Loreal 2011 Annual Report Download - page 185

183REGISTRATION DOCUMENT − L’ORÉAL 2011
Corporate social, environmental and societal responsibility
6
Social information
Incentive at L'Oréal parent company
The I ncentive system is governed by French law but is a non-
mandatory system. It was set up as part of a Group agreement
in France in1988 and was renewed in2009. The I ncentive
amount is proportional to the pre-tax profit on ordinary
operations after exceptional items, and weighted on the basis
of the salary/value added ratio.
The I ncentive amount is available immediately, but may also be
frozen in the Company savings plan for five years and benefit
from a corresponding tax exemption.
Within the framework of the new regulations on sharing profits
(Article1 of French Law No.2011-894 of July28th, 2011), L’Oréal
proposed the payment of an A dditional I ncentive amount in
respect of the “non-mandatory monetary benefits” provided for
by the legislation, linked with the increase in the dividend per
share paid in2011 in respect of the results for2010.
L’Oréal chose to propose the payment of an A dditional
I ncentive amount as it corresponds to the system which is the
closest to the notion of “value sharing”.
A company-level agreement was thus entered into with the
Central Works Council of L’Oréal on October6th, 2011.
This A dditional I ncentive payment has led to an increase of
+6.5% in the amount of I ncentive payments made in2011. It
was paid on December31st, 2011.
Changes in gross I ncentive amounts at L’Oréal parent company :
€ thousands 2007(1) 2008(1)(2) 2009(1)(2) 2010(1)(2)
L’Oréal parent company 51,766 55,236 57,358 58,809
(1) Paid the following year.
(2) Amounts after the “forfait social” levy.
For an annual gross salary of:
The gross Incentive amount for2010
paid in2011 represented
Additional Incentive payment
to “share in profits for 2011” Total
€25,000 €6,674 i.e. 3.2months €474 €7,148 i.e. 3.4months
€35,000 €7,853 i.e. 2.7months €558 €8,411 i.e. 2.9months
€45,000 €9,032 i.e. 2.4months €642 €9,674 i.e. 2.6months
€65,000 €11,390 i.e.2.1months €810 €12,200 i.e. 2.3months
Profit Sharing , Incentive and M andatory Profit
Sharing schemes
For many years, L’Oréal’s policy has been to associate employees
with the results of the Company, which lead to a pay-out of €204.3
million in2011.
L’Oréal has implemented a worldwide incentive scheme that
is related to the results of its subsidiaries (WPS –
Worldwide Profit
Sharing programme
),which is aimed at making employees
feel that they are part of the Company and enhancing their
motivation.
Compliance with the principles and rules of this programme
is coordinated, at Corporate level, by the Social Relations
Department, with the involvement of General Management and
Human Resources Departments in the z ones, and the Human
Resources Department and General Management at Group
level. The implementation and management of the programme
are carried out locally by the General Management of each
subsidiary.
In addition to the systems of M andatory Profit Sharing , I ncentive
and Profit Sharing schemes for employees, the Group has for
many years granted stock options in an international context, in
order to associate those who have made big contributions with
the future evolution of the Group’s results and instil a stronger
Group spirit.
In2009, L’Oréal enlarged its policy by introducing a mechanism
for the conditional grant of shares to employees (ACAS), in order
to reach out to a broader population of potential beneficiaries,
thanks to a long-term simulation tool that is more motivating
than stock options.
In2011, the Group decided to enlarge the operation for the
conditional grant of shares to employees even further.
In all, nearly 2,800 employees,
i.e . approximately 14% of the senior
managers in the world, benefit from at least one stock option
plan or plan for the conditional grant of shares, according to
the terms and conditions set out in paragraphs 7.3.7. to 7.3.9.
on pages 214 et seq .