2007 Interactive Registration Document - Renault

04 INTEREST
CORPORATE GOVERNANCE
OF SENIOR EXECUTIVES
AIMS OF THE STOCK OPTION AND BONUS SHARES PLAN
The main aim of the stock option plan is to involve Renault executives worldwide,
particularly the members of management bodies, in building the value of the
Group – and hence Renault’s share price – by allowing them to have an
ownership interest in the company.
The plan also makes it possible to single out those executives who, by their
actions, make an especially positive contribution to the Group’s results.
In addition, the plan helps to secure the loyalty of those executives for whom the
Group has long-term ambitions, in particular “high-fl yers”, i.e. young executives
with strong potential. Stock options help to increase the commitment of these
staff members and motivate them to work for the company’s advancement
and growth.
The plan buttresses the role of the Group’s responsibility centers in Europe and
the rest of the world. In Automobile it applies in particular to sales subsidiaries,
vehicle and powertrain engineering teams, managers of body assembly and
powertrain plants, industrial subsidiaries and all the heads of vehicle and
powertrain programs and projects. The plan also applies to Sales Financing,
and to the heads of the Group’s major support functions.
GRANT POLICY ✦
Option grants vary according to the grantee’s level of responsibility and
contribution to the company, an appraisal of their performance and results, and,
for younger staff members, an assessment of their development potential.
Senior executives and managing executives
The senior executives are the President and CEO and the members of the
Renault Management Committee, including the six members of the Group
Executive Committee.
In principle, other managing executives are granted options each year, based on
the same criteria as those applicable to other senior executives, namely levels
of responsibility, performance and results. The quantity of options granted can
vary signifi cantly depending on individual appraisals. Some managing executives
may receive none. The allocation factor ranges from 1 to 4, with a median of
1,000 options in 2005.
Other executives benefiting from the plan
The plan’s other benefi ciaries are generally senior managers and high-fl yers
with strong professional or managerial potential aged 45 and under. Grants
are generally made every one to three years or more, but never more than
two years running. An array of complementary systems is used to assess
and select grantees (annual performance and development review, Careers
Committees, personal monitoring for high-fl yers, performance-related bonuses).
Taken together, these systems form a comprehensive observation platform from
which the most deserving executives can be singled out.
Annual performance and development reviews
Annual performance and development reviews are used to make a precise,
written review of past performance and to defi ne written goals for the coming
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year. All managerial staff without exception (i.e. including senior executives
and managing executives) undertake a performance appraisal with their
immediate superior, and, where appropriate, their line manager and project
manager. The results of the session are reviewed and graded by the next level
of management. The annual performance and development review, which is
signed off and annotated by the +2-level line manager, provides the opportunity
to precisely measure the interviewee’s past inputs and the importance of his or
her future missions. It is also used to closely analyze the managerial capacity and
the progress to be made vis-à-vis benchmarks set by senior management.
Careers Committees
The purpose of Careers Committees is to review all positions of responsibility
within the company and to assess the contributions of the incumbents. They also
seek to forecast possible changes in the job profi le of individual staff members
and the persons designated to replace them, either under normal circumstances
or immediately should the need arise. The Careers Committees meet monthly
in all the Group’s major divisions and departments throughout the world.
This system makes it possible to permanently update collective assessments
of individual staff members and it enables senior managers to submit the
names of possible option grantees to the President and CEO with full knowledge
of the facts. A General Careers Committee, chaired by the President and CEO
and composed of the members of the Group Executive Committee, examines
nominations for 200 key positions (known as “A Positions”) and is responsible for
manpower planning for these jobs. With this method, managers at different levels
can focus more tightly on future senior executives or managing executives.
High-flyers
Particular attention is paid to the action and development of young high-fl yers,
who are monitored closely. Each year, the Careers Committees meticulously
update the P List, comprising young high-fl yers with strong professional or
managerial potential likely to become senior managers, and the P1 List,
composed of executives destined to become managing executives or senior
executives. Additions to the P1 List are decided by the General Careers
Committee.
Since 1999, in an effort to improve transparency, high-fl yers (P or P1) have been
duly informed of their status by their managers during their annual performance
and development review.
Careers and Skills Development Officers (DDCC)
All major Group divisions and departments have a Careers and Skills
Development Offi cer (DDCC), who is responsible for assessing and permanently
monitoring all the executives within his or her scope of activity. The DDCCs are
coordinated centrally on a regular basis. Managers can thus ensure that the
human resources policy is properly implemented, that the above mentioned
processes are followed, and that individual careers are optimally managed,
particularly in terms of mobility assignments and training. DDCCs are important
because they marshal and summarize the assessments and judgments made
by different managers and are therefore in a better position to select potential
stock option grantees.
146 Registration Document Renault 2007
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