Fiscal 2022 Universal Registration Document

6.5 Compensation

The disclosure provided in this section complies with:

• the requirements concerning Corporate Officers’compensation introduced by ordonnance 2019-1234 of November 27, 2019 issued pursuant to France’s Business Growth and Transformation Act dated May 22, 2019 (the “PACTE Act”);
• the recommendations contained in the AFEP-MEDEF Code as revised in January 2020; and
• the recommendation DOC-2012-02 issued by the French securities regulator (AMF) concerning corporate overnance and executive compensation in listed companies.

Established by the Board of Directors on the basis of recommendations made by the Compensation Committee, this section describes:

• the compensation policy for Corporate Officers;
• the components of the compensation paid or awarded to the Chairwoman of the Board of Directors and Chief Executive Officer and the Company’s directors;
• the compensation policy applicable to members of the Executive Committee; and
• the Group’s long-term incentive plan.

6.5.1 Compensation policy for Corporate Officers

The compensation policy applicable to Corporate Officers (Chairman or Chairwoman, Chief Executive Officer and members of the Board of Directors) sets out the principles and criteria used to determine, allocate and award the fixed, variable and exceptional components of the total compensation and benefits payable for the duties performed under the terms of their corporate office.

This policy is reviewed annually by the Board of Directors, on the basis of recommendations made by the Compensation Committee. The policy is in Sodexo’s best interests, and fully inline with Group strategy. Consequently, the principles and criteria used to determine the Chief Executive Officer's variable compensation align his/her interests with those of the Company's shareholders and other stakeholders by factoring in performance targets based on economic, financial, social and environmental indicators such as employee health & safety, talent management and corporate responsibility performance.

The principles and criteria in the compensation policy for Corporate Officers will apply in Fiscal 2023 to all persons who hold a Corporate Officer position within the Company.

The Compensation Committee is entirely comprised of independent directors, except for one director representing employees in accordance with AFEP-MEDEF recommendations. It may use the services of external advisors specialized in Corporate Officer compensation and also takes into account feedbacks from discussions with institutional shareholders.

However, in accordance with article L.22-10-8 III of the French Commercial Code, the Board of Directors, based on the recommendations of the Compensation Committee, may, under exceptional circumstances, waive the application of the compensation policy during the fiscal year, until an amended compensation policy is approved by the next Annual Shareholders Meeting, provided the waiver is temporary, in the Company’s best interests and necessary to securing the Company’s sustainability or viability. Examples of exceptional circumstances include a significant change in the Corporate Officers’ scope of responsibility, a major event impacting Sodexo’s markets and/or main competitors (market downturn, pandemic, etc.), a major change in the Group’s scope of consolidation following a merger, acquisition or disposal, or the creation or termination of a significant business activity or a change in accounting principles. If such a specific situation were to occur, the adjustments made to the compensation policy for Corporate Officers would be publicly disclosed.

Pursuant to article L.22-10-8 II of the French Commercial Code, the compensation policies for Sodexo’s Corporate Officers will be submitted for approval at the Ordinary Annual Shareholders Meeting to be held on December 19, 2022.