APC 2005 Annual Report Download - page 48

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Interests and
compensation of corporate
officers and executives
Compensation and benefits of corporate
officers and members of senior management
The Remunerations and Appointments & Corporate
Governance Committee makes recommendations to
the Board of Directors concerning the Chairman's
compensation. It also reviews compensation for mem-
bers of senior management.
The senior management team has twelve members
(see page 7).
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 companies,
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 consolidated
revenue and operating margin, as well as individual
objectives based on quantitative and qualitative criteria.
The bonuses are paid following approval of the finan-
cial statements for the year to which they relate.
French members of senior management are covered
by the Company's pension plan for senior executives.
On retiring, they will receive an annual pension of up
to 60%* of their average compensation for the three
calendar years prior to their departure (gross fixed
salary + variable compensation for the reference
years) less all pension benefits from external plans.
Their total pension is capped at 25% of their average
reference compensation. The surviving spouse pen-
sion is equivalent to 60% of this amount.
Non-French members of senior management are cov-
ered by funded pension plans in line with market prac-
tices in their home countries.
In addition, the Chairman and the other members of
senior management benefit from stock option plans
(see above, pages 26 to 28).
* 50% + 1% each year as from the sixth year of participation in the
plan, capped at 60%.
Senior management compensation in 2005
In 2005, total gross compensation paid to the Chair-
man and the members of senior management
amounted to 7.7 million, of which 3.5 million in vari-
able bonuses. The total includes the fixed salaries and
benefits paid to members of senior management in
2005 and their variable bonuses for 2004, paid in
2005.
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 2004 sales represented 102.5% or less
of the 2003 figure, and on operating margin, with no
bonus paid if the margin stood at 12% or less.
Chairman’s compensation, benefits and
stock options
Compensation
Compensation paid to Henri Lachmann includes a
fixed salary and a variable component ranging from
0% to 250% of his basic fixed salary. The variable por-
tion is based on targets concerning revenue and oper-
ating margin and on the achievement of individual
objectives.
In 2005, Group companies paid Mr. Lachmann a fixed
salary of 800,000.
The variable portion for 2004, paid in 2005, totaled
1.4 million.
The variable portion for 2005, to be paid in 2006,
amounted to 1.62 million.
In addition, in 2006 Mr. Lachmann was paid atten-
dance fees for 2005 of 60,000 by Schneider Electric
SA. In 2005, he was paid attendance fees for 2004 of
55,400.
Benefits
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 (see above). On retiring,
he will receive a maximum annual pension equal to
25% of his average compensation for the three calen-
dar years prior to his departure. The surviving spouse
pension is equivalent to 60% of this amount.
No other payments of any kind are due if he steps
down as Chairman.
Stock options
In 2005, 200,000 options, with an exercise price of
60.78 and expiring in 2013 were granted to Henri
Lachmann under plan number 26, the annual plan for
2005. Another 150,000 options with an exercise price
of 72.10 and expiring in 2013 were granted to Mr.
Lachmann under plan number 27, the annual plan for
2006. The exercise of these options is dependent on
certain conditions being met.
Mr. Lachmann, who was granted options under plans
15 through 21, 24, 26 and 27, exercised 46,700
options at a price of 50.86 under plan number 15
during the year.
As of January 1, 2006, Mr. Lachmann held 1,071,300
options, of which 650,000 are contingent on Group
performance targets being met.
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