APC 2014 Annual Report Download - page 148

3CORPORATE GOVERNANCE
INTERESTS AND COMPENSATION OF GROUP SENIOR MANAGEMENT
Interests andcompensation 7.
ofGroup Senior Management
Group Senior Management (executive directors and members oftheExecutive
Committee) compensation policy
This section is included in the Chairman's report to the board of In 2014, the variable part of Executive Committee members who
directors are in charge of a business is determined as follows:
The general principles underlying compensation policy of Group 70% based on the Group’s economic performance (operating
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Senior Management and their individual analyses are reviewed by margin, organic growth, cash generation ratio) and on their
the Governance and remunerations committee, who makes respective business as well as on the completion of the Connect
proposals to the board of directors for executive directors, and by Company program (customer satisfaction rate, solutions
the Human Resources and CSR committee who then informs the development, employee development) and social and
board of directors for members of the Executive Committee. It environmental responsibility;
should be noted that the name and competence of the Human 30% based on the achievement of their measurable personal
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Resources & CSR committee were amended on May6, 2014. Until goals.
that date, the committee then named Remunerations, Human The share-based performance incentives, which are a key factor in
Resources & CSR committee was in charge of making proposals retention, are determined for each Group Senior Manager based
to the board of directors on executive directors’ remuneration. This on his/her reference market, performance and potential.
competency has been transferred to the Governance Committee
The allocation of shares is subject to performance conditions. The
then renamed on May6, 2014 Governance and remunerations
level of performance achievement is controlled by the statutory
committee.
auditors and reviewed by the Human Resources and CSR
The aims of the compensation policy for Group Senior committee and the Audit Committee. Details of these performance
Management are to: shares are set out on page283.
motivate and retain Group Senior Management in a highly
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In 2014, the variable part of executive directors is determined as
competitive international market; follows:
align overall compensation with Group’s results;
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45% based on Group economic criteria component. These
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reward their individual and collective performance.
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criteria are based on organic sales growth (15%), adjusted
Variable part of cash compensation and share-based EBITA (15%) and cash generation targets (15%);
compensation are given the heaviest weighting (stock options are 25% based on a component comprising criteria that are in line
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no longer allocated since December2009). with the Connect Company program and social and
Thus, the performance incentives, expressed in terms of a environmental responsibility, evaluated among other things
percentage of the fixed compensation, are linked to achieving through objectives linked to customer satisfaction, services
objectives set out at the beginning of the financial year. There can development, key talents development and succession plan as
be significant variation in amounts depending on the level of well as trends in Planet & Society barometer);
achievement of objectives. In 2014, this varies from 0% to 200% of 30% based on the achievement of their measurable personal
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the fixed compensation for members of the Executive Committee goals.
and from 0% to 240% for the Chairman and CEO. The
performance incentives are therefore of a distinctly random nature.
Pension benefits
This section is included in the Chairman's report to the board of The defined-benefit plan is based on:
directors top-hat pension plan for Senior Management implemented in
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The Group’s Senior Management, subject to the French Social 1995 (closed plan). This plan was closed to new entrants with
Security system, are covered by the Group’s defined-benefit effect from July1, 2012. It was outsourced to AXA in 2012;
top-hat pension plan (article39) and supplementary new top-hat pension plan for Directors who are members of the
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defined-contribution pension (article83) plans for employees Executive Committee in force on April30, 2012 (new plan) and
and/or Group Senior Management. The annuities from outsourced to AXA.
defined-contribution plans are deducted from the pension Rights under the new plan are gradually replacing those under the
supplement of the defined-benefit plan. closed plan. They are not cumulative.
146 2014 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC