Universal Registration Document - Fiscal 2023

7.4.4 Compensation policy for the Sodexo Leadership Team

The compensation policy applicable to members of the Sodexo Leadership Team is reviewed each year by the Compensation Committee and the Board of Directors. It is fully aligned with that of the Chief Executive Officer.

The compensation of Sodexo Leadership Team members is made up of the following:

• a fixed salary;
• annual variable compensation.

The annual variable compensation represents between 60% and 90% of the fixed salary.

The bonus is calculated and paid following the close of the fiscal year to which it applies and after the Board of Directors has approved the financial statements;

• a long-term incentive plan, consisting of restricted share grants. Shares are subject to continued presence and performance conditions.

The applicable performance conditions are equivalent to those set for the Chief Executive Officer and described in Section 7.4.1.3. of this Universal Registration Document.

In addition to this compensation, Sodexo Leadership Team members may receive benefits in kind (primarily a car and a travel allowance) and pension plan contributions (under defined contribution and, where applicable, defined benefit plans).

Total compensation paid during Fiscal 2023 by the Group to members of the Sodexo Leadership Team in office as of August 31, 2023 (including the Chairwoman and Chief Executive Officer, details of whose compensation are provided in Section 7.4.2.1 of this document), amounted to 12,143,106 euros.

This amount comprises:

• a fixed portion of 6,758,224 euros;
• a variable portion of 5,384,881 euros made up of the variable compensation due for Fiscal 2022.

7.4.5 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 20^th resolution adopted at the Combined Annual Shareholders Meeting on December 14, 2021, the Company’s shareholders renewed the authorization given to the Board of Directors to grant, on one or more occasions, existing and/or newly issued restricted shares of the Company 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 2021 plans, the terms and conditions of the restricted share plans granted within the Group are as follows:

• the restricted share grants take place annually and are decided primarily during the first half of each fiscal year, after the publication of the financial statements for the previous fiscal year. It could be decided to make an additional grant during the second half, mainly for recently recruited beneficiaries for whom the share grant was decisive in recruitment;
• vesting of the shares is subject to a three-year continued presence condition for each beneficiary and, for part of the shares granted, 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.

Vesting of shares under restricted share plans in Fiscal 2023

During Fiscal 2023, the vesting periods of the restricted share plans set up by the Board of Directors on June 19, 2019 and November 6, 2019 ended on June 19, 2023. These plans provided for the following performance conditions:

• average increase in organic growth of +3% to 4% a year over the four fiscal years 2019 to 2022;
• average rate in the underlying operating profit margin of +5.6% to 6.0% a year over the four fiscal years 2019 to 2022;
• the following ranking for total shareholder return (TSR) for Sodexo on May 19, 2023 as compared with an internal industry peer group made up of the following groups: ABM, Aramark, CBRE, Compass, Edenred, Elior, Elis, G4S, ISS, ILL, Rentokil and Securitas. It should be noted that as the G4S group is no longer a listed company, it has been excluded from the peer group;

• the achievement of the threshold of at least 35% of women in top management positions, consisting of all positions reporting directly to a member of the Sodexo Leadership Team.