Compensation of managers – Equity ratios

A sensitive matter to the extent that equity ratios enable internal comparison and external comparisons between managers within the company and those of competitors.

Legal uncertainty due to the lack of definition of a reference perimeter in the French Commercial Code (social and consolidated perimeters, situation of holding companies or companies with the majority of employees abroad) and no guidelines on methods of calculating such ratios.

Complex interaction between French law requirements and EU law requirements (EU Shareholder Rights Directive n°2017/828 and works from the EU Commission) and guidelines published by the AFEP-MEDEF on equity ratios.

Advice on the analysis of the scope of equity ratios and applicable requirements.

Determination of the parameters to calculate the numerator and denominator of the ratios to build a clear and consistent method of calculation, adapted to the group’s structure and its activities.

Assistance in corporate communication on equity ratios and preparation of answers to questions from shareholders and proxy agencies.

Take advantage of these new requirements to clarify compensation policies. Enhanced accountability in compensation practices within the company, in line with the goals set forth by the Pacte Law.

Determination of ratios according to a clear and consistent methodology for all stakeholders, complying with best market practices.