2012 Registration document and annual financial report - BNP Paribas

CORPORATE GOVERNANCEReport of the Chairman of the Board of Directors on the manner of preparation and organisationof the work of the Board and on the internal control procedures implemented by the c ompany2■ By way of compensation for their activity on specialised Committees,Directors receive a fixed component and a variable component ofDirectors’ fees:■■the fixed component of fees payable to the chairmen of Boardcommittees was set at EUR 20,000 for the Chairmen of the FinancialStatements Committee, Internal Control, Risk Management andCompliance Committee, and Compensation Committee, and atEUR 10,000 for the Chairman of the Corporate Governance andNominations Committee. The fixed component for the othermembers of these Committees was set at EUR 2,973;the variable components based on attendance at Committeemeetings was set at EUR 1,698.74 per meeting for committeeChairmen and at EUR 1,061.71 per meeting for the other membersof those committees.■ Based on those rules, a total of EUR 814,997 was allocated in Directors’fees in 2012. This represents a decrease of 3.2% compared with 2011(EUR 841,507) due to the lower number of Board meetings.■ Note 8.e to the financial statements included in this Registrationdocument and annual financial report contains a table showing theDirectors’ fees paid to the members of the Board of Directors.Compensation of Directors and corporate officers■ At the proposal of the Compensation Committee, the Board of Directorsdecided the variable compensation of Directors and corporate officersaccording to the methods that it had defined in 2010. Those methodswere described in note 8.e. to the financial statements included in the2010 Registration document and annual financial report (pages 240and 241). The Board recorded the results of the calculations derivedfrom the arithmetical criteria relating to the Group’s performance.It assessed how personal targets had been achieved based on itsassessment of the individual performances of the corporate officers,and particularly the capacity to anticipate, take decisions and managedemonstrated by each of them. It decided not to use the option to paythe Chief Executive Officer and the Chief Operating Officers a variablecompensation component based on the risk and liquidity policy. TheBoard of Directors ensured that trends in variable compensation wereconsistent with trends in the BNP Paribas Group’s net income.■ It decided that 60% (1) of the variable compensation paid to the corporateofficers would be deferred for three years and that half of the remaining40% to be paid in 2011 would be deferred for six months and indexlinkedto the share price. The 60% three-year deferred portion would,for each of the three years, be subject to a return on equity conditionand half would be index-linked to the change in share price since thedate of the first payment.■ The Board of Directors agreed on the principles governing thecompensation of corporate officers in respect of 2012. These provisionsare described in note 8.e to the financial statements included in thisRegistration document and annual financial report.■ At the proposal of the Compensation Committee, the Board approvedthe terms of a long-term incentive plan for Directors and corporateofficers designed to link their compensation to value creation overa long period. It checked with the Afep-Medef’s Committee of WiseMen that the plan complied with the provisions of the CorporateGovernance Code. The plan was set up for the benefit of the ChiefExecutive Officer and Chief Operating Officers.Neither the Chairman, nor the Chief Executive Officer nor the ChiefOperating Officers were involved in the preparation of the decisionsconcerning their compensation, nor did they take part in the Board’sdiscussions and vote on those decisions.■ The decisions of the Board of Directors were made public in accordancewith the provisions of the Afep-Medef Corporate Governance Code.A note to the financial statements included in the Registrationdocument and annual financial report is specifically devoted tothe compensation and social benefits awarded to Directors andcorporate officers. This note also includes information about thepension plans for the benefit of Directors and corporate officersand the corresponding commitments for which a provision hasbeen made. It sets out all the compensation and benefits awardedto Directors and corporate officers in a standard format, andwas prepared in accordance with the Afep-Medef CorporateGovernance Code and the recommendations of the AMF.Compensation of the categories of employees subjectto specific regulations■ The Board was informed by the Compensation Committee of theapproach taken by BNP Paribas to identify those employees whoseprofessional activities have a significant influence on the Company’srisk profile (regulated activities).■ It approved several amendments to the compensation policy forthose employees and examined the principal guidelines proposedby Executive Management to determine the overall compensationpackages for regulated activities in 2012.Equal opportunities and equal payThe Board of Directors discussed BNP Paribas’ policy on equalopportunities and equal pay based on the report required under theregulations. It was informed of Executive Management’s policy topromote diversity and gender equality in the career management andcompensation process.2(1) With the exception of François Villeroy de Galhau, for whom, on the basis of the current rules applicable to Group employees with comparable remuneration, this percentage isonly 40%, all the other rules being identical to those applied to the other corporate officers.2012 Registration document and annual financial report - BNP PARIBAS 53