeting

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:

Remuneration due and/or paid to non-executive company officers in 2019

The total amount of remuneration paid in 2019 by the Company to non-executive company officers as Board members (for the second half of 2018 and the first half of 2019) was €1,232,662. Some company officers also received remuneration in 2019 from companies controlled by VINCI.

The total amount of remuneration payable by VINCI to non-executive company officers as Board members in respect of the 2019 financial year is €1,332,495.

The table below summarises the remuneration received by non-executive company officers of VINCI as Board members, as well as the other remuneration they received, in 2018 and 2019.

Remuneration paid to non-executive company officers (in €)

VINCI shares held by company officers

VINCI shares held by company officers

In accordance with the Company’s Articles of Association, each Board member (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 2019 (€99.00), amounts to a minimum of €99,000 invested in VINCI shares. The number of shares held by each of the company officers, as declared to the Company, is included in the information presented in paragraph 3.2, pages 142 to 149.

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 2019:

 

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

Last updated: 07/04/2020