Full vesting of these shares is subject to achievement of performance conditions which will be recorded at the end of a four-year vesting period as from the grant date.
The number of fully vested shares will depend on (i) growth in comparable cosmetics sales compared to the growth of a panel of competitors, which consists in 2025 of Unilever, Procter & Gamble, Estée Lauder, Shiseido, Beiersdorf, Kenvue, Henkel, LVMH, Kao, and Coty (for 40%); (ii) on the growth in the Group's consolidated operating profit (for 40%); (iii) on the achievement of environmental and social responsibility commitments made by the Group as part of the L'Oréal for the Future programme (for 15%) and (iv) on a gender balance target in strategic positions including the Executive Committee (for 5%).
The calculation will be based on the arithmetic mean for the three full financial years of the vesting period. The first full year taken into account for assessment of the performance conditions relating to this grant is 2026.
With regard to the sales criterion, in order for all the free shares granted 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 grant 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.
With regard to the criterion relating to operating profit, in order for all the free shares granted to fully vest at the end of the vesting period, a level of growth defined by the Board but not made public for confidentiality reasons, must be achieved or exceeded. If this is not achieved, the grant 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 commitments made 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, an average of 80% of the L'Oréal for the Future Commitments must be achieved during the vesting period. If this is not achieved, the grant is reduced. No shares will vest if the average level of achievement for the L'Oréal for the Future Commitments falls below 70%.
With regard to the criterion of 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 proportion of employees of each gender in strategic positions must be at least 40%. If this is not achieved, the grant is reduced. No shares will vest in relation to this criterion if the average representation of one of the genders is below 35% over the vesting period.
The figures recorded year on year to determine performance levels are published in chapter 7.
This Plan involved 703,500 performance shares (ACAs), i.e., 0.1% of the share capital, being granted to 2,648 beneficiaries.
The conditional grant of performance shares benefitting Nicolas Hieronimus in 2025 represents 2.84% of the total number of performance shares granted and 0.004% of the share capital as at 10 October 2025.
Furthermore, 50% of the performance shares granted to Nicolas Hieronimus as a corporate officer, are subject to a further holding period of two years after the initial four-year vesting period. This holding period still applies in the case where Nicolas Hieronimus ceases to be Chief Executive Officer before the end of said holding period. If Nicolas Hieronimus continues to exercise his function as Chief Executive Officer beyond the end of the holding period, he will be required to hold his shares in registered form until the termination of his duties in accordance with section (II) of Article L. 225-197-1 of the French Commercial Code.
Nicolas Hieronimus has also formally undertaken not to enter into any risk hedging transactions with regard to the performance shares until the end of the holding period set by the Board of Directors.
Nicolas Hieronimus was not awarded any other long-term incentives in 2025.
Nicolas Hieronimus does not receive any remuneration for his role as a Director. He does not receive any remuneration as a Director of Group companies.
Nicolas Hieronimus continues to benefit, because of his classification as a senior executive during his term of office, from the supplementary social protection schemes and, in particular, the defined contribution pension scheme, and the employee benefit and healthcare schemes applicable to the Company's employees.
The amount of the employer's contributions to the employee benefit and healthcare schemes for 2025 amounted to €3,927.93, and the amount of the employer's contribution to the Defined Contribution Pension scheme amounted to €7,300.56.
Under the Defined Contribution Pension Scheme (“L'Oréal RCD”), the rights of which are strictly proportional to the contributions paid, and which benefits all employees of L'Oréal in France, the estimated amount of Nicolas Hieronimus's annual retirement pension at 31 December 2025 would be a gross amount of €8,292.
As for all other senior executives of the Group, the pension resulting from the employer contributions of the L'Oréal RCD will be deducted from the amount of the Pension Cover for the calculation of the life annuity potentially due under this plan so that these benefits are not combined.
As a reminder, the lifetime risk related to the plans resulting from Article 83, 2° of the French General Tax Code is borne by the insurer.
