2020 Universal registration document and annual financial report - BNP PARIBAS76

2 CorPorate GovernanCe and internal Control

2

Report on Corporate governance

II. Remuneration of the Chairman of the Board of directors

The Chairman s fixed annual remuneration amounts to EUR 950,000 gross.

The Chairman does not receive any annual or multi-annual variable remuneration. The absence of variable remuneration reflects the independence of the Chairman with respect to the Executive Management.

Should a new Chairman be appointed, on the proposal of the Remuneration Committee and under this remuneration policy, the Board of directors will set the amount of their fixed remuneration in line with the new Chairman s profile and experience.

III. Remuneration of Executive Management Remuneration includes:

■ a fixed component;

■ an annual variable component;

■ a conditional long-term incentive plan (long-term incentive plan or LTIP).

The levels of these different components are determined using established market benchmarks.

Remuneration takes into account the cap on total variable remuneration in relation to fixed remuneration (including awards under long-term incentive plans) in accordance with article L.511-78 of the French Monetary and Financial Code, applicable specifically to credit institutions.

In accordance with paragraph 2 of the said article, the Shareholders Annual General Meeting of BNP Paribas of 24 May 2018 decided that this cap would be set at twice the amount of fixed remuneration; this decision will be submitted to the vote of the Annual General Meeting of 18 May 2021.

For the purposes of calculating the aforementioned ratio, a discount rate may in addition be applied to no more than 25% of the total variable remuneration inasmuch as the payment is made in the form of instruments deferred for at least 5 years, in accordance with article L.511- 79 of the French Monetary and Financial Code.

The remuneration of the Chief Operating Officer, whose term of office will expire at the end of the Annual General Meeting to be held on 18 May 2021, remains subject to the remuneration policy approved by the Annual General Meeting of 19 May 2020, until the end of his term as Chief Operating Officer. The fixed annual remuneration and the annual variable remuneration with respect to 2021 will be determined pro rata temporis based on his office as Chief Operating Officer in 2021. No LTIP will be awarded to him for 2021.

1. Fixed remuneration The Chief Executive Officer s annual fixed remuneration amounts to EUR 1,562,000 gross.

The annual fixed remuneration of the new Chief Operating Officer responsible for the CIB scope will amount to EUR 1,500,000 gross. For 2021, this remuneration will be paid to him as from his assumption of the position, i.e. after the Shareholders Annual General Meeting of Shareholders of 2021, pro rata temporis based on his office as Chief Operating Officer in 2021.

The annual fixed remuneration of the new Chief Operating Officer responsible for the Retail Banking scope will amount to EUR 900,000

gross. For 2021, this remuneration will be paid to him as from his assumption of the position, i.e. after the Shareholders Annual General Meeting of Shareholders of 2021, pro rata temporis based on his office as Chief Operating Officer in 2021.

Should a new Chief Executive Officer or a new Chief Operating Officer be appointed (other than those discussed above), the Board of directors will, on the proposal of the Remuneration Committee and under this remuneration policy, set their fixed remuneration in line with their profile and experience. Annual and multi-annual variable remuneration components will be set in line with the principles appearing in this remuneration policy.

2. Annual variable remuneration The variable component is intended to reflect the effective contribution of executive corporate officers to the success of BNP Paribas in respect of their functions as executive managers of an International Financial Services Group.

General principles The variable remuneration of members of the Executive Management is determined from a target remuneration equal to 100% of their annual fixed remuneration for the Chief Executive Officer and the Chief Operating Officers.

For 2021, the variable portion of the remuneration of the Chief Operating Officers will be determined pro rata temporis based on their office as Chief Operating Officers, i.e. from the time they assume their positions after the Shareholders Annual General Meeting in 2021.

It varies in accordance with criteria representative of the Group s results, CSR-linked criteria and the qualitative assessment by the Board of directors.

In addition, the payment of the annual variable remuneration includes a deferred period, a malus and claw-back arrangements, as well as a cancellation clause in the event of a bank resolution measure, in accordance with same terms and conditions as those described below for the LTIP (see 3 below).

Criteria linked to the Group s financial performance Criteria linked to the Group s financial performance accounts for 75% of the target variable remuneration and enables the corresponding portion of the remuneration to be calculated in proportion to the change in numerical indicators. There are two Group-based quantitative criteria for the Chief Executive Officer and four for the Chief Operating Officers, half of which are Group-based and the other half based on their respective areas of responsibility.

If objectives based on quantitative criteria are exceeded (or not achieved), the fraction of the target remuneration in question changes proportionally within the limits of the cap mentioned below.

■ For the Chief Executive Officer, the quantitative criteria apply to the Group s overall performance based on the following equally weighted criteria:

■ ratio of net earnings per share for the year to net earnings per share for the previous year (37.5% of target variable remuneration);

■ achievement of the Group s budgeted gross operating income (37.5% of the target variable remuneration).

■ For the Chief Operating Officers, half of the quantitative criteria are based on the Group s overall performance and the other half on the