2019 Universal registration document and annual financial report - BNP PARIBAS232

4 Consolidated finanCial statements for the year ended 31 deCemBer 2019

4

Notes to the financial statements

7.c OTHER LONG-TERM BENEFITS BNP Paribas offers its employees various long-term benefits, mainly long- service awards, the ability to save up paid annual leave in time savings accounts, and certain guarantees protecting them in the event they become incapacitated. The net provision amounted to EUR 448 million at 31 December 2019 (EUR 462 million at 31 December 2018).

As part of the Group s variable compensation policy, annual deferred compensation plans are set up for certain high-performing employees or pursuant to special regulatory frameworks. Under these plans, payment is deferred over time and is subject to the performance achieved by the business lines, divisions and Group.

Since 2013, BNP Paribas has introduced a Group loyalty scheme with a cash payment, at the end of a three-year vesting period, which fluctuates according to the Group s intrinsic performance. The aim of this loyalty scheme is to make different categories of managerial staff partners in the Group s development and profitability objectives. These personnels are representative of the Group s talent and the breadth of its managerial

framework i.e. senior managers, managers in key positions, line managers and experts, high-potential managers, high-performing young executives with good career development prospects and key contributors to the Group s results.

The amounts allocated under this plan are linked to changes in the Group s operational performance over three years (for 80%) and to the achievement of the Group s corporate social responsibility (CSR) targets (for 20%). These nine targets are in line with the four pillars on which the Group s CSR policy is based. In addition, the final payment is subject to continuous service within the Group between the grant date and the payment date, provided that the Group s operating income and pre-tax income for the year prior to payment are strictly positive. For employees subject to special regulatory frameworks, this loyalty scheme is adjusted in accordance with the CRD4 European Directive.

The net obligation related to deferred compensation plans and loyalty schemes amounts to EUR 651 million at 31 December 2019 (EUR 579 million at 31 December 2018).

In millions of euros 31 December 2019 31 December 2018

Net provisions for other long-term benefits 1,099 1,040

Asset recognised in the balance sheet under the other long-term benefits (89) (80)

Obligation recognised in the balance sheet under the other long-term benefits 1,188 1,120

7.d TERMINATION BENEFITS BNP Paribas has implemented a number of voluntary redundancy plans and headcount adaptation plans for employees who meet certain eligibility criteria. The obligations to eligible active employees under such plans are provided for as soon as a bilateral agreement or a bilateral agreement proposal for a particular plan is made.

In millions of euros 31 December 2019 31 December 2018

Provision for voluntary departure, early retirement plans, and headcount adaptation plans 513 380

7.e SHARE-BASED PAYMENTS BNP Paribas set up a Global Share-Based Incentive Plan for some Group employees, including stock options and performance share awards. Last attributions under this plan were made in 2012.

Furthermore, some deferred compensation plans are index-linked to BNP Paribas share price. Especially for employees whose activities are likely to have an impact on the Group risk exposure.

Expense of share-based payments

Expense/(revenue) in millions of euros Year to

31 Dec. 2019 Year to

31 Dec. 2018

Prior deferred compensation plans 84 (204)

Deferred compensation plans for the year 372 195

TOTAL 456 (9)