752019 Universal registration document and annual financial report - BNP PARIBAS

2CorPorate GovernanCe and internal Control

2

Corporate governance report

➤ SUMMARY OF CRITERIA FOR SETTING ANNUAL VARIABLE REMUNERATION

Criteria applicable % of fixed remuneration Type

Criteria linked to the Group s financial performance

37.50% Change in earnings per share

37.50% Achievement of target gross operating income

Criteria linked to the Group s CSR performance 10.00%

Multicriteria assessment of the actions taken by BNP Paribas Group with respect to social, societal and environmental issues

Qualitative criteria 15.00%

Assessment with regard to implementation of the Bank s strategic guidelines, particularly the human, organisational and technical dimensions of its transformation plan, and taking into account the general context of the year under consideration

Ceiling The Board of directors ensures that annual variable remuneration is in line with the Group s results.

In any case:

■ each of the two criteria linked to the Group s financial performance is capped at 130% of its target weight and cannot therefore lead to the award of an annual variable remuneration greater than 48.75% of the fixed remuneration;

■ the criteria linked to the Group s CSR performance and qualitative criteria are capped at 100% of their target weight and cannot therefore lead to the award of an annual variable remuneration greater than 10% and 15% respectively of the fixed remuneration.

The amount of annual variable remuneration awarded for each of the executive corporate officers is capped at 120% of their fixed remuneration.

Terms and conditions of payment The payment terms for variable remuneration of BNP Paribas Group s executive corporate officers, in accordance with the provisions of the French Monetary and Financial Code and the European Banking Authority s Guidelines on remuneration policy, are:

■ 60% of annual variable remuneration is deferred over five years, at the rate of one-fifth per year;

■ regarding the non-deferred portion of the variable remuneration:

■ half will be paid in cash in May of the year of the award, subject to the approval of the Shareholders Annual General Meeting under the terms provided for by article L.225-100 III of the French Commercial Code; and less payments received for directorships, where applicable, within the Group for entities other than BNP Paribas (SA);

■ and half will be paid in cash, indexed to BNP Paribas share performance, at the end of a one-year holding period starting on

the award date (award date is the date of the Board of directors decision), i.e. in practice, in March of the year following the year in which the remuneration is awarded;

■ the deferred portion of the variable remuneration will be paid on an annual basis in five instalments over five years, the first instalment only being paid at the end of a deferred period of one year from the award date of the variable remuneration, provided that the Group s ROE before tax for the year preceding the payment is greater than 5%. Each instalment will be paid:

■ half in cash in March every year,

■ and half in cash, indexed to BNP Paribas share performance, in March of the following year, at the end of a one-year holding period.

3. Conditional Long-Term Incentive Plan (LTIP) covering a five-year period

To align the interests of executive corporate officers with the medium to long-term performance of the BNP Paribas Group without compromising risk management, in 2011, the Board introduced a conditional LTIP.

The LTIP, which amounts to the target annual variable remuneration awarded in respect of the previous year, is split into two equal parts: one to reward an increase in the intrinsic value of the share, and the other potential outperformance relative to peers.

First half of the award amount: intrinsic share performance

The first half of the award amount is dependent on the change in share(1) price given that no payment will be made for 50% of the award amount if the BNP Paribas share price does not increase by at least 5% from the date of the award by the Board of directors to the end of a five-year period from the award date.

(1) The initial and final amounts used to measure the performance of the share price over five years are as follows:

the initial value is the average of the opening price of the BNP Paribas share for the rolling 12-month period preceding the date of grant;

the final amount is the average of the opening price of the BNP Paribas share in the rolling 12-month period preceding the payment date.