The fixed compensation of the Chief Executive Officer is awarded as payment for the duties and responsibilities inherent to such a position.
The following factors are considered:
The Chief Executive Officer’s annual fixed compensation is the basis for determining his/her annual variable compensation and long-term compensation. The amount of this fixed compensation is not systematically reviewed each year.
The annual gross fixed compensation for Sophie Bellon, Chairwoman and Chief Executive Officer will be kept unchanged for Fiscal 2024, at 900,000 euros.
CALCULATION METHODS
The Chief Executive Officer’s annual variable compensation is intended to encourage the achievement of the annual performance targets determined by the Board of Directors in line with Sodexo’s strategy.
The Board of Directors, on the recommendation of the Compensation Committee, has decided to increase the variable component of the executive officer’s compensation. It now amounts to 120% of the annual fixed compensation, on full achievement of the targets and can reach 170% if these targets are exceeded.
It is based mainly on financial criteria, defined as follows:
| CRITERIA | WEIGHTING | MAXIMUM IN % OF TARGET | |
|---|---|---|---|
| 70% based on financial targets | 70% based on financial targets CRITERIA Organic growth |
70% based on financial targets WEIGHTING 24% |
70% based on financial targets M AXIMUM IN % OF TARGET 172% |
Client retention |
CRITERIA 12% |
WEIGHTING 100% |
|
Underlying operating profit margin (excluding exchange rate impacts) |
CRITERIA 24% |
WEIGHTING 172% |
|
Group net income |
CRITERIA 12% |
WEIGHTING 165% |
|
Free cash flow |
CRITERIA 12% |
WEIGHTING 165% |
|
Total financial targets |
CRITERIA 84% |
WEIGHTING 134% |
|
| 30% based on quantitative non-financial targets | 30% based on quantitative non-financial targets CRITERIA CSR criteria Health and Safety |
30% based on quantitative non-financial targets WEIGHTING 12% |
30% based on quantitative non-financial targets M AXIMUM IN % OF TARGET 100% |
Sustainability - Food waste |
CRITERIA 12% |
WEIGHTING 100% |
|
Talent management Diversity, retention and promotion of our management teams |
CRITERIA 12% |
WEIGHTING 100% |
|
Total non-financial targets |
CRITERIA 36% |
WEIGHTING 100% |
|
| TOTAL ANNUAL VARIABLE FOR FISCAL 2024 | TOTAL ANNUAL VARIABLE FOR FISCAL 2024 CRITERIA 120% |
TOTAL ANNUAL VARIABLE FOR FISCAL 2024 WEIGHTING 170% |
|
The annual variable compensation is calculated and set by the Board of Directors following the close of the fiscal year to which it applies.
In the first quarter of each fiscal year, based on the Compensation Committee’s recommendations, the Board of Directors reviews the various targets, their weightings, and the expected performance levels. It then sets:
The financial performance targets that are based on financial indicators are determined in a specific manner by reference to the budget pre-approved by the Board of Directors and are subject to the above-mentioned performance thresholds. For confidentiality reasons, these targets are not disclosed when they are set.
Non-financial performance targets include only quantitative indicators. The non-financial targets set for Fiscal 2024 are presented in the table above.
The Health & Safety criterion is now being measured by two equally weighted indicators: the Lost-Time Injury Rate (LTIR) and the Near Miss to Accident Ratio. This approach aims to reinforce the teams' immediate and ongoing attention to risk prevention.
The Sustainability criterion has been replaced by an internal indicator, directly linked to the Group's commitments in terms of climate and environmental performance. The Board of Directors has selected the WasteWatch deployment indicator, expressed as a percentage of the cost of raw materials. The WasteWatch program was developed to reduce food waste and position Sodexo as a major player in this field. The deployment of this program is an essential step in raising awareness of food waste and measuring progress.
In accordance with French law, payment of the annual variable compensation is subject to shareholder approval during the Annual Shareholders Meeting.
Furthermore, no clawback clause has been put in place for the variable compensation.
If a new Chief Executive Officer is appointed or the existing Chief Executive Officer’s term of office is terminated during the course of a fiscal year, the same principles as described above will apply, on a pro rata basis by reference to the period during which he or she holds office.
If a Chief Executive Officer is appointed during the second half of the fiscal year, the performance appraisal will be carried out on a discretionary basis by the Board of Directors, taking into account the recommendations of the Compensation Committee.
