The long term incentive plan (LTI) is awarded in the first half of the year. The Board of Directors validates the three-year financial and non-financial objectives. A release published on the Sodexo website sets out these objectives and the amount allocated to the Chief Executive Officer in accordance with IFRS.
Should it prove necessary to change them, the Board of Directors will set consistent and demanding criteria over the long term.
Given that medium-term financial objectives are not disclosed, the organic revenue growth and underlying operating profit margin targets will remain confidential.
Details of the LTI plan awarded in Fiscal 2024 are provided in section 7.4.2.1.
In order for his/her performance shares to be delivered, the Chief Executive Officer must be present within the Group at the vesting date.
In accordance with article L.225-197-1 of the French Commercial Code, the Chief Executive Officer is required to hold a number of vested shares in registered form for the duration of his/her term of office. The value of the shares has been set by the Board of Directors at 30% of his/her annual fixed compensation at the date the shares are delivered.
In addition, the Chief Executive Officer is required to hold shares in an amount equivalent to 200% of his/her gross annual fixed compensation, and this portfolio of shares must be built up over a maximum period of three years.
As part of the external recruitment process for a new Chief Executive Officer from a company outside the Sodexo Group, compliance will be required as from the vesting date of the first share grant, i.e., three years following the initial grant by the Company.
The Board of Directors, on the recommendation of the Compensation Committee, has specified that this rule applied to Sophie Bellon on the basis that she was not granted shares prior to taking up the position of Chairwoman and CEO and is therefore in a similar situation to that of a CEO external to the Group.
Applying shareholding rules to the Chief Executive Officer ensures that his/her interests remain strongly aligned with the interests of Group shareholders. With regard to Sophie Bellon, alignment is also ensured via the indirect holding of shares via Bellon SA (of which she is shareholder and for which she has committed not to sell her shares to a third party for 50 years). In addition, Bellon SA does not intend to sell its Sodexo shares to a third party.
In addition, as long as he/she remains in office, the Chief Executive Officer commits not use hedging instruments on any granted performance shares.
The Board of Directors has decided not to create a multi-year compensation system, preferring instead to apply a share-based long-term compensation program, which it considers to be more closely aligned with the interests of the Company’s shareholders.
However, the Board may envisage putting in place such a system if any regulatory changes or other changes in circumstances were to render share grants inappropriate or impossible. If a multi-year compensation plan were to be set up, it would be based on the same principles and criteria as those used for determining and allocating performance shares and the same grant cap would apply.
The compensation policy does not permit exceptional compensation to be granted to the Chief Executive Officer.
The Chief Executive Officer is a beneficiary of a defined benefit pension plan governed by article L.137-11-2 of the French Social Security Code. This plan is also available to the Group’s most senior executives holding an employment contract with one of its French subsidiaries.
This pension plan was introduced in 2021 in line with the following rules: subject to one year of seniority within the Group, pension rights of up to 0.5% per year are granted for the first five years of the plan, and then up to 1% beyond five years, not exceeding a total of 10%. The rights are determined based on the fixed and variable compensation received during the calendar year by virtue of the role of Chief Executive Officer. The rights vest subject to an achievement rate for his/her annual variable compensation targets of at least 80%. The resulting pension tops up the pensions provided by the basic compulsory plans and does not generate any corresponding obligation on the Company’s balance sheet. For her first two years as a plan beneficiary, the Chairman and CEO is entitled to a lifetime annuity equal to 0.92%.
The Chief Executive Officer has the use of a company car. The insurance, maintenance and fuel costs (related to professional use) are covered by Sodexo.
The Chief Executive Officer is a member of the Company’s collective health and benefit plans, subject to the same terms and conditions as those applicable to all employees of the Group’s French entities.
As the Chief Executive Officer does not have a French employment contract, the Company reserves the right to subscribe to a private unemployment insurance policy with the French Association of Unemployment Insurance for Corporate Officers (Association pour la garantie sociale des chefs et dirigeants d’entreprises — GSC). Under this policy, if the Chief Executive Officer were to lose his/her office, he/she would receive benefits for a maximum period of 24 months.
Sophie Bellon has requested not to benefit from this coverage.
The compensation policy for the Chief Executive Officer provides that, if he/she is forced to leave the Group, he/she is entitled to an indemnity representing up to twice the amount of his/her gross annual compensation (fixed and variable) received over the 12 months preceding the termination.
This indemnity is not applicable in cases of voluntary resignation, retirement, or removal from office for gross or willful misconduct.
The indemnity will be paid subject to an achievement rate for the Chief Executive Officer’s annual variable compensation targets of at least 80% for each of the two fiscal years ended prior to the termination of office.
