74 2019 Universal registration document and annual financial report - BNP PARIBAS

2 CorPorate GovernanCe and internal Control

2

Corporate governance report

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 malus and claw-back arrangement, 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.

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.

The quantitative criteria apply to the Group s overall performance, based on two criteria that are given equal weighting:

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

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

Criteria linked to the Group s CSR performance A portion of 10% of the target variable remuneration is linked to the Group s CSR performance.

The allocation of this portion of the annual variable remuneration is based on multi-criteria measurement based on a holistic approach of actions undertaken by the BNP Paribas Group outside the Company with respect to social, societal and environmental issues.

With this in mind, this remuneration structure includes three weighted criteria, each at 3.33%:

(i) the Board of directors assessment of the year s highlights, primarily with regard to climatic and social challenges;

(ii) publications of extra-financial rating agencies measuring the quality of the BNP Paribas CSR positioning relative to its peers;

(iii) an alignment with the CSR objectives included in the remuneration due to retention plans granted to the Group s key employees.

75% Group Financial Performance

10% The Group s

CSR Performance

(i) By the Board

Positioning of BNP Paribas in the top quartile of the Banks sector in the

extra-nancial performance rankings of FTSE, Robeco SAM and Vigeo Eiris

Annual measurement by the Board of Directors if achievements and key developments around a line of action

focused on climate and social challenges

Achievement of the three-year CSR objectives set for key Group

employees in the retention plan that expired during the year (basket of 9 indicators)

(ii) By the market (iii) Alignment with key employees of the Group

15% Qualitative criteria

Holistic assessment of CSR policy

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Qualitative criteria The portion of the variable remuneration linked to the Board of directors qualitative assessment is 15% of the target variable remuneration.

The performance of this qualitative assessment by the Board of directors is considered essential, especially in view of the reinforcement of its responsibilities for monitoring and control provided by the French Monetary and Financial Code since 2014 (thereby implementing CRD 4). In addition to the Bank s strategy, which it must approve, the Board of

directors must also assess the performance of Executive Management based on their capacities for anticipation, decision-making, leadership and exemplary behaviour.

To do this, the Board assesses the qualitative aspect of annual variable remuneration, regarding the implementation of the Bank s strategic guidelines, in particular its transformation plan and its human, organisational, technical and CSR dimensions in the general context of the year under consideration.