144
Annual Report -
2013
-
Vivendi
Information About The Company |
Corporate Governance
| Reports
3
Compensation of Directors and Officers
3.3.
Compensation of Directors and Officers
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General Aspects
The compensation policy for Corporate Officers is developed by the
Human Resources Committee and approved by the Supervisory Board.
Its purpose, in both the short-term and long-term, is to better align the
compensation of Corporate Officers and executives with shareholder
interests. With this in mind, close attention has been paid to three major
elements:
the quantitative balance of the compensation, positioning base
compensation below the median level for comparable CAC 40
companies and major European competitors, and with dominant
weight given to variable and long-term factors in order to contribute
to the Group’s development and growth;
the quality of the criteria attached to setting the annual variable
portion. These criteria are based on both quantitative and qualitative
targets proposed by the Human Resources Committee and set by the
Supervisory Board, taking particular account of the issues defined
in the Companys corporate social responsibility (CSR) policy; and
the Group’s long-term development, through the grant of
performance shares subject to internal criteria that differ from
those applied to the variable portion of compensation, and external
criteria to strengthen the alignment of management interests and
those of shareholders.
This policy is supported by the setting of compensation for the
management of the major subsidiaries, with distinct weightings and
criteria adapted as a function of their activities.
Lastly, in accordance with the governance rules applied within the
Group, Corporate Officers and executives waive the payment of
directors’ attendance fees in subsidiaries in which they hold director
positions.
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Compensation Factors
Fixed Portion
Each year, at the proposal of the Human Resources Committee, the
Supervisory Board sets the compensation of each Corporate Officer,
taking into account his or her personal situation and comparative
studies carried out by independent firms.
Annual Variable Portion
This is based on precise and adjusted quantitative and qualitative
criteria. In order to provide dynamic support to the Group’s efforts, the
weight of the quantitative and qualitative criteria respectively applied
to the annual variable portion of compensation is set by the Human
Resources Committee as a reflection of the importance of and progress
made in strategic efforts.
Quantitative Criteria
These are based on the financial indicators the Human Resources
Committee has deemed most relevant for the assessment of the
financial performance of the Group and its major subsidiaries, whose
business is based largely on the same economic model: the sale of
content and services. These financial indicators are adjusted net income
of the Group and operating cash flow. They allow for the accurate
measurement of the performance and income recorded by each business
unit.
Qualitative Criteria
These are based on a series of priority actions assigned to the corporate
management. These priority actions are defined as a function of strategy
at Group level and the action plans approved for each business unit.
These criteria allow assessment of the capacity of officers to implement
and complete planned sales or acquisitions, undertake the necessary
strategic realignments in an increasingly competitive environment, and
identify new directions with regard to offerings of content and services.
For 2013, and for Vivendi SA’s corporate management, the priority
actions were as follows: continuation of disposals, the integration of
EMI, the start of SFR’s restructuring and strategic repositioning, defining
the Media and Content strategy and the continuation of initiatives
aimed at meeting the Group’s societal challenges.
Lastly, these qualitative criteria take into account the extent of the
Group’s commitments to corporate social responsibility (CSR): promoting
cultural diversity, knowledge sharing, and protecting and empowering
young people. CSR activities are certified by an independent specialized
agency.
Weightings of the Variable Portion
The variable portion is expressed as a percentage of the fixed
portion. For 2013, it could represent as much as 180%, if the level of
achievement of targets is significantly exceeded.
The factors of the variable portion are based on the fulfillment of
precise, demanding and verifiable criteria. These include financial
targets and implementing priority initiatives. Given the importance of
non-financial efforts to the Group in 2013 and 2014, the weighting given
to financial criteria was set at 50% (30% linked to the Group share
of adjusted net income and 20% linked to operating cash flow), and
the weighting given to priority initiatives was 50%, distributed among
several qualitative criteria and at differentiated percentages, including
5% linked to corporate social responsibility (CSR).
Award of Performance Shares
Purpose
Annual compensation is supplemented by a deferred factor in the
longer-term objectives: the awarding of performance shares, which
vest subject to internal and external performance criteria applicable
to both corporate management and also all beneficiary employees
(approximately 800 individuals in the Group). Since 2013, the Company
has granted no additional stock options.
Each year, the Supervisory Board, upon the recommendation of the
Human Resources Committee, approves criteria for the grant of
performance shares and sets the limits (threshold, target and maximum)
for calculating the level of performance to be achieved, to determine
whether the granted shares are to vest completely or partially.
