In the event that the term of office is terminated in its first year, the indemnity will be calculated prorata temporis on the basis of a maximum amount equivalent to six months of total gross compensation (target annual fixed and variable amounts), subject to the performance conditions relating to Sodexo’s financial and operating performance, which will be assessed by the Board of Directors based on the period considered.
In addition, in the event that the term of office is terminated in its second year, the indemnity will be calculated prorata temporis on the basis of a maximum amount equivalent to 12 months of total gross compensation (annual fixed and variable amounts effectively paid) in respect of the previous year, subject to an achievement rate for the Chief Executive Officer’s annual variable compensation targets of at least 80% for the first full year of his/her term of office.
Under no circumstances can the maximum overall indemnity payable to the Chief Executive Officer in respect of the non-compete agreement and/or his/her indemnity on termination of office exceed 24 months of his/her fixed and variable compensation.
Sophie Bellon has waived eligibility for this indemnity.
In accordance with the recommendations of the AFEP-MEDEF code, in the event of the termination of the Chief Executive Officer’s term of office, he/she will be subject to a non-compete obligation for a term of 24 months, restricting his/her freedom to hold any position as an employee or corporate officer, or carry out any consulting work, either directly or through another legal entity, for any of Sodexo’s competitors. As consideration for these restrictions, an indemnity is paid on a staggered basis, the amount of which is capped at 24 months of his/her fixed and variable compensation awarded for the fiscal year preceding the termination.
The maximum aggregate amount paid to the Chief Executive Officer for his/her non-compete agreement, and/or his/her indemnity on termination of office, may not exceed 24 months of his/her fixed and annual variable compensation.
The Board of Directors has the option to decide to waive the Company’s right to enforce this non-compete agreement when the Chief Executive Officer leaves the Group.
The non-compete indemnity is not paid if the Chief Executive Officer is leaving for retirement, and in any event once he/she reaches the age of 65.
The non-compete obligation applies to Sophie Bellon, without her being eligible for any financial compensation.
Rights to performance shares granted under the Group’s long-term incentive plans are forfeited if the beneficiary leaves the Company.
Only in the event of retirement may rights to performance shares granted under the Group’s long-term incentive plans be retained in their entirety, in keeping with the conditions applicable to all beneficiaries.
Moreover, in accordance with the AFEP-MEDEF Code and the plan rules applicable to all beneficiaries of the Group’s performance share plans, the Board of Directors, on the recommendation of the Compensation Committee, may authorize beneficiaries to retain rights to any shares in the event of a forced departure from the Company and in exceptional circumstances. In such a case, the number of shares that vest would necessarily be adjusted on a pro rata basis by reference to the actual time the Chief Executive Officer spent within the Group during the vesting period. The original vesting period would continue to run and the performance conditions would still apply.
In the event of a change of governance and the appointment of a new Chief Executive Officer during the fiscal year, the compensation structure and principles set out in the compensation policy approved by the Annual Shareholders Meeting will be applicable to the new Chief Executive Officer for the current fiscal year.
If the roles of Chairman/Chairwoman of the Board of Directors and Chief Executive Officer are separated, the compensation of the new Chief Executive Officer would then be determined in accordance with the principles of this compensation policy, which take into account the duties and responsibilities of the position, the skills and the experience of the holder of the position and the market practice.
The compensation of the new Chairman/Chairwoman of the Board of Directors would be fixed in line with his/her non-executive role and market practice. It would comprise fixed compensation, collective health and benefit plans and a company car. He/she would not be eligible for variable compensation or for the long-term compensation program.
If one or more Deputy Chief Executive Officers were appointed, the principles and criteria for determining, allocating and awarding the compensation components provided for in the Chief Executive Officer’s compensation policy would also apply to them. The Board of Directors, on the recommendation of the Compensation Committee, would determine the level and structure of the compensation by adjusting them to the situation of the person(s) concerned.
If the Chief Executive Officer or the Deputy Chief Executive Officer were to become a member of the Company’s Board of Directors, they would not receive any directors’ compensation.
Pursuant to the recommendations of the AFEP-MEDEF Code, if a new Chief Executive Officer were to be recruited from outside the Sodexo Group, the Board of Directors may decide to grant him or her an indemnity (in cash and/or shares) in order to compensate for any loss of previous compensation or benefits (excluding pension benefits).
This indemnity would be tailored so as to reflect the type, risk profile and the vesting horizon of the lost benefits.
In accordance with article L.22-10-8 of the French Commercial Code, the payment or implementation of any such compensation would be subject to shareholder approval.
The Board of Directors may be required to grant exceptional benefits on a temporary basis to allow the new Chief Executive Officer to move to the location where he/she may perform his/her duties.
