2012 Registration document and annual financial report - BNP Paribas

4CONSOLIDATEDFINANCIAL STATEMENTS - YEAR ENDED 31 DECEMBER 2012Notes to the financial statements4Criteria related to the risk and liquidity policyThe criteria related to the risk and liquidity policy relate solely to theChief Executive Officer and Chief Operating Officers. The proportion ofvariable remuneration corresponding to these criteria depends on theachievement of several measurable and predetermined objectives. It maybe granted only where:■ the variable remuneration linked to Group performance indicators is atleast equal to the corresponding proportion of the target remuneration;■ the BNP Paribas CDS is ranked among the first third of the lowest CDSof the panel of 21 comparable banks usually published.In 2012, the Board of Directors ensured that the amount of variablecompensation and the sum of all its individual components wereconsistent with trends in the Group’s results and that, in any event,it did not exceed 180% of the fixed remuneration. The Board reportedon variable compensation paid to corporate officers at the annualshareholders’ meeting.The Board of Directors decided that 60% of the variable compensationawarded to the corporate officers in 2012 with respect to 2011 wouldbe deferred over three years, with a minimum amount of EUR 300, 000payable in 2013. The deferred portion is subject to a return-on-equitycondition, and half of the deferred portion is indexed to the share price.Half of the non-deferred portion was postponed for six months andindexed to the share price.Long-term compensation of corporate officers in the event ofa rise in the share priceBNP Paribas’ corporate officers did not receive any stock options orperformance shares in 2012.To align the interests of the Group’s executives with its long-term businessprogress, the Board of Directors has introduced a fully conditionalcompensation scheme, based on the share price over a five-year period.The scheme gives no scope for choosing the payment date, and limitsgains.No compensation will be paid in respect of this scheme if, 5 years afterthe attribution date, the share price has risen by less than 5%. Even ifthe share price rises by more than 5%, payment of compensation wouldbe subject to a performance criterion relating to the BNP Paribas shareprice being achieved each year. According to this condition, the fractioncorresponding to the allocation may be maintained, reduced or lost fromone year to the next. The amount paid would depend on the increase inthe share price over five years. Any increase in the amount paid will beless than any increase in the share price and subject to a cap that wouldapply if the share price rose sharply.The carrying value of this contingent long-term compensation at thegrant date (3 May 2012) was EUR 228, 565 for Baudouin Prot, EUR 311, 323for Jean-Laurent Bonnafé, EUR 205, 132 for Georges Chodron de Courcel,EUR 193, 561 for Philippe Bordenave, and EUR 108, 421 for FrançoisVilleroy de Galhau.Post-employment benefitsIndemnities or benefits due or likely to become due upontermination or change of officesJean-Laurent Bonnafé, who joined BNP Paribas in 1993 and wasappointed Chief Executive Officer on 1 December 2011, agreed to waivehis employment contract (effective 1 July 2012) in accordance with therecommendations of the AFEP-MEDEF c orporate g overnance c ode.As a result of this decision, apart from the death and disability andhealth insurance provided under g roup plans, he lost the benefits of thecollective bargaining agreement and company agreements which he hadenjoyed for almost twenty years as an employee and corporate officer(and particularly his rights as regards termination of his employmentcontract).In exchange, therefore, the Board authorised a regulated agreement in hisfavour on 14 December 2012, which will be put to the vote at the annualGeneral Meeting held to approve the 2012 financial statements. Theagreement sets out the terms and conditions of Jean-Laurent Bonnafé’sentitlement to termination benefits should he cease to be Chief ExecutiveOfficer:1. Jean-Laurent Bonnafé will not be entitled to termination benefits inthe event of:■serious or gross misconduct;■ failure to meet the performance conditions set out in point 2;■ voluntary resignation from office.2. In the event of termination for reasons other than those set out in point1, Jean-Laurent Bonnafé will be entitled to the following contingenttermination benefits:(a) if, for at least two of the three years preceding termination, hehas achieved at least 80% of the quantitative targets set by theBoard of Directors for determining his variable compensation, histermination benefits will be equal to two years of his latest fixedremuneration and target compensation prior to termination;(b) if the achievement rate indicated above has not been met butthe net income attributable to equity holders is positive in two ofthe three years preceding termination, his termination benefitswill be equal to two years of his compensation due in respect of2011.3. If termination occurs during the year before the date on which Jean-Laurent Bonnafé is entitled to retire, his termination benefits will be:■limited to half of the benefits as set out above;■ subject to the same terms and conditions.Baudouin Prot, Georges Chodron de Courcel, Philippe Bordenave andFrançois Villeroy de Galhau are not entitled to any contractual benefitsupon termination of office.Retirement bonusesUnder an agreement authorised by the Board of Directors and terminatingthe employment contract of Baudouin Prot, BNP Paribas undertook topay Mr Prot, when he leaves the Group to take retirement, EUR 150, 000corresponding to the retirement bonus he would have received under theagreement relating to the Banque Nationale de Paris staff provident fund.1982012 Registration document and annual financial report - BNP PARIBAS