This plan has been closed to new members since February 28, 2018. In order to comply with the PACTE Act and with Ordonnance of July 3, 2019 implementing the EU Pensions Portability Directive into French law, rights acquired as at December 31, 2019, were frozen at that date. As this plan is not portable, its members will only be eligible for it if they are still with Sodexo on the date they retire.
In Fiscal 2020, the Company proposed to the January 21, 2020 Annual Shareholders Meeting, to replace the defined supplemental benefit pension plan governed by articles 39 of the French General Tax Code and L.137-11-1 of the French Social Security Code with a plan governed by article L.137-11- 2 of the French Social Security Code, which would have similar characteristics.
The Compensation Committee took note of the vote by the January 21, 2020 Annual Shareholders Meeting on the twelfth resolution on the supplemental pension plan of the Chief Executive Officer as well as comments from investors.
The proposed new plan has not been implemented during Fiscal 2020 as the French Social Security Department circular concerning the financing of such plans has not yet been published. The Board of Directors will only authorize this plan if the circular provides that such plans do not result in the recognition of employee benefit plan liabilities on the Company’s balance sheet.
If the French Social Security Department circular allowing finalization of the plan governed by article L.137-11-2 of the French Social Security Code is not published during Fiscal 2021, an exceptional grant of restricted shares will be made to the Chief Executive Officer. This grant will be subject to the condition of achieving a rate of at least 80% of his annual variable compensation targets. The amount of this grant would be capped at the retirement plan contribution which would have been made in accordance with article L.137- 11-2 of the French Social Security Code, had the plan been implemented. The restricted shares grant would vest and be subject to a presence condition over three years . The value of the restricted shares grant would be calculated at the close of the Annual Shareholders Meeting to be held to adopt the financial statements of Fiscal 2021 on the basis of the average of the twenty closing share prices preceding the grant date.
The exceptional grant would also be made if the circular did not preclude the recognition of employee benefit plan liabilities on the Company’s balance sheet.
This exceptional grant would also be applicable to those members of the Executive Committee who would be included in the supplemental pension plan.
The Chief Executive Officer has the use of a Company car, the insurance, maintenance and fuel costs (related to his professional use) of which are covered by Sodexo.
The Chief Executive Officer is a member of the Company’s collective health and benefit plans, subject to the same terms and conditions as those applicable to all employees of the Group’s French entities.
As the Chief Executive Officer does not have an employment contract, the Company has subscribed to a private unemployment insurance policy with the French association of unemployment insurance for Corporate Officers (Association pour la garantie sociale des chefs et dirigeants d’entreprises – GSC). Under this policy, if the Chief Executive Officer were to lose his office, he would receive benefits for a maximum period of 24 months.
The compensation policy does not permit the granting of an exceptional compensation to the Chief Executive Officer.
If one or more Deputy Chief Executive Officers were appointed, the principles and criteria for determining, allocating and awarding the compensation components provided for in the Chief Executive Officer’s compensation policy would also apply to the Deputy Chief Executive Officer(s). In such a case, the Board of Directors, acting on the recommendation of the Compensation Committee, would adapt the principles and criteria to the person(s) concerned in order to determine the applicable targets, performance levels, conditions, compensation structures and maximum percentages of the fixed compensation that their variable compensation may represent (which may not be higher than those set for the Chief Executive Officer).
If the Chief Executive Officer were to become a member of the Company’s Board of Directors, he would not receive any directors’ compensation.
Pursuant to the recommendations of the AFEP-MEDEF Code, if a new Chief Executive Officer is recruited from outside Sodexo, the Board of Directors may decide to grant him or her an indemnity (in cash and/or shares) in order to compensate for any loss of previous compensation or benefits (excluding pension benefits).
In accordance with article L.225-37-2 of the French Commercial Code, the payment or implementation of any such compensation would be subject to shareholder approval.
The overall compensation awarded to directors (“directors’ compensation”) is made up of a fixed and variable compensation and a travel allowance for directors coming from the United States.
Directors are not eligible for any long-term compensation, supplemental pension plan or compensation or benefits that may result from any change in their duties, new duties taken on, or a loss of office.
As previously mentioned, the Chairwoman of the Board of Directors does not receive any directors’ compensation so this compensation policy does not apply to her.
