Universal Registration Document Fiscal 2025

7 Corporate Governance

The Chief Executive Officer's annual variable compensation for Fiscal 2026 will be calculated as follows:

  WEIGHTING (as a % of target annual variable)
CRITERIA AT THRESHOLD AT TARGET AT MAXIMUM**
Financial objectives* (70% of total objectives) Organic growth (%) 0% 20% 32%
Net commercial growth (%) 0% 10% 16%
Underlying operating profit margin (%) 0% 20% 32%
Group net income (€m) 0% 10% 16%
Free cash flow (€m) 0% 10% 16%
Non-financial objectives (30% of total objectives) Impact 0% 10% 10%

Health and Safety:

      

– TRCR ≤ 7.5

      

– Safety walks ≥ 490 000

      

Sustainability – Continued deployment of the WasteWatch food waste measurement program ≥ 85% of food RMC

      
Strategy 0% 20% 20%
TOTAL ANNUAL VARIABLE FOR FISCAL 2026 (% of target annual variable ) 0% 100% 142%
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Each fiscal year, prior to the publication of the Group’s first-quarter results, the Board of Directors, based on the recommendations of the Compensation Committee, reviews the various objectives, their weightings, and the expected performance levels. It then sets:

  • the threshold below which no variable compensation is paid;
  • the target level of variable compensation, corresponding to the amount due when each objective is met;
  • the maximum level of variable compensation, corresponding to the amount due when each objective is exceeded; and
  • the assessment criteria for quantitative and qualitative performance.

The amount of the variable compensation is calculated based on strategic financial and non-financial indicators.

For Fiscal 2026, the Board of Directors, on the recommendation of the Compensation Committee, decided to revise some of the applicable performance criteria as follows:

  • the client retention criterion has been replaced by the Net commercial growth criterion. While the former measures the share of revenues retained from one fiscal year to the next, the new criterion offers a broader and more dynamic view of commercial performance. Net commercial growth, defined as the difference between contract wins and losses (new sites or services minus terminations), provides a more integrated measure of the Group’s ability to generate organic growth. This change fully reflects Sodexo’s strategic ambition to enhance the value of existing client relationships while accelerating new business development;
  • a new qualitative criterion has been introduced to assess the performance of the Chief Executive Officer in relation to the Group’s priorities. In the specific context of a transition year, the Board of Directors’ assessment will be multifactorial, taking into consideration the talent management, strengthening operational and commercial excellence, with a focus on the North America region, and mobilizing an aligned leadership team;
  • the two Group talent management criteria have been removed. This assessment will be included in the overall qualitative performance evaluation by the Board of Directors (see previous point);
  • the health and safety criteria are evolving in line with internal and external standards: replacement of LTIR and NMIR criteria with (i) the number of safety walks, which measures the number of safety visits carried out and recorded, and (ii) the TRCR1 (Total Recordable Case Rate), which measures the number of work-related accidents resulting in lost time or medical treatment reported per a given number of hours worked.

The financial objectives for Fiscal 2026 are aligned with the 2026 budget objectives, as approved by the Board of Directors. For reasons of business confidentiality, these financial objectives are not disclosed.

Organic growth (measured as the increase in revenues versus the same period of the previous fiscal year, excluding the impact of acquisitions, disposals, and currency effects) and underlying operating profit margin (calculated as operating profit before unusual or non-recurring items as a percentage of revenues) are key indicators of the Group’s ability to grow and deliver operational efficiency in serving its customers and disciplined inflation and cost management.

The free cash flow criterion is an indicator of the Group’s ability to fund its activities and growth, thereby ensuring its long-term business sustainability.

Group net income is the measure of Sodexo’s overall performance. The non-financial performance objectives are primarily based on quantitative indicators:

  • the Board of Directors reaffirmed its focus on employee health and safety and on risk prevention. For Fiscal 2026, the following targets were set:
    • more than 490,000 safety visits carried out and recorded during Fiscal 2026. This criterion replaces the Near Miss Incident Ratio (NMIR),
    • a Total Recordable Case rate (TRCR) of less than or equal to 7.5 per million hours worked during the Fiscal 2026. This indicator replaces the Lost Time Incident Rate (LTIR);
  • the sustainability criterion is directly linked to the Group’s climate and environmental commitments. For Fiscal 2026, the Board of Directors decided to maintain the WasteWatch deployment indicator, expressed as a percentage of food raw material costs. This program, designed to structure and accelerate efforts to reduce food waste, enables reliable and continuous progress tracking. The objective has been set again at 85% — representing full deployment across eligible sites — in order to consolidate progress and ensure long-term integration into Group operations (deployment stood at 85.4% as of end-August 2025).

The annual variable compensation is calculated and set by the Board of Directors after the close of the fiscal year to which it applies.

The amount of variable compensation to be paid will be calculated as from November 10, 2025.