APC 2004 Annual Report Download - page 39

37
The key control points concern the preparation and
validation of the statement of changes in sharehold-
ers' equity and the statement of cash flows.
Lastly, Corporate Management Control and Accoun-
ting Department analyzes consolidated data and the
contribution of each Group entity.
Corporate Management Control and Accounting
Department is responsible for providing assurance
concerning:
The proper application of Group accounting princi-
ples and policies.
The integrity of the consolidation system database,
which the unit is responsible for administering and
maintaining.
The quality of accounting processes and data.
The department drafts and updates the financial
reporting procedures and guidelines required to pro-
duce high quality information. These procedures and
guidelines are available for consultation by all employ-
ees concerned on the Group intranet. They include:
A glossary of accounting terms used in the report-
ing package, including a definition of each term.
Corporate Management Control and Accounting
Department standards manual, which includes details
of debit/credit pairings in the consolidation system.
A Group reporting procedures manual.
A manual describing the procedures to be followed
to integrate newly-acquired businesses in the Group
reporting process.
An intercompany reconciliation procedure manual.
Account closing instructions.
It also provides training to all finance staff, including in
the form of seminars for new recruits.
Interests and
compensation of corporate
officers and executives
Compensation of corporate officers
and members of senior management
The Remunerations and Appointments Committee
makes recommendations to the Board of Directors
concerning the Chairman's compensation. It also
reviews compensation for members of senior man-
agement.
The twelve-member senior management team is
organized into two committees:
The Direction and Strategy Committee, chaired by
Henri Lachmann
The Operations Committee, chaired by Jean-Pascal
Tricoire.
Members of senior management are paid a fixed
salary plus a variable bonus representing a certain
percentage of their fixed salary. Each component of
this compensation package is calculated to match
compensation paid to executives in similar compa-
nies, based on analyses and comparisons performed
by international compensation consulting firms.
The amount of the variable component depends on
the degree to which objectives set at the beginning of
the year are met and can therefore vary significantly.
The objectives concern targets based on consolidat-
ed sales and operating margin, as well as individual
objectives based on quantitative and qualitative crite-
ria. The bonuses are paid following approval of the
financial statements for the year to which they relate.
In addition, the Chairman and the other members of
senior management also benefit from stock option
plans (see above, pages 19 and 20).
Senior management compensation in 2004
In 2004, total gross compensation paid to the
Chairman and the members of senior management
amounted to 6.1 million, of which 2.3 million in
variable bonuses.
The total includes the fixed salaries and benefits paid
to members of senior management in 2004 and their
variable bonuses for 2003, paid in 2004.
The amount of the variable component was based on
corporate financial criteria, as well as on each mem-
ber's individual quantitative and qualitative objectives.
The financial criteria were based on sales, with no
bonus paid if 2003 sales represented 98% or less of
the 2002 figure, and on operating margin, with no
bonus paid if the margin stood at 11.5% or less.
6
Corporate Governance