APC 2009 Annual Report Download - page 105

2009 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 103
CORPORATE GOVERNANCE
3
APPLICATION OF THE AFEP-MEDEF CORPORATE GOVERNANCE GUIDELINES
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11. Application of the AFEP-MEDEF
corporate governance guidelines **
Schneider Electric applies the AFEP-MEDEF corporate governance guidelines with the following exceptions:
Recommendation Schneider Electric practice
Deadline for Audit Committee review
ofthe fi nancial statements
The Audit Committee should review
thefi nancial statements at least two days
before they are reviewed by the Board.
At Schneider Electric, the Audit Committee reviews the fi nancial statements the day before
the Board meeting because one of the Committee members lives outside France. However,
the Committee members receive a meeting fi le with the fi nancial statements four to fi ve days
before the meeting.
Compensation and benefi ts paid
tocorporate offi cers
Fixed salary should be revised only
afterarelatively long period, such as
threeyears.
The Management Board members’fi xed salary is revised each year. When Jean-Pascal Tricoire
became Chairman of the Management Board and CEO, his compensation was not (and still
is not) aligned with that of CEOs of comparable companies. The Board decided to reduce the
gap gradually through annual salary revisions after reviewing Mr Tricoire’s performance. In light
of the economic situation, the Supervisory Board decided to freeze Mr Tricoire’s fi xed salary in
2009 on Mr Tricoire’s recommendation.
Top-hat pension plan
The increase in potential rights should
correspond to a limited percentage
ofthebenefi ciary’s compensation.
Under the top-hat pension plan for Schneider Electric senior executives (see page88 ), most
rights are originally acquired . However, the plan complies with the recommendation’s intention,
given that:
• the rights are capped at 25% of average compensation;
• the current members still have many years of service to perform before they can benefi t
from the plan.
Upon expiration of their terms of offi ce,
selection of the Statutory Auditors
or extension of their terms should
bepreceded by a tender offer
On the basis of the Audit Committee’s analysis and recommendations, the Supervisory Board
has decided to ask shareholders to reappoint the Statutory Auditors at the Annual Meeting
without conducting a tender offer. The analysis notes that:
• in accordance with the provisions of France’s Loi de Sécurité Financière (LSF), the signing
partners from both auditing fi rms will have been reappointed in 2009 and 2010;
• in addition to the current economic and fi nancial crisis, the Company has completely
revamped its managerial structure and organisation . In this environment, the Statutory
Auditors’past knowledge of the Group enhances security.