FRANCE Law and Practice Contributed by: Jean-Christophe Devouge and Kaïs Boussadia, Aurès
made to it, without any prior approval required from the shareholders. CEO’s compensation schemes generally include a fixed and a variable portion, the latter being paid upon achievement of targets set by the board. A listed SA must comply with the say-on-pay procedure (please refer to 1.3 Corporate Gov- ernance Requirements for Companies With Publicly Traded Shares ). Under this regula - tion, the directors’ and officers’ compensation schemes are subject to a double approval pro - cess from the shareholders: • the shareholders’ general meeting shall approve the compensation policy for the upcoming fiscal year, setting forth the princi - ple and structure of the relevant compensa - tion schemes (ex-ante vote). Any amount paid – or payable – to the directors and/or officers in violation of the approved compensation policy must be void; and • each year, the shareholders’ general meeting shall approve all payments made to direc - tors and officers or amounts owed to them pursuant to the pre-approved compensation policy (ex-post vote). Payment of variable and extraordinary compensation elements shall be subject to the approval of the ex-post vote. A rejection of the ex-ante vote or of the ex-post vote by the shareholders entails severe conse - quences: • if the compensation policy is rejected, the previously approved principles and criteria shall continue to apply or, in the absence of any previously approved policy, the com - pensation scheme shall be determined in accordance with the compensation attributed
for the previous financial year or, if none, in accordance with existing practice within the company; and • if the compensation paid – or payable – to the directors and/or officers is rejected, the relevant officer shall be deprived of any vari - able and exceptional compensation due for the relevant fiscal year. Compensation schemes of listed companies’ officers are also subject to various rules and recommendations, including from corporate governance codes (with for instance increasing recommendation to consider ESG criteria for variable compensation). SAS In SAS, the conditions for the compensation of the chairman and members of the board (if any) are set in the by-laws. SARL The compensation of the managing directors of the SARL is approved by the shareholders. 4.11 Disclosure of Payments to Directors/Officers Listed companies must disclose any such com - pensation in a complete and transparent manner in their Universal Registration Document. This disclosure must provide the total compensation, fixed, variable and exceptional, and benefits of any kind attributed or paid to all corporate offic - ers in the last year. 5. Shareholders 5.1 Relationship Between Companies and Shareholders The company and its shareholders are legally bound by the by-laws, which constitute the main
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