APC 2015 Annual Report Download - page 166

2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC164
CORPORATE GOVERNANCE
3INTERESTS AND COMPENSATION OFGROUP SENIOR MANAGEMENT
Involuntary Severance Pay
Mr.Tricoire and Mr.Babeau benefi t from entitlement to Involuntary
Severance Pay, at a maximum equal to twice the average of the
effective annual compensation (fi xed and variable part) (i.e. including
compensation and complementary payments) for the last three
years (in cash to the exclusion of all other components), authorized
by the board (hereafter, « Maximum Amount »), taking into account
the non-compete compensation and subject to the attainment of
performance conditions.
The right to Involuntary Severance Pay shall be granted in the
following cases:
(i) dismissal, non-renewal or resignation as CEO/Deputy CEO in
the six months following a material change in Schneider Electric’s
shareholder structure that could change the membership of the
board of directors;
(ii) dismissal, non-renewal or resignation as CEO/Deputy CEO in the
event of a reorientation of the strategy pursued and promoted by
him until that time, whether or not in connection with a change in
shareholder structure as described above;
(iii) dismissal, non-renewal or requested resignation as CEO/Deputy
CEO when, on average, two-thirds of the Group performance
criteria (to be distinguished from individual performance
objectives) have been achieved for the last four fi nancial years
from the day of his resignation (including the fi nancial years
during which he served on the management board).
Involuntary Severance Pay depends on the average rate of
achievement of the Group’s performance criteria (to be distinguished
from individual performance objectives) used to determine the
performance incentive for the last three fi nancial years preceding
the date of the b oard meeting at which the decision is made.
If the Group criteria are:
•less than 66.67% ; no compensation shall be awarded;
•66.67% ; he shall receive 75% of the Maximum Amount;
•at least 100 % ; he shall receive 100 % of the Maximum Amount;
•between 66.67 and 100 % ; he shall receive compensation
calculated on a straight-line basis at a rate of 75 to 100 % of the
Maximum Amount.
In any case, involuntary Severance Pay will not be paid if a
resignation is the result of serious or wrongful misconduct.
Retention of stock options, stock grants and
performance shares
Mr. Tricoire and Mr. Babeau shall retain, subject to performance
condition, the benefi t of their stock options, stock grants and
performance shares granted to them or that will be granted to them
in the event of Involuntary Severance during the vesting period or
prior to having exercised said options. Accordingly, it is specifi ed
that the foregoing will be applicable only provided that:
•average rate of achievement of Group performance criteria that
determine the performance incentive calculated for the last three
fi nancial years at the time of departure, is at least two-thirds of
the objective and
•resignation is not the result of wrongful or gross misconduct.
7.7 Compensation of Group Senior Management excluding executive directors
Scope of Senior Management in 2015
On December31, 2015, Senior Management includes the Chairman
and CEO and Deputy CEO, assisted by Executive Committee
members. The Executive Committee (15 members) is chaired by
the Chairman and CEO. It includes, in addition to the Chairman and
CEO and Deputy CEO in charge of Finance and Legal Affairs:
•Executive Vice-Presidents of Corporate Functions: Industrial
Operations – Information Systems – Strategy – Marketing –
Global Human Resources– Technology– Global Solutions;
•Executive Vice-Presidents of Operations: Global Operations –
North America Operations – China Operations – France
Operations– Europe Operations;
•Executive Vice-Presidents of Activities: Buildings & Partner –
Industry– IT– Energy .
Compensation paid in 2015
Gross compensation, including benefi ts in kind, paid by Group
companies in 2015 to members of Group Senior Management
other than executive offi cers, amounted to EUR 17.4 million,
including EUR 7.5 million in variable compensation paid for the 2015
fi nancial year. The objectives for Group results for the fi nancial year
in question were:
•organic growth;
•operating margin level;
•cash conversion rate ;
•customer satisfaction.
Long-term incentive plans
•Performance shares were granted in 2015.
As of December 31, 2015 as part of the annual long term incentive
plan, Group Senior Management other than senior corporate
offi cers held:
•645,570 shares, of which 484,500 are conditional;
•89,330 options;
•178,104 Stock Appreciation Rights (SARs).