The Board of Directors considers that both of these types of criteria, assessed over a long period of three full financial years, are complementary, in line with the Group’s objectives and its specificities, and should make it possible to promote balanced, continuing and sustainable growth over the long term. They are exacting but remain a source of motivation for the beneficiaries.
Pursuant to the criterion relating to sales, in order for all the free shares granted to fully vest to the beneficiaries at the end of the vesting period, L’Oréal’s comparable growth in sales must outperform the average growth in sales of the panel of competitors. This panel comprises Unilever, Procter & Gamble, Estée Lauder, Shiseido, Beiersdorf, Puig, Henkel, LVMH, Kao and Coty. 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 of Directors, 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. Below this level, 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 Management Bodies, 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 Management Bodies 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 vest in relation to this criterion if the average representation of one of the genders is less than 35% over the vesting period.
These performance conditions will apply, for all individual grants greater than 100 free shares per plan, to all shares above the hundredth share, with the exception of grants to corporate officers and members of the Executive Committee, for which they will apply to all shares.
The free grant of shares may be carried out for all Group staff without performance conditions, or for shares allocated on the basis of cash subscriptions carried out as part of a share capital increase reserved for Group employees pursuant to the nineteenth and twentieth resolutions put before this General Meeting or, if applicable, pursuant to any similar resolutions that may supersede those resolutions during the period of validity of this delegation.
Any allocations of shares to the directors and corporate officers will be decided by the Board of Directors on the basis of the proposals of the Human Resources and Remuneration Committee after assessment of their performance.
50% of the performance shares granted to the corporate officers of L'Oréal, with a four-year vesting period, are subject to a further holding period of two years. This holding period still applies in the case where the beneficiaries cease to be corporate officers before the end of the holding period. If the beneficiaries continue to exercise their functions as corporate officers beyond the end of the holding period, they will be required to hold their shares in registered form until the termination of their duties.
Eighteenth resolution: authorisation granted to the Board of Directors to carry out free grants of existing shares and/or shares to be issued, with cancellation of shareholders’ preferential subscription rights, to employees and directors and corporate officers
The General Meeting, voting in accordance with the quorum and majority conditions required for Extraordinary General Meetings, having reviewed the Report of the Board of Directors and the Special Report of the Statutory Auditors, and acting in accordance with Articles L. 225-197-1 et seq. of the French Commercial Code:
- authorises the Board of Directors to carry out, on one or several occasions, free grants of existing Company shares or shares to be issued in the Company to employees, Directors and corporate officers of the Company and of French and non-French affiliates within the meaning of Article L. 225-197-2 of the French Commercial Code, or to certain categories of said employees, Directors and corporate officers;
- sets the validity period of this authorisation, which may be used on one or several occasions, at twenty-six months from the date of the General Meeting, and notes that this authorisation renders ineffective the unused portion of any prior authorisation for the same purpose;
- decides that the number of free shares granted may not represent more than 0.6% of the share capital recorded on the date of the Board of Directors’ decision, it being specified that this maximum number of shares, existing or to be issued, does not include the number of additional shares that may be allocated as the result of an adjustment in the number of shares initially granted following a transaction on the Company’s share capital;
- resolves that the amount of the share capital increases that may be carried out pursuant to this resolution will be included in the overall ceiling set out in the eighteenth resolution approved in the Meeting on 29 April 2025, or, as applicable, the ceiling set out in a similar resolution that may potentially supersede this eighteenth resolution during the period of validity of this delegation;
- decides that the number of free shares granted to the Company’s corporate officers during a financial year under this resolution may not represent more than 10% of the total number of free shares granted during the same financial year;
- decides that the Board of Directors shall determine the identity of the beneficiaries of the allocations and the number of free shares granted to each one as well as the conditions to be met in order for the allocation to become binding, and notably the performance conditions, it being stated that the free grant of shares may be carried out without performance conditions as part of an allocation made (i) for the benefit of all employees, Directors and corporate officers of the Company and, if applicable, of its French and non-French affiliates, or (ii) for the benefit of employees, Directors and corporate officers of non-French companies subscribing to a capital increase carried out pursuant to the eighteenth and nineteenth resolutions put before this General Meeting or, if applicable, pursuant to any similar resolutions that may supersede these eighteenth and nineteenth resolutions during the period of validity of this delegation, or taking part in an employee shareholder transaction through the disposal of existing shares, or (iii) for the benefit of employees that are not members of the Executive Committee for a maximum of 100 free shares allocated as part of each of the plans decided by the Board of Directors;
- decides (i) that the grant of such shares to their beneficiaries, for all or part of the shares granted, will become final and binding subject to satisfying the other conditions set at the time of the grant, at the end of a minimum vesting period of four years, and (ii) that the Board of Directors may set, and if applicable decide the duration of, a holding period for the vested shares;
- decides that the grant of these shares to their beneficiaries will become final and binding prior to the expiry of the above-mentioned vesting periods in the event of disability of the beneficiary corresponding to a classification in the second or third categories provided for in Article L. 341-4 of the French Social Security Code (Code de la sécurité sociale) and that such shares will be freely transferable in the event of disability of the beneficiary corresponding to a classification in the abovementioned categories under the French Social Security Code;
- authorises the Board of Directors to carry out, where applicable, during the vesting period, adjustments to the number of shares associated with any possible transactions on the Company’s share capital under the meaning of Article L. 225-181 of the French Commercial Code, so as to preserve the rights of the beneficiaries;
- acknowledges that this authorisation automatically entails, for the benefit of the beneficiaries of the free shares, the waiver by shareholders of their preferential subscription rights and of the portion of the reserves, profits or share premiums which, where applicable, are necessary for the issue of new shares; and
- delegates full powers to the Board of Directors, with the ability to delegate within the legal limits, to implement this authorisation.
