2018 Registration document and annual fi nancial report - BNP PARIBAS 75

2CORPORATE GOVERNANCE AND INTERNAL CONTROL

2

Corporate governance report

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 is set at EUR 1,562,000 gross.

The Chief Operating Offi cer s annual fi xed remuneration amounted to EUR 1,000,000 gross.

Should a new Chief Executive or a new Chief Operating Officer be appointed, on the proposal of the Remuneration Committee, the Board of directors will set their fi xed remuneration according to their profi les and experience. Annual and multi-annual variable remuneration components will be set in line with the principles appearing in this report.

2. Annual variable remuneration The variable component is intended to refl ect the effective contribution of executive corporate offi cers to the success of BNP Paribas in respect of their functions as executive managers of an international fi nancial 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 fi xed remuneration for the Chief Executive Offi cer and the Chief Operating Offi cer.

It varies in accordance with criteria representative of the Group s results, CSR-linked criteria and the qualitative assessment by the Board of directors.

Yearly variable remuneration includes malus and clawback arrangement, as well as a cancellation clause in the event of a bank resolution measure, in accordance with the same terms and conditions as those described below for the LTIP (see 3 below).

Criteria linked to the Group s fi nancial criteria Criteria linked to the Group s fi nancial 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 In order to strengthen the incorporation of the CSR strategy in the determination of Executive Management s remuneration, the Board of directors decided to now allocate 40% of the qualitative criteria used to determine the target variable remuneration as presented to the 2018 Annual General Meeting to account for the Group s CSR dimension .

Thus, the Board of directors decided to set the portion of the target variable remuneration linked to the Group s CSR performance at 10%. With respect to the previous remuneration policy applicable up to and including the 2018 performance year, the assessment of CSR performance was included in the qualitative criteria.

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) Assessment of the Board of directors of highlights of the year, primarily with regard to climatic and social challenges;

(ii) publications of extra-fi nancial 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-financial performance rankings of FTSE, Robeco SAM and Vigeo

Annual measurement by the Board of Directors of 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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