In the event of termination of the suspended employment contract during the exercise of the term of corporate office, and depending on the reasons for such termination, the executive corporate officer would only be paid termination indemnities, except in the event of gross misconduct or gross negligence, or retirement indemnities in the event of voluntary retirement or retirement at the Company's request pursuant to the suspended employment contract excluding any indemnity due in respect of the corporate office.
These indemnities, which are attached solely to termination of the employment contract and in strict application of the National Collective Bargaining Agreement for the Chemical Industries (Convention Collective Nationale des Industries Chimiques) and the company-level agreements applicable to all L'Oréal managers, are automatically due pursuant to the public policy rules of French labour law. They are not subject to any condition other than those provided for by the National Collective Bargaining Agreement for the Chemical Industries or the above-mentioned company-level agreements.
In the event of termination of the employment contract, financial consideration for the non-compete clause would be paid under the terms of said contract, pursuant to the provisions of the National Collective Bargaining Agreement for the Chemical Industries, unless the executive corporate officer were to be released from application of the clause. This clause does not apply in the event of voluntary retirement or compulsory retirement on the Company's initiative: no consideration for non-competition would be paid in such a situation.
Subject to completing their career within the Company, the executive corporate officer will benefit from one of the Group’s defined benefit pension schemes for senior executives. This is the scheme of which they were a member in their capacity as an employee.
These defined benefit schemes were established by L'Oréal with the primary objective of attracting and retaining the Company's senior executives by guaranteeing them a defined level of retirement income.
The Group operates two types of defined benefit schemes:
These schemes cover more than 500 current or retired L'Oréal's senior executives in France. They are funded by contributions paid to an insurer, which are deductible for corporate tax purposes and subject to an employer contribution provided for in Article L. 137-11, I-2° a) of the French Social Security Code for the non-vested-rights schemes (i.e., at a rate of 24%), or Article L. 137-11-2 for the vested-rights schemes (i.e., at a rate of 29.7%).
The precise amount of the pension annuity will only be calculated on the date when the member applies for all their retirement benefits. This timing is due to the legal characteristics of non-vested rights schemes – the rights only vest if the member completes their career within the Company and the funding cannot be individualised by member – and the specific characteristics of L'Oréal’s so-called "differential" then “additive” schemes which take into account, in order to supplement them, all the other pensions such as those resulting from the French basic and supplementary pension schemes or changes in the annual social security ceiling.
The above provisions are subject to the procedure for related‑party agreements.
For Nicolas Hieronimus, an agreement suspending his employment contract was approved by the General Meeting of 20 April 2021 (15th resolution). This mechanism is restated every year in the present chapter and in the Statutory Auditors' special report on related-party agreements.
The Board of Directors at its meeting of 20 April 2021 appointed Nicolas Hieronimus, the then Deputy Chief Executive Officer in charge of Divisions, and an employee of L'Oréal, as Chief Executive Officer following a brilliant career spanning 34 years within L'Oréal. The Board of Directors did not wish for Nicolas Hieronimus, by accepting the role of Chief Executive Officer, to lose (at the age of 57 and after 34 years with L'Oréal) the benefits to which he would have continued to be entitled had he remained an employee. Therefore, the Board adopted the following measures, which were approved by the General Meeting of 20 April 2021 as part of the procedure for related-party agreements:
The reference remuneration of Nicolas Hieronimus to be taken into account for all rights attached to the employment contract and, in particular, for the calculation of the pension under the defined-benefit scheme described below, is based on his remuneration at the date of suspension of his employment contract. This reference remuneration is €1,750,000 of fixed remuneration and €1,850,000 of variable remuneration. This remuneration will be revised annually by applying the revaluation coefficient in respect of salaries and pension contributions published by the French state pension fund (Caisse Nationale d'Assurance Vieillesse). As at 1 January 2026, it was €2,013,358 for fixed remuneration and €2,128,406 for variable remuneration.
The seniority applied covers his entire career within the Group, including the years spent as an executive corporate officer.
