As part of the process to define the compensation policy for 2025, taking account of the current size and scope of Sodexo post spin-off, and also taking account of the comments of its shareholders, the Board of Directors, on the recommendation of the Compensation Committee, revised the comparison panels used for the positioning and structure of the Chief Executive Officer’s compensation. The selected panels are designed to mirror the Group's new profile as a global player in Food and Facilities Management services, with a high density of employees, and its updated scope.
The peer group of French companies, used to position the amount of the Chief Executive Officer’s compensation, previously consisting of CAC 40 companies (excluding banks ans insurance companies), was modified to comprise the 20 smallest market capitalizations in the CAC 40 and the 20 companies that make up the CAC Next 20 index, excluding banks and insurance companies. The overall compensation target (fixed compensation, annual variable compensation and performance share grants(2) is between the median and the upper quartile of compensation awarded in this group of companies, equivalent to the positioning of Sodexo in the peer group, particularly in terms of market capitalization.
The Board of Directors, on the recommendation of the Compensation Committee, also modified the peer group of international companies. This mainly serves to compare Sodexo’s compensation structure with that of companies operating in the same sector and competing in the same markets or to attract talent. It also serves to compare Sodexo’s Total Shareholder Return (TSR) with that of other companies over three years as part of the long-term incentive plan.
The companies included in the peer group are active in the non-financial corporate services sector and have a significant number of non-management employees. They also have international geographical coverage.
Lastly, their size and financial data are comparable to those of the Sodexo Group. As Edenred and Rentokil were considered as less relevant in the new context of the Company, they were removed from the previous peer group. Three companies have been added, as follows Accor, Adecco, Randstad. The international peer group now comprises the following eight companies: Accor, Adecco, Aramark, Compass, Elior, ISS, Randstad and Securitas.
The Chief Executive Officer’s annual fixed compensation is the basis for determining his/her annual variable compensation and long-term compensation. In line with the recommendation of the AFEP-MEDEF Code, the amount of this fixed compensation is not subject to a systematic annual review.
The Board of Directors, on the recommendation of the Compensation Committee, has decided to maintain the gross annual fixed compensation of Sophie Bellon, Chairwoman and CEO, at 900,000 euros for Fiscal 2025.
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.
In Fiscal 2024, the Board of Directors decided to strengthen the connection between the Chief Executive Officer’s compensation and performance, a decision which seemed appropriate in light of the Group's accelerated transformation after the Pluxee spin-off. The target annual variable compensation was thus raised from 100% to 120% of fixed compensation, with the possibility of increasing it to 170% (previously 150%) if targets are exceeded. These target and maximum rates remain unchanged for Fiscal 2025.
The annual variable portion, which is based solely on pre-defined quantitative criteria with financial criteria predominating, breaks down as follows:
| not included | not included | WEIGHT (as a % of fixed compensation) | ||
|---|---|---|---|---|
| CRITERIA | THRESHOLD | TARGET | MAXIMUM | |
| Financial targets* (70% of total objectives) | Organic growth | 0% | 24% | 41% |
| Client retention | 0% | 12% | 12% | |
| Underlying operating profit margin (at constant exchange rates) | 0% | 24% | 41% | |
| Group net income | 0% | 12% | 20% | |
| Free cash flow | N/A | 12% | 20% | |
| Non-financial targets (30% of total objectives) | CSR criteria: | not included | not included | not included |
| • Health and Safety: | not included | not included | not included | |
| – LTIR reduction ≥17% | N/A | 6% | 6% | |
| – NMIR ≥ 30:1 | N/A | 6% | 6% | |
| • Sustainable development - Deployment of the WasteWatch food waste measurement program = 85% of food RMC | N/A | 12% | 12% | |
| • Talent management (Top 300): | not included | not included | not included | |
| – Retention, expressed as a % of regrettable turnover rate ≤ 5% | N/A | 6% | 6% | |
| – Gender diversity in Operations ≥ 31% | N/A | 6% | 6% | |
| TOTAL ANNUAL VARIABLE FOR FISCAL 2025 (% of the fixed portion) | - | 120% | 170% | |
(*) Calculated on a straight-line basis between value
(**) Percentages have been rounded off to ease reading
(2) On the basis of the IFRS amounts awarded to chief executive officers in previous years.
(2) On the basis of the IFRS amounts awarded to chief executive officers in previous years.
