Page 145 - 2012 Annual Report

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VIVENDI l 2012 l Annual Report
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INFORMATION ABOUT THE COMPANY – CORPORATE GOVERNANCE
SECTION 3 - CORPORATE GOVERNANCE
GRANTS OF STOCK OPTIONS AND PERFORMANCE SHARES
3.2.4. Compensation Paid to Group Senior Executives
In 2012, the aggregate gross amount of the top ten compensation
packages paid by Vivendi SA, including benefits in kind other than
severance or termination payments, was €12.335 million. In 2012, the
aggregate gross amount of the top ten compensation packages paid to
senior executives for the whole Group, including benefits in kind, was
€63.292 million.
In accordance with Vivendi’s internal governance rules, all senior
executives waived their rights to receive director’s fees as compensation
for serving as Board members or permanent Representatives within
controlled subsidiaries, within the meaning of Article L.233-16 of the
French Commercial Code.
3.3. GRANTS OF STOCK OPTIONS AND PERFORMANCE SHARES
The Management Board, at its meeting of February 28, 2012, and the
Supervisory Board, at its meeting of February 29, 2012, approved a stock
option plan with performance conditions consisting of 2.51 million shares
representing 0.18% of the share capital and an award of 1.81 million
performance shares representing 0.13% of the company’s share capital,
as detailed below. In 2012, stock options granted to members of the
Management Board and its Chairman in office until June 28, 2012,
represented 633,625 stock options or 25.20% of the total grant and
0.047% of the company’s share capital. In 2012, performance shares
granted to members of the Management Board in office until June 28,
2012 represented 201,007 shares or 11.05% of the total grant and 0.015%
of the share capital. Awards granted to the Chairman of the Management
Board, in office until June 28, 2012, totaled 213,750 options and 59,375
performance shares, or 6.30% of the total grant of stock options and
performance shares.
At its meeting on September 27, 2012, the Supervisory Board awarded
60,000 performance shares to the new Chairman of the Management
Board.
For 2013, the Supervisory Board decided, on the recommendation of the
Management Board and General Management and on the advice of the
Human Resources Committee, that all grants would be effected in the
form of performance shares, with aggregate grants not exceeding 0.23%
of the company’s share capital, i.e., 3 million performance shares granted
in favor of 770 beneficiaries within the Group.
METHOD FOR ASSESSING PERFORMANCE CRITERIA FOR STOCK
OPTIONS AND PERFORMANCE SHARES
Method
Every year, the Supervisory Board, after a review conducted by the
Human Resources Committee, performs a detailed analysis of the budget
forecasts prepared by the Management Board and the Management
Committees of each business (prepared in December of the previous
year), and sets the limits (threshold, target and cap) for the calculation
of performance.
Calculation
Satisfaction of performance conditions over two years: performance
shares and stock options.
Every year, 50% of shares and options become eligible for vesting and
100% of shares and options are acquired if the weighted average of
earnings per criterion is achieved over two years:
✱ 100% of shares and options are definitively acquired if the weighted
total of the three indicators (adjusted net income, operating cash flow
and external indices) reaches or exceeds 100%;
✱ 50% are definitively acquired if the weighted total of the three
indicators achieves the value relating to the thresholds (50%);
✱ none is definitively acquired if the weighted total of the three
indicators is lower than the value relating to the thresholds (50%); and
✱ arithmetic calculation is used for intermediate results.
The criteria and method of calculation from 2012 onwards
At the meetings of the Management Board and Supervisory Board on
February 29, 2012, following a recommendation by the Human Resources
Committee, it was agreed that the following criteria for the calculation of
performance be applied for 2012, in accordance with what was presented
at the combined General Meeting on April 21, 2011:
Regarding stock options and performance shares, achievement of the
objectives underlying the performance criteria, are assessed once on
a cumulative basis at the expiry of a two-year period. To differentiate
between the criteria for bonuses and the criteria for stock options and
performance shares, it was resolved to follow an alternative internal
criteria from that used in past years:
✱ for the internal indicator (70%), the EBITA margin recorded as of
December 31, 2013 on a cumulative basis for 2012 and 2013;
✱ for external indicators (30%), the performance of Vivendi shares
between January 1, 2012 and December 31, 2013 compared to a
basket of indices: Europe Stoxx 600 Telecommunications (70%) as
well as the value of a selected portfolio of Media securities (30%);
✱ 100% of the performance shares and stock options vest at the end
of two years, if the weighted sum of internal and external indicators
reaches or exceeds 100%;
✱ 50% permanently vest if the weighted sum of the internal and external
indicators reaches a value corresponding to the threshold (50%);
✱ none permanently vest if the weighted sum of the internal and
external indicators is lower than the value corresponding to the
threshold (50%); and
✱ arithmetic calculation is used for intermediate results.