Universal Registration Document Fiscal 2025

7.3.4 Description of the long-term incentive plan – Restricted share plans

Sodexo’s long-term incentive policy has two objectives:

• to incentivize the Group’s executives, managers and other employees by aligning their financial interests with those of Sodexo’s shareholders;
• to attract and retain the intra-entrepreneurs needed to expand and strengthen Sodexo’s market leadership.

Since Fiscal 2013, long-term incentive plans have consisted exclusively of restricted share plans.

In the eighteenth resolution adopted at the Combined Annual Shareholders Meeting on December 15, 2023, the Company’s shareholders renewed the authorization given to the Board of Directors to grant, on one or more occasions, existing and/or newly issued restricted shares of the Company to employees and Corporate Officers of the Group.

The terms and conditions of the restricted share plans (including the related continued presence and performance conditions) and the list of beneficiaries are determined by the Board of Directors, based on recommendations of the Compensation Committee.

The terms and conditions of the restricted share plans granted within the Group are as follows:

• the restricted share grants take place annually and are decided primarily during the first half of each fiscal year, after the publication of the financial statements for the previous fiscal year. Additional grants may be made during the second half, mainly for recently recruited beneficiaries for whom the share grant is decisive in recruitment;
• vesting of the shares is subject to a three-year continued-employment condition for each beneficiary and, for some of the shares granted, to performance conditions assessed over a three-year period.

The restricted share grants have no dilutive impact for shareholders as the shares concerned are treasury shares held by the Company.

Vesting of shares under restricted share plans in Fiscal 2025

During Fiscal 2025, the vesting periods for the restricted share plans set up by the Board of Directors on February 1, 2022 and June 22, 2022 ended on January 31, 2025 and June 21, 2025 respectively. Sophie Bellon was not a beneficiary of these plans.

The completion of the Pluxee spin-off during the acquisition period of these plans, on February 1, 2024, required the following adjustments:

• the targets in the performance conditions of the performance share plans that were still outstanding at the spin-off date were recalculated for the adjusted scope:
  
  • for the financial conditions relating to organic growth and underlying operating profit margin, the Board of Directors has restated the expected performance levels for the Pluxee businesses, based on the multi-year budgets used to set the initial targets. The performance ranges have been maintained,
  • with regard to Total Shareholder Return (TSR), the only change concerns the peer group, which excludes Edenred after February 1, 2024. The performance measurement period and the vesting grid, including the rule of no vesting below the median, remain unchanged;
• the number of shares in these plans has been adjusted to reflect the effect of the spin-off, which automatically reduced the parent company's share price¹. This adjustment had no impact on the initial value of the grant.

These plans provided for the following performance conditions:

• achieving a revenue objective of between 21 and 22.6 billion euros by the end of Fiscal 2024 (on a like-for-like basis);
• an increase in underlying operating profit margin, determined on an annual basis in thirds, as follows: between 4.85% and 5.25% for Fiscal 2022, between 5.3% and 5.9% for Fiscal 2023, and between 4.8% and 5.4% for Fiscal 2024. If underlying operating profit margin growth was equal to or above 5.6% by the end of 2024, the objective would have been considered achieved;
• a condition based on Sodexo’s Total Shareholder Return (TSR) at December 17, 2024, the date of the Annual Shareholders Meeting called to approve the financial statements for Fiscal 2024, compared with a group of international peers comprising the following seven groups: Aramark, Compass Group, Edenred (until February 1, 2024), Elior, ISS, Rentokil and Securitas. As G4S was no longer a listed company, it was excluded from the peer group. The vesting rate of shares subject to this criterion was defined as follows: