Fiscal 2020 Universal Registration Document

members’ fixed compensation by 10% for the second half of Fiscal 2020, and to suppress the variable compensation for Fiscal 2020. This decision received the full support of the Executive Committee members, and allows them to express their solidarity with the Group’s employees. The amounts not paid for the fixed and variable compensation financed the creation of the Sodexo Employee Relief Program in April 2020 to help address some of the social and economic consequences of the Covid-19 pandemic.

Total compensation paid during Fiscal 2020 by the Group to members of the Executive Committee in office as of August 31, 2020 (including the Chief Executive Officer, details of whose compensation are provided in section 5.5.2.2 of this document), amounted to 13,896,618 euro.

This amount comprises:

• a fixed salary of 8,052,431 euro;
• a variable portion of 5,844,187 euro (comprising the Fiscal 2019 variable compensation and travel allowance paid during Fiscal 2020 amounting to 54,382 euros).

No restricted share plan was granted to members of the Executive Committee during the 2019-2020 financial year.

5.5.5 Description of the long-term incentive plan – Restricted share plans

Sodexo’s long-term incentive policy has two objectives:

• to incentivize the Group’s executives, managers and other employees by aligning their financial interests with those of Sodexo’s shareholders;
• to attract and retain the intra-entrepreneurs needed to expand and strengthen Sodexo’s market leadership.

Since Fiscal 2013, long-term incentive plans have consisted exclusively of restricted share plans.

In the eighteenth resolution adopted at the Annual Shareholders Meeting on January 22, 2019, the Company’s shareholders renewed the authorization given to the Board of Directors to grant, on one or more occasions, restricted shares – either in the form of existing or new Sodexo shares – to employees and Corporate Officers of the Group.

The terms and conditions of the restricted share plans (including the related continued presence and performance conditions) and the list of beneficiaries are determined by the Board of Directors based on recommendations issued by the Compensation Committee.

As from the 2020 plans, the terms and conditions of the restricted share plans set up within the Group are as follows:

• the restricted share grants take place annually and are decided during the first quarter of each fiscal year, after the publication of the financial statements for the previous fiscal year ;
• vesting of the shares is subject to a three-year continued presence condition for each beneficiary and to performance conditions assessed over a three-year period.

The restricted share grants have no dilutive impact for shareholders as the shares concerned are treasury shares held by the Company.

During Fiscal 2020, the vesting periods of the restricted share plans set up by the Board of Directors on December 1, 2015 and April 27, 2016 ended on December 1, 2019 and April 27, 2020 respectively.

The plan set up on December 1, 2015 included the following two performance conditions:

• a condition that Sodexo’s Total Shareholder Return (TSR) had to increase by 20% over three years;
• a condition that Group net income had to increase by an average of at least 6% per year over three years.

These performance conditions were met (54% TSR growth and a 14% annual average increase in Group net income).

Consequently, on December 1, 2019, 9,100 shares vested under the international plan set up on December 1, 2015.

The restricted share plan set up on April 27, 2016 included the following two performance conditions:

• a condition that Sodexo’s TSR had to outperform the CAC 40 GR index by 12% over a four-year period;
• a condition that average growth in Sodexo’s operating profit had to amount to at least 10% per year over four years.

These performance conditions were not met, as Sodexo’s TSR increased by 25% versus 58% for the CAC 40 GR index, and average annual growth in operating profit was 3.5%.

Consequently, on April 27, 2020, 445,637 shares vested under the international plan set up on April 27, 2020.

Lastly, as part of the restricted share plan set up in June 2019, at its meeting on November 6, 2019, the Board of Directors decided to make an additional grant of restricted shares. These shares will vest on June 19, 2023 provided that the continued presence condition and any applicable performance conditions are met. This grant concerns 11 employees and 10,000 shares.