Connect - Schneider Electric
Connect - Schneider Electric
Connect - Schneider Electric
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3 CORPORATE GOVERNANCE<br />
MANAGEMENT INTERESTS AND COMPENSATION<br />
President and CEO - Jean-Pascal Tricoire<br />
In accordance with AFEP/MEDEF guidelines, Mr Jean-Pascal<br />
Tricoire resigned from his service contract when he was<br />
reappointed Chairman of the Management Board on May 3, 2009.<br />
The Supervisory Board has defi ned the benefi ts granted to him as<br />
Chairman of the Management Board. Under the terms of his new<br />
status, approved by the Annual Shareholders’ Meeting of April 23,<br />
2009, Mr Jean-Pascal Tricoire:<br />
1°) will continue to benefi t from:<br />
– the <strong>Schneider</strong> <strong>Electric</strong> SA and <strong>Schneider</strong> <strong>Electric</strong> Industries<br />
SAS employee benefi t plan, which offers health, disability and<br />
death coverage,<br />
– the supplementary health, disability and death coverage<br />
available to the Group’s senior French executives,<br />
– the Top-hat Pension Plan for the Group’s Senior Management<br />
described in the Supervisory Board Chairman’s report in<br />
accordance with article L.225-68 of the French Commercial<br />
Code (see page 125 );<br />
2°) Mr Tricoire will be due compensation in the event of termination,<br />
capped at two years of his target remuneration (fi xed salary<br />
and target bonus, maximum described below) taking into<br />
account compensation provided for in the non-compete<br />
agreement described below. The amount due will be subject to<br />
performance criteria.<br />
Compensation will be due in the event that:<br />
(i) Mr Tricoire resigns, is dismissed or is not reappointed as<br />
a member or Chairman of the Management Board in the<br />
12 months following a material change in <strong>Schneider</strong> <strong>Electric</strong>’s<br />
shareholder structure that could change the membership of the<br />
Supervisory Board,<br />
(ii) Mr Tricoire resigns, is dismissed or is not reappointed as a<br />
member or Chairman of the Management Board following a<br />
reorientation of the strategy pursued and promoted by him<br />
until that time, whether or not in connection with a change in<br />
<strong>Schneider</strong> <strong>Electric</strong>’s shareholder structure as described above,<br />
(iii) Mr Tricoire is asked to resign, is dismissed or is not reappointed<br />
as a member or Chairman of the Management Board when<br />
the mathematical average of the rate of achievement of<br />
performance objectives used to calculate his variable bonus<br />
was 50% or higher in the four full fi nancial years preceding his<br />
departure (or, if he has been a member and Chairman of the<br />
Management Board for less than four years, in the number of<br />
full fi nancial years since his appointment).<br />
Payment of compensation will depend on the mathematical<br />
average of the rate of achievement of performance objectives<br />
used to determine the variable portion of Mr Tricoire’s<br />
remuneration for the three full years preceding the date of the<br />
Board meeting at which the decision is made.<br />
If the mathematical average is:<br />
– less than 50% of the target: no compensation will be paid,<br />
– equal to 50% of the target: he will receive 75% of the maximum<br />
amount,<br />
– equal to 100% of target: he will receive 100% of the maximum<br />
amount,<br />
– between 50% and 100%, he will receive between 75% and<br />
100% of the maximum amount calculated on a straight-line<br />
basis depending on the rate of attainment.<br />
130 2011 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC<br />
To date, the achievement rate of Group performance objectives<br />
for the previous three fi nancial years is, on average, 138.6 %.<br />
These objectives were based on the Group’s overall performance<br />
(operating margin, organic growth, cash generation ratio and<br />
customer satisfaction rate);<br />
3°) is bound by his non-compete agreement should he leave the<br />
Company, unless a mutually agreeable arrangement is found;<br />
the agreement is for a period of one year and is remunerated<br />
(60% of target remuneration: fi xed and variable);<br />
4°) will retain all of the stock options, stock grants and performance<br />
stock grants allocated or to be allocated to him should he<br />
leave the Company. The performance condition is defi ned as<br />
follows; the average rate of attainment of the Group targets<br />
that determine Jean-Pascal Tricoire’s variable remuneration<br />
calculated for the last three fi nancial years at the time of his<br />
departure, which fi gure should be at least 50% of target.<br />
Travel and business expenses for Jean-Pascal Tricoire are assumed<br />
by the Group, as well as the costs of his new professional and<br />
personal organization and any related extra expenses. He may use<br />
the chauffeur-driven Company cars made available to Group Senior<br />
Management and also has the use of a Company car. This benefi t<br />
in kind is estimated at EUR3,197.<br />
The Supervisory Board on February 21, 2012 decided to renew the<br />
appointment to the Management Board that terminates on May 2,<br />
2012 for a further period of three years. On this occasion, it adapted<br />
the benefi ts granted to Jean-Pascal Tricoire as part of his functions<br />
as a corporate offi cer. The Anual Shareholders’ Meeting of May 3,<br />
2012 is called upon to approve these (see pages 261-262, 265<br />
and 266 ).<br />
Emmanuel Babeau<br />
Under his service contract with <strong>Schneider</strong> <strong>Electric</strong> Industries SAS,<br />
Emmanuel Babeau is covered by the top-hat pension plan for senior<br />
executives in France (see above) and is also entitled to a termination<br />
benefi t should the employer terminate the contract or if, following<br />
a signifi cant change in equity ownership, he decides to terminate.<br />
This termination benefi t, including the benefi t provided for in the<br />
industry collective bargaining agreement (Convention Nationale des<br />
Ingénieurs et Cadres de la Métallurgie), is capped at two years of<br />
his target annual compensation (salary plus target variable bonus).<br />
Should Mr Babeau leave the Company for any reason, the Company<br />
may evoke the non-compete agreement in his service contract<br />
and the provisions of the industry collective bargaining agreement<br />
(Convention Nationale des Ingénieurs et Cadres de la Métallurgie),<br />
which call for monthly payment of an amount equivalent to 50%<br />
to 60% of the average monthly compensation for the last twelve<br />
months of presence (salary plus paid bonus). This payment is due<br />
for one year, renewable once.<br />
Mr Babeau’s travel and entertainment expenses are reimbursed<br />
by the Company. He may use the chauffeur-driven company cars<br />
made available to Group Senior Management and also has the use<br />
of a Company car. This benefi t in kind is estimated at EUR5,517.