Pursuant to the criterion relating to sales, in order for all of the free shares granted to beneficiaries to fully vest at the end of the vesting period, L'Oréal must outperform the average growth in sales of the panel of competitors. If this is not achieved, the number of shares that fully vest is reduced. If L'Oréal's comparable growth in sales is lower than the average growth in sales of the panel of competitors, no shares will be fully vested under this criterion.
Pursuant to the criterion related to operating profit, a certain level of growth, defined by the Board, but not made public for confidentiality reasons, must be met or exceeded in order for all free shares granted to fully vest to the beneficiaries at the end of the vesting period. If this is not achieved, the number of shares that fully vest is reduced. If the operating profit does not increase in absolute value over the period, no shares will fully vest in relation to this criterion.
With regard to the criterion of fulfilling objectives defined under the L'Oréal for the Future programme, in order for all the free shares granted to fully vest to the beneficiaries at the end of the vesting period, a specific level of achievement for each L’Oréal for the Future Objective, defined by the Board and made public, must be reached on average over the vesting period. If this is not achieved, the grant is reduced. If the average achievement level for each L’Oréal for the Future Objective is below a certain minimum level, as defined by the Board and made public, no shares will fully vest under this Objective.
Pursuant to the criterion relating to gender balance in strategic positions, in order for all the free shares granted to fully vest to the beneficiaries at the end of the vesting period, the average gender quota in strategic positions must be a minimum of 40% of members that are the same gender. If this is not achieved, the grant is reduced. No shares will fully vest in relation to this criterion if the average representation of one of the genders is below 35% over the vesting period.
The results recorded each year to determine the levels of performance achieved are published in chapter 7.
A corporate officer will lose their rights to the performance shares granted to them if either of the following events occurs before the end of the applicable vesting period:
If a corporate officer retires before the end of the vesting period (liquidation of statutory and compulsory supplementary pension schemes), they will retain their rights to performance shares.
If an executive corporate officer is dismissed, the Board of Directors will decide, pursuant to the provisions of the AFEP-MEDEF Code, on the outcome of any performance shares granted.
Where the benefit of performance shares granted to the executive corporate officer is maintained in the event of his or her departure prior to expiry of the vesting period, it is motivated by the following considerations:
| Performance share plan dated: | 14 October 2020 | 7 October 2021 |
|---|---|---|
| Arithmetic mean of performances across the three financial years concerned | 2021 - 2022 - 2023 | 2022 - 2023 - 2024 |
|
For 50%: Growth in like-for-like sales as compared to a panel of competitors* |
For 50%: Growth in like-for-like sales as compared to a panel of competitors* 14 October 2020+6.7 points |
For 50%: Growth in like-for-like sales as compared to a panel of competitors* 7 October 2021 +5.03 points |
|
For 50%: Growth in the Group's operating profit |
For 50%: Growth in the Group's operating profit 14 October 2020+16.2% |
For 50%: Growth in the Group's operating profit 7 October 2021 +12.29% |
| Level of achievement of the performance conditions | Level of achievement of the performance conditions14 October 2020100% | Level of achievement of the performance conditions 7 October 2021 100% |
* Panel of competitors: Unilever, Procter & Gamble, Estée Lauder, Shiseido, Beiersdorf, Kenvue, Henkel, LVMH, Kao, Coty.
