Universal registration document and annual financial report 2019

72 2019 Universal registration document and annual financial report - BNP PARIBAS

2 CorPorate GovernanCe and internal Control

Corporate governance report

The procedure has two components:

■ Agreements between BNP Paribas and the natural persons or holding companies mentioned above:

The interested parties must provide the Bank, on an ongoing basis, with the list of agreements concluded between BNP Paribas and the natural persons or holding companies mentioned above. The Compliance function ensures that these agreements do cover current operations and are concluded under normal conditions and prepares a report that it sends to the Secretary of the Board of directors.

■ Agreements between BNP Paribas and legal entities (other than holding companies) mentioned above.

This procedure relies upon existing policies (such as the "Code of conduct" or "Client Interests Protection Policy") and also provides for:

■ the declaration by the corporate officers of the legal entities with which they are associated;

■ the verification by the Bank of any business relationships between each of these legal entities;

■ in-depth monitoring of agreements identified using a risk-based approach.

A report is prepared for each of these elements and submitted every year to the CGEN which informs the Board of directors.

2.1.3 REMUNERATION AND BENEFITS AWARDED TO THE CORPORATE OFFICERS

The provisions of the French Commercial Code, as amended by ordinance No. 2019-1234 of 27 November 2019, on the remuneration of the corporate officers of listed companies provide for obtaining the ex ante approval every year by the Annual General Meeting on remuneration policy for corporate officers. The remuneration policy for corporate officers at BNP Paribas is presented below on pages 72 to 77.

The remuneration of these same corporate officers is also subject to the ex post vote of the Annual General Meeting relating to the information on the remuneration referred to in article L.225-37-3 I of the French Commercial Code (this information is set out below on pages 78 et seq.). When the Annual General Meeting does not approve these items, the Board of directors submits an amended remuneration policy, taking into account the shareholders vote, for the approval of the next Annual General Meeting. The payment of directors remuneration for the current year is suspended until the amended remuneration policy is approved. When the payment is reinstated, payments are backdated to the last Annual General Meeting.

Lastly, the remuneration of each executive corporate officer is subject to a second ex post vote on the total remuneration or benefits in kind paid during the previous year or awarded in respect of the same year (the information relating to this remuneration is outlined in tables 1 a and b, 2 a and b and 3 a and b on pages 79 and seq.). The variable components of remuneration in respect of the previous year can only be paid after they have been approved by the Annual General Meeting on the basis of this second vote.

REMUNERATION POLICY FOR CORPORATE OFFICERS SUBMITTED FOR SHAREHOLDERS EX ANTE APPROVAL, IN ACCORDANCE WITH ARTICLE L.225-37-2 OF THE FRENCH COMMERCIAL CODE, AT THE ANNUAL GENERAL MEETING ON 19 MAY 2020 In this report, the Board of directors provides details of the fixed and variable components of total remuneration and benefits in kind, attributable to the directors, the Chairman of the Board of directors, the

Chief Executive Officer and the Chief Operating Officer for their corporate offices within BNP Paribas (SA), over a three-year period.

The elements of the remuneration policy presented below are the subject of resolutions submitted for the approval of the Annual General Meeting of Shareholders voting under the quorum and majority conditions required for Ordinary Annual General Meetings. If the Annual General Meeting does not approve these resolutions, the previous remuneration policy, which has already been approved by the Annual General Meeting of 23 May 2019, will continue to apply. In this case, the Board of directors will submit for the approval of the next Annual General Meeting a draft resolution outlining an amended remuneration policy, indicating how the shareholders vote was taken into account and, where appropriate, the opinions stated during the Annual General Meeting.

The remuneration policy for the corporate officers complies with applicable legislation and regulations, the Afep-Medef Code and the BNP Paribas Responsibility Charter. The policy, as detailed below (in particular the performance criteria), is aligned with the Company s corporate interest, contributes to the commercial strategy as well as the sustainability of the Company and takes into consideration the compensation and employment conditions of the employees within the Company.

Without prejudice to the powers of the Annual General Meeting in this respect, the determination of the remuneration of corporate officers is the responsibility of the Board of directors and is based on proposals from the Remuneration Committee, which drafts the decisions which the Board of directors approves regarding remuneration. In particular, the Remuneration Committee annually reviews the remuneration, compensation and benefits in kind granted to the Company s corporate officers. The Committee is made up of two independent members who have experience of remuneration systems and market practices in this area and includes a director elected by employees.

Measures aimed at avoiding and managing conflicts of interest are established in the Internal rules of the Board of directors as well as the policy on the suitability of Members of the management body and Key function holders. Executive corporate officers are not present during the discussions of the Board of directors and the Remuneration Committee regarding their own compensation.