2005 Financial Report - Capgemini

44 ANNUAL
MANAGEMENT REPORT
Capgemini
• Option 1: an exchange ratio of 1 new Cap Gemini share to
be issued for every 3 Transiciel shares;
• Option 2: an exchange ratio of 5 Cap Gemini shares to be
issued, plus 16 equity warrants giving entitlement for up to
1 new Cap Gemini share, for 16 Transiciel shares.
Option 2 includes an earn-out mechanism which would allow Transiciel
shareholders to receive additional Cap Gemini shares subject to
the Sogeti/Transiciel entity attaining certain earnings targets in 2004
and 2005. This earn-out mechanism is described in the prospectus
which was approved by the "Commission des Opérations de Bourse"
under reference no. 03-935 on October 29, 2003. As of Decem-
REPORT 2005 Capgemini
ber 31, 2005, the application of the methods for calculating the
“earn-out” component would result in the issuance of 315,790
new Cap Gemini shares to holders of warrants against a total of
508,600 shares. The amount of new shares to be issued will be
submitted for the approval of the independent arbitrator within 30
days of the General Shareholders’ Meeting of May 11, 2006, in accordance
with article 1.4.13.10. of the information memorandum.
3.9 Compensation of directors
• Compensation of managing directors
The total gross compensation (fixed + variable) paid to the
two managing directors in 2005 breaks down as follows:
Amount paid in 2005 Amount paid in 2005
(euros) and 2006 for 2005 (fixed 2005 and variable 2004)
Serge KAMPF
Fixed 720,000 720,000
Variable 467,712 386,593
Total 1,187,712 1,106,593
Paul HERMELIN
Fixed 900,000 900,000
Variable 738,000 537,788
Total 1,638,000 1,437,788
TOTAL OF THE TWO 2,825,712 2,544,381
As is the case for all the Group’s managers and in accordance with a
formula that has been applied in Cap Gemini for more than 30
years, the variable portion of the two managing directors’ compensation
consists of two equal halves, V1 based on the Group’s consolidated
results and V2 based on the attainment of several personal
objectives that have been set for them for the fiscal year in question.
For 2004 (variable part paid in April 2005):
1) for Serge Kampf, these two portions, V1 and V2, were
each for a theoretical amount (i.e., for objectives fully attained)
of €252,000.
• for the V1 portion, the calculation of the percentage of
attainment of the Group’s main consolidated financial objectives
(revenues, operating margin, costs of shared services)
resulted in a combined total of 33.41%, which led to a V1
portion for Serge Kampf of €252,000 x 0.3341 = €84,193;
• for the V2 portion, the calculation of the degree of
attainment of each of the seven personal objectives that
had been set for him for the fiscal year resulted in a
total of 120/100, corresponding to a V2 portion of
€252,000 x 1.2 = €302,400.
His total actual variable compensation was therefore €386,593,
i.e., 76.7% of his theoretical variable compensation (€504,000).
2) for Paul Hermelin, both V1 and V2 were for a theoretical
amount (i.e., for objectives fully attained) of €375,000.
• for the V1 portion, the calculation of the percentage of
attainment of the Group’s main consolidated financial objectives
(revenues, operating margin, costs of shared services)
resulted in a combined total of 33.41%, which led to a V1
portion for Paul Hermelin of €375,000 x 0.3341 = €125,288;
• for the V2 portion, the calculation of the degree of attainment
of each of the six personal objectives that had been
set for him for the fiscal year resulted in a total of 110/100,
corresponding to a V2 portion of €375,000 x 1.1 = €412,500.
His total actual variable compensation was therefore €537,788,
i.e., 71.7% of his theoretical variable compensation (€750,000).
For 2005 (variable portion paid in March 2006):
1) for Serge Kampf, these two portions, V1 and V2, were
each for a theoretical amount (i.e., for objectives fully attained)
of €201,600.
• for the V1 portion, the calculation of the percentage of
attainment of the Group’s main consolidated financial objectives
(revenues, operating margin, costs of shared services)
resulted in a combined total of 115%, which led to a V1
portion for Serge Kampf of €201,600 x 1.15 = €231,840;
• for the V2 portion, the calculation of the degree of attainment
of each of the three personal objectives that had been
set for him for the fiscal year resulted in a total of 117/100,
corresponding to a V2 portion of €201,600 x 1.17 = €235,872.
His total actual variable compensation was therefore €467,712,