732019 Universal registration document and annual financial report - BNP PARIBAS

2CorPorate GovernanCe and internal Control

2

Corporate governance report

The remuneration of executive corporate officers takes account, in its principles, of the following objectives:

■ alignment with the Bank s social interest and with that of its shareholders:

■ consistency with a medium to long-term outlook, especially in terms of the growth of the Bank s value, good risk management and the relative performance of its share,

■ integration of extra-financial assessment criteria,

■ consideration of CSR aspects in determining remuneration (in particular the CSR objectives considered for certain employees),

■ guaranteeing sufficient variability in the amounts allocated to reflect changes in the Bank s results without weighing too heavily on fixed expenses;

■ the transparency of compensation:

■ all components (fixed, annual variable, multi-annual variable) are used in the overall assessment of the remuneration,

■ balance between the components of remuneration, which must contribute to the general interest of the Bank and reflect best market practices and legal and regulatory constraints,

■ the rules must be stable, strict and intelligible;

■ remuneration that is sufficiently attractive to facilitate the selection of profiles that are particularly competent in the Group s business areas.

I. Directors remuneration In accordance with the law, the global amount of directors remuneration is set by the Shareholders Annual General Meeting.

The individual amount of directors remuneration is determined by the Board of directors pursuant to a proposal of the Remuneration Committee. It comprises a fixed and a predominantly variable portion based on actual participation in meetings, regardless of the means. Directors residing abroad receive an increased amount, except where they may participate in meetings of the Board of directors by videoconference or telecommunications means. Additional remuneration is paid for actual participation in Committees. Committee members receive this additional remuneration for their participation in each different Committee.

At the end of the year, the Remuneration Committee examines the allocation of directors remuneration and the amount paid to each of them in respect of the year on the basis of an audit of director s actual attendance at Board and Committee meetings. Where applicable, the remainder of the global amount fixed by the Annual General Meeting is allocated in proportion to the amount paid to each director. In the event of an additional extraordinary meeting of the Board or Committees, the amount of the remuneration due to each director is adjusted in proportion to the amounts paid to each director.

The Board of directors then approves the individual distribution of the directors remuneration in respect of the year and its payment to the directors (subject to the provisions of article L.225-100 II of the French Commercial Code).

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 (LTIP), which forms the multi- annual variable component.

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 said article, the Shareholders Annual General Meeting of BNP Paribas of 24 May 2018 decided to reset this cap at twice the amount of fixed remuneration.

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.

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

The Chief Operating Officer s annual fixed remuneration amounts to EUR 1,000,000 gross.

Should a new Chief Executive Officer or a new Chief Operating Officer be appointed, on the proposal of the Remuneration Committee and under this remuneration policy, the Board of directors will 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 Officer.