Loreal 2011 Annual Report Download - page 54

52 REGISTRATION DOCUMENT − L’ORÉAL 2011
2Corporate governance
The Board’s composition and the way in which theBoard’s work is prepared andorganised
4.7. Holding of a minimum number of shares
Each Director owns at least 1,000shares in the Company.
The decision as to whether or not all or some of the shares
held by the Director should be registered is the responsibility
of the Director.
5. Remuneration of the corporate officers
The Directors receive attendance fees in the amount approved
by the vote at the Ordinary General Meeting, and which are
allocated as decided by the Board.
The attendance fees are divided between the Directors as
follows:
♦an equal share allocated to each Director, comprising a
fixed part and a part that varies according to the degree of
regularity in attending meetings;
♦an additional share for Review Committee members, which
amount is doubled for the committee’s Chairman.
The Board of Directors may award the Directors special
remuneration for specific assignments or projects entrusted to
them.
6. Annual review of the Board’s modus operandi
Once a year the Board carries out a formal review of its modus
operandi
, and where appropriate takes all steps considered
appropriate to improve it. The Board informs the shareholders
accordingly in the Annual Report.
7. Amendments to the Internal Rules
These Rules may be amended by a decision of the Board.
2.2.3. Specific terms and
conditions ofparticipation
by shareholders in
theAnnual General Meeting
It is to be noted, in accordance with Article12 of the Company’s
Articles of Association, that the terms and conditions of
participation by the shareholders in Annual General Meetings
are those provided for by the regulations in force, and that any
shareholder may, if the Board of Directors so decides when
calling the Annual General Meeting, participate in the meeting
by videoconference or by any telecommunication or remote
transmission means including the Internet, under the conditions
provided for by the applicable regulations at the time of their
use. Where applicable, this decision is communicated in the
meeting notice published in the Bulletin des Annonces Légales
et Obligatoires (B.A.L.O.)
, the official French gazette.
In2012, it is proposed to the shareholders to update the
Company’s Articles of Association in application of the new
regulations, whose purpose is to simplify the participation
by shareholders in Annual General Meetings. This involves
removing the reference to the irrevocable nature of proxy forms
and inserting a reference to the use of communication and
electronic signatures.
2.2.4. Principles and rules
adopted bytheBoard
ofDirectors to determine
theremuneration and
benefits of all kinds granted
to thecorporate officers
The Board refers to the recommendations of the AFEP-MEDEF
Code for the determination of the remuneration and benefits
granted to the corporate officers.
The Board of Directors constantly wishes to incite the General
Management both to maximise performance for each financial
year and to ensure that the performance is repeated and
remains steady year after year.
To ensure that the corporate officers appointed by the Board are
offered remuneration and stock options that will attract them,
motivate them, and foster their loyalty, the Board is guided in its
reflections by two clear principles:
♦cash remuneration must be modulated in accordance with
responsibilities actually exercised, and must be competitive.
It must also depend, for the determination of the variable
part, partly on the Company’s performance, and on the role
played in this performance by each of the corporate officers,
and partly on qualitative management criteria;
♦stock options are allocated to the corporate officers in order
to involve them in the long-term development of the value of
the Company and its share price on the stock market, in a
way that reflects their contribution to this increase in value.
In assessing these different components of remuneration,
reference is made to the situation of executive officers in large
international companies with the position of world leaders
and operating on similar markets. Based on this approach,
and in light of this data, the Remuneration Committee,
which became the Human Resources and Remuneration
Committee at the end of 2010, makes its proposals to the
Board, which deliberates and makes a collective decision
with regard to each proposal.
At the beginning of the year, the committee proposes to the
Board:
♦the amount of the variable remuneration relating to the
previous financial year after a review of each qualitative
and quantitative performance criterion in light of the final
results for the year. For reasons of confidentiality, the level of
performance achieved is measured precisely by the Board
but cannot be made public;
♦for the current financial year, the amount of the fixed
remuneration to be paid, and definition of the objective
(value and criteria) determining the variable remuneration.
The Human Resources and Remuneration Committee
formulates proposals for the grant of stock options to the
corporate officers appointed by the Board.