APC 2011 Annual Report Download - page 126

124 2011 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC
CORPORATE GOVERNANCE
3MANAGEMENT INTERESTS ANDCOMPENSATION
Family ties
To the best of the Company’s knowledge, none of the members of the Supervisory Board or Management Board are related to each other.
Conflicts of interest
To the best of the Company’s knowledge, there are no arrangements
or understandings with major shareholders, customers, suppliers
or others pursuant to which a member of the Supervisory Board
or Management Board has been selected as a member of an
administrative, management or supervisory body or a member of
Senior Management.
To the best of the Company’s knowledge, there are no confl icts
of interest between any duties of the members of the Supervisory
Board or Management Board to the Company and their private
interests or other duties.
To the best of the Company’s knowledge, the members of the
Supervisory Board and Management Board have no restrictions
on selling their Company shares aside from those stipulated in
stock option and stock grant plans (seepage249 and following)
for Members of the Management Board and a 250 share-holding
requirement for members of the Supervisory Board.
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8. Management interests
andcompensation
Corporate officers and Executive Committee compensation policy**
The general principles underlying the Senior Management
compensation policy and the situation of each executive are
reviewed by the Remunerations and Appointments and Human
Resources Committee and presented to the Supervisory Board.
The policy’s aims are to:
•retain and motivate the best talents;
•reward individual and collective performance;
•align overall compensation with the Group’s results.
The variable remuneration, expressed in terms of a percentage
of the fi xed element, is linked to the attainment of objectives set
out at the beginning of the fi nancial year. There can be quite a
considerable variation in amounts depending on the degree of
attainment of objectives. This fl uctuation can vary from 0% to 160%
of the fi xed remuneration for Members of the Executive Committee
and 200% for the Chairman of the Management Board. The variable
remuneration is therefore of a distinctly random nature.
The variable remuneration of Executive Committee Members are
determined as follows:
•30% is determined by Group’s overall performance, as measured
in terms of operating margin, organic growth, cash generation
ratio and customer satisfaction rates;
•70% is based on the performance of the executive’s unit
(economic targets), as measured on the basis of collective
targets (solutions, the Company’s social responsibility, people
development etc.) and on the attainment of measurable personal
goal set for them.
The remuneration of the Management Board Members is set
by the Supervisory Board based on the recommendations of
the Remunerations and Appointments and Human Resources
Committee.
The variable remuneration of the Management Board Members are
determined as follows:
•70% is determined by Group’s overall performance, as measured
in terms of operating margin, organic growth, cash generation
ratio, customer satisfaction rates, corporate social responsibility
and people development);
•30% on the attainment of measurable personal performance
targets set by the Supervisory Board.
Directors benefi t from an annual long-term participation scheme
that gives them a performance-based allocation of shares, linked in
part, for Executors or those who are residents in the USA, to stock
appreciation rights (SARs) that are akin to stock options. Stock
options are no longer been allocated since December2010.
As part of this long term participation scheme, 100% of the shares
and/or SARs allocated to Members of the Management Board
since January2009 and to Members of the Executive Committee
since December 2011 are subject to a performance criterion.
The level of performance attainment recorded is controlled by the
external auditors.
Details of these stock grants are set out on pages 249, 253 (History
of share plans).