APC 2003 Annual Report Download - page 42

The bonuses are paid following approval of the finan-
cial statements for the year to which they relate.
To involve senior executives more closely in the
growth and development of Schneider Electric’s busi-
ness, their variable bonuses represent a greater pro-
portion of their total compensation than is the prac-
tice among other manufacturing companies. In addi-
tion, Executive Committee members also benefit
from stock option plans (see above, pages 23 / 24).
Executive compensation in 2003
In 2003, total gross compensation paid to the mem-
bers and the Chairman of the Executive Committee
amounted to €4.5 million, of which €1.3 million in
variable bonuses.
The total includes the Executive Committee mem-
bers’ fixed salaries and benefits for 2003 and their
variable bonuses for 2002, paid in 2003.
The amount of the variable component was based on
corporate financial criteria, as well as on each mem-
ber’s individual quantitative and qualitative objec-
tives.
The corporate financial criterion for 2002 was based
on operating income, with no bonus if operating
income did not exceed €944 million.
Compensation of the Chairman
Compensation paid to Henri Lachmann includes a
fixed salary and a variable component.
In 2003, Group companies paid Mr. Lachmann a
fixed salary of €731,800, unchanged from 2002.
The variable portion for 2003, in a gross amount
of €1,039,000, was based on targets concerning
sales and operating margin, as well as on individual
objectives. The variable portion for 2002 totaled
€538,600.
In addition, Mr. Lachmann received attendance fees
for 2003 of €53,700 from Schneider Electric SA.
Mr. Lachmann’s benefits include a chauffeur-driven
Company car. He is also covered by the Company’s
pension plan for senior executives, under the plan’s
general terms and conditions. On retiring, he would
receive a maximum annual pension equal to 25% of
his average compensation for the three calendar
years prior to his departure.
No other payments of any kind are due if he steps
down as Chairman.
Compensation of board members:
attendance fees and other compensation
At the combined Annual and Extraordinary Share-
holders’ Meeting of June 11, 2001, the maximum
attendance fees payable to Directors was set at
€640,000.
The Board of Directors decided that the fees would
be allocated among Directors as follows:
- Each Director is awarded one half of the theoretical
fee per Director.
- Each Director who is a member of one or more
Committees of the Board of Directors is awarded an
additional one-half of the theoretical fee. The
Chairman of the Audit Committee receives two
halves.
- The balance of the total attendance fees is then
shared among all the Directors based on the number
of Board Meetings attended during the year.
In application of these rules, attendance fees paid to
members of the Board for the year ended December
31, 2003 totaled €569,000.
By Director, this amount was paid as follows (in thou-
sands of euros):
Claude Bébéar: 41.3 – Daniel Bouton: 36.0 – Thierry
Breton: 33.0 – Alain Burq: (none) – Michel François-
Poncet: 50.6 – Hans Friderichs: 36.0 – James F.
Hardymon: 53.6 – Willy R. Kissling: 39.0 – Gérard de
La Martinière: 68.0 – René Barbier de La Serre: 53.6
– James Ross: 50.6 – Piero Sierra: 53.6
Alain Burq has an employment contract with
Schneider Electric Industries SAS, through which he
receives compensation comprising a fixed salary and
a variable component (bonus and profit-linked incen-
tive plan). He has relinquished his share of atten-
dance fees.
7. Agreements involving
Directors
(See auditors’ special report). No agreements involv-
ing directors were entered into during 2003 or after
the close of the year.
Corporate Governance
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