Hermès International: Release on compensation of Executive Chairmen
as of 15 February 2024
PRESS
RELEASE
Paris, 15 February 20246.30 p.m (Paris time)
EXECUTIVE CHAIRMEN
COMPENSATION
In accordance
with the AFEP/MEDEF Corporate Governance Code updated in December
2022 (art. 27.1) HERMÈS INTERNATIONAL discloses information on all
potential or acquired elements of its Executive Chairmen
compensation, immediately following the Board meeting having
established these elements.
Principles
The compensation elements detailed below,
relating to the 2023 financial year, are all in line with the
Executive Chairmen compensation policy approved by the
Shareholders’ General Meeting of April 20, 2023 and presented in
the 2022 Universal Registration Document (Chapter 3 «
Corporate Governance » § 3.8.1. page 293 et seq.).
This policy was renewed for the 2024 financial
year, subject to the changes presented hereafter. It will be
submitted to the approval of the Shareholders’ General Meeting of
April 30, 2024.
2024 Fixed
compensation and
Variable compensation
in respect of
2023 financial
year
2024 Fixed compensation (« Additional »)
In compliance with the compensation policy in
force, the 2024 fixed compensation was calculated by applying to
the fixed remuneration for 2023 the variation in the Company's
consolidated revenue for the 2023 financial year compared to the
2022 financial year, i.e. an increase of +20.6%.
Émile Hermès SAS' fixed compensation for 2023
was therefore set at €903,392, and the one of Mr Axel Dumas was set
at €2,657,510 (actual amounts to be paid).
Variable compensation in respect of 2023
financial year (« Statutory »)
At its meeting of 11 January 2024, the CAG-CSR
committee evaluated the level of achievement of the CSR criterion
applicable to 10% of the variable compensation of the Executive
Chairmen and noted that the three indicators making up the
criterion were fully achieved. As a result, the variable
compensation awarded in respect of financial year 2023, has been
calculated by applying to the variable compensation effectively
paid in 2023 (in respect of the 2022 financial year) the change in
the Company’s consolidated net income before tax for financial year
2023 compared with 2022, i.e. an increase of +26.9%.
Émile Hermès SAS' variable compensation for 2024
was therefore set at €2,159,191, and the one of Mr Axel Dumas was
set at €4,630,203 (actual amounts to be paid).
Pursuant to article L.22-10-77, II of the French
Commercial Code, the payment of this variable compensation is
subject to the approval of the respective resolutions to be
submitted to the vote of the shareholders at the General Meeting of
April 30, 2024.
The actual compensation of the Executive
Chairmen has been submitted to:
- a decision by the Management Board
of the General Partner (Conseil de gérance de l’associé commandité)
that strictly applied the principle of variability contained in the
statutory provisions,
- a compliance control with the
articles of association and the compensation policy by the CAG-CSR
Committee,
- a deliberation by the Supervisory
Board.
Revised compensation policy of the
Executive Chairmen
In compliance with the decision-making process
applicable to the compensation policy for the Executive Chairmen,
the Management Board of Emile Hermès SAS – General Partner –
proposed the renewal of the compensation policy previously approved
in all of its dispositions – and called to be submitted to the
Shareholders’ General Meeting of April 30, 2024 (ex-ante vote),
subject to two amendments.
Proposed amendments
The first amendment concerns fixed compensation
– or additional compensation according to the articles of
association. It is proposed to limit the annual change in the fixed
compensation of the Executive Chairmen to 5%. Thus, the indexation
of the fixed compensation will remain aligned with the variation in
the Company's consolidated revenue achieved for the previous fiscal
year, at constant exchange rate and scope, compared to the
penultimate fiscal year, but without being able to exceed an
increase of 5% compared to the previous fixed remuneration
(ceiling).
The second amendment concerns the supplemental
pension plan. It was decided to propose the setting up of a funded
defined-pension plan, under Article 82 of the French General Tax
Code, to take over from the defined-benefit pension plan under
Article 39 of the aforementioned Code, for which the rights’
acquisition has been frozen since December 31, 2019 – and from
which the natural person Executive Chairman potentially
benefits.
In accordance with the dispositions of the
French Commercial Code (art. R. 22-1-40), the acquisition of rights
linked to this defined contribution pension plan will be subject to
clear, detailed and varied performance conditions, both financial
and non-financial, that contribute to the objectives of the
compensation policy.
This proposal to amend the compensation policy
of the Executive Chairmen, which remained unchanged since 2020 when
a CSR criterion was introduced for the variable compensation, was
presented to the CAG-CSR Committee of February 7, 2024, and then to
the Supervisory Board of February 8, 2024, which unanimously issued
a favorable advisory opinion.
The amended components of compensation will be
detailed in the 2023 Universal Registration Document (chapter 3 «
Corporate Governance »).
This proposal will be submitted to the approval
of the Shareholders’ General Meeting of April 30, 2024.
- hermes_20240215_remuneration_gerants_uk
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