APC 2013 Annual Report Download - page 171

CORPORATE GOVERNANCE
APPLICATION OF THE AFEP/MEDEF CORPORATE GOVERNANCE GUIDELINES
Application of the AFEP/MEDEF 10.
corporate governance
guidelines**
Schneider Electric applies the AFEP/MEDEF corporate governance guidelines with the following exceptions:
Recommendations Schneider Electric practice
Deadline for Audit committee review At Schneider Electric, in order not to extend delays between the
ofthefinancialstatements closing of financial statements by the management board and the
review by the supervisory board, the Audit committee which would
The Audit committee should review the financial statements at review the Financial Statements would meet after the management
least two days before they are reviewed by the board. board meeting that approves the Financial Statements and the
day before the board director’s meeting.
However, the Committee members would receive a meeting file
with the draft Financial Statements four to five days before the
meeting to the members of the supervisory board.
The period of examining the interim financial statements by the
Audit committee was four days before examination by the board of
directors.
3
Top-hat pension benefits Under the top-hat pension benefits for the Group’s Senior
Management (see page….), from which the senior corporate
The increase in potential rights should correspond to a limited officers benefit, stipulates that most rights are acquired at the
percentage of the beneficiary’s compensation. outset. However, the plan complies with the recommendation’s
intention, given that:
the rights are capped at 25% of average compensation;
l
the interested parties still have many years of service to perform
l
before they can receive benefits.
Furthermore, the plan was changed in compliance with the
AFEP/MEDEF recommendations. This modification was approved
at the General Meeting of May3, 2012.
Non-compete agreement The non-competition agreement of executive directors provides
that a mutual agreement is necessary to repeal the non-compete
The non-compete agreement must include a provision authorizing requirement only in the case of voluntary resignation and subject
the board to waive its implementation upon the departure of the to the condition that the performance conditions are met and that
member of Senior Management. The board decides on the the senior manager does not or will not have rights to or is not or
application of the agreement at the time of departure of the senior will not be in a position to accumulate the non-compete indemnity
manager, particularly when he leaves the company to assert or with the payment of a pension.
asserting his rights on retirement. This exception to the AFEP/MEDEF recommendation is justified by
the fact that it is in the interest of the company to put forward the
rule according to which the board will call the non-compete clause
into play. It appears that this rule may help prevent poaching
attempts by competitors or to prevent a person who wants to
resign from directing his or her employment search towards
competitors of Schneider Electric.
Involuntary Severance Pay To avoid the duplication of involuntary severance pay and pension
benefits, it is expected that if the person is entitled to receive
The payment of severance pay to a senior corporate officer must compensation, the date of effect of his top-hat pension rights from
be excluded if he has the possibility of asserting his pension rights the company is delayed by two years in this case.
in the short term.
Allocation of options or performance shares Given the significant fluctuations in the market price of Schneider
The valuation of options and performance shares allocated must Electric stock and to prevent a windfall effect, the board continues
to apply the old AFEP/MEDEF recommendations in its decisions;
not depart from previous business practices. in other words, its reasoning is based on the number of shares
and not on their value. However, the board reserves the possibility
to carry out a calculation of consistency in value on a certain
length of time.
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2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC