Universal Registration Document Fiscal 2025

PAYMENT CONDITION

In accordance with French law, the payment of annual variable compensation is subject to shareholder approval at the Annual Shareholders Meeting.

No clawback clause has been implemented for the Chief Executive Officer's variable compensation.

APPOINTMENT OR TERMINATION OF OFFICE

If a new Chief Executive Officer is appointed or if the existing Chief Executive Officer's term of office is terminated during the course of a fiscal year, the same principles as those described above will apply, on a pro rata temporis basis by reference to the period during which he holds office.

If an appointment is made during the second half of the fiscal year, the performance assessment would be carried out on a discretionary basis by the Board of Directors, on the recommendation of the Compensation Committee, within the limits of the applicable policy, while ensuring continued alignment with the Group’s performance.

Long-term compensation

OBJECTIVE

The Board of Directors considers that the long-term variable compensation plan, which also applies to other key positions within the Company, is particularly well suited to the position of Chief Executive Officer in view of the direct contribution that he is expected to make to Sodexo's long-term value creation. This plan – based on the grant of performance shares subject to criteria selected by the Board of Directors – is directly linked to the Group's strategic priorities, and its objectives are demanding.

It strengthens the motivation and loyalty of the Chief Executive Officer while facilitating the alignment of his interests with those of shareholders and with the Company's corporate interest.

LONG-TERM COMPENSATION PROGRAM

Sodexo's long-term compensation program currently consists solely of performance share grants.

Performance share grants are decided by the Board of Directors, on the recommendation of the Compensation Committee, generally during the first half of each fiscal year after the publication of the financial statements for the previous fiscal year.

The vesting period for the shares is three years, consistent with the performance measurement period and with market practices.

The Board of Directors has capped the value of the performance shares granted to the Chief Executive Officer at 150% of his total annual compensation (comprising fixed compensation and target annual variable compensation).

In addition, the percentage of performance shares granted to him may not exceed 8% of the total number of shares granted annually by the Board of Directors.

PERFORMANCE CONDITIONS

The proportion of the performance shares that will vest depends on achievement of internal and external performance conditions, measured over a three-year period. The level of achievement will be disclosed for each criterion once performance has been assessed by the Board of Directors.

The performance conditions reflect a good balance between operational performance, investor confidence, and the Group’s corporate responsibility performance. They are aligned with Sodexo’s long-term value creation model, which aims to achieve sustainable and profitable growth for the benefit of all stakeholders.

The selected criteria, which are all quantitative, are designed to measure overall performance and are directly linked to the Group’s key strategic priorities, as follows:

• 50% based on financial performance, measured based on organic growth and underlying operating profit margin objectives. These objectives provide a longer-term perspective of these criteria, which also apply to the Chief Executive Officer's annual variable compensation;
• 30% based on stock market performance, measured by Sodexo's Total Shareholder Return (TSR) relative to a peer group of international companies of comparable sector and size (comprising the companies included in the international peer group for compensation). No shares vest if Sodexo's TSR is below the peer group's median TSR;
• 20% based on sustainability performance, including objectives related to the internal promotion rate for the Group's Senior Leaders and an internal sustainability scorecard. The objective based on the internal sustainability scorecard includes three internal operational criteria that are quantifiable and ambitious (see Chapter 2 of this document for further details).