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Combined Shareholders' Meeting of April 28, 2016
8.3 Comments on the resolutions of the Shareholders' Meeting
DANONE
REGISTRATION DOCUMENT 2015
332
4. Obligation to retain shares issued through the exercise of
stock options and performance shares
In 2007, the Board instituted an obligation for corporate officers
and for all Executive Committee members to retain shares issued
through the exercise of stock options and performance shares, with
the retention amount set at 35% of the net capital gain on acquisition.
The Board expanded this system in 2012 by setting an overall ob-
jective on the number of DANONE shares to be retained in the case
of performance shares or shares created through the exercise of
stock options, with the number of shares to be retained equal to
four years' fixed compensation in the case of corporate officers
and two years' fixed compensation in the case of other Executive
Committee members. Once this threshold is attained the share
retention obligation is considered to have been fulfilled.
The share retention obligation was reviewed by the Board in con-
nection with the renewal of Mr. Franck RIBOUD's term of office. The
Board concluded that this share retention obligation was sufficiently
demanding. Specifically, the Board felt that given its high level, the
mechanism was comparable to and made it possible to achieve the
same objective as the AFEP-MEDEF Code, which calls for the pur-
chase of shares following the lock-up period for performance shares.
Renewal of Mr. Emmanuel FABER's term of office
(5
th
resolution)
The February 22, 2016 meeting of the Board of Directors, acting
on the recommendation of the Nomination and Compensation
Committee, reviewed the situation of Mr. Emmanuel FABER, whose
reappointment as a Director is proposed to you.
1. Situation of Mr. Emmanuel FABER with respect to rules on
multiple directorships
The Board reviewed the situation of Mr. Emmanuel FABER with
respect to rules on multiple directorships and concluded that these
rules had been fully respected. Currently, Mr. Emmanuel FABER is
not a director of any other listed company. The biography and list of
all responsibilities and positions held by Mr. Emmanuel FABER as of
December 31, 2015 and during the past five years is found above in
section 6.2
Positions and responsibilities of the Directors and nominees
to the Board of Directors.
2. Combined employment contract and corporate officer term
of Mr. Emmanuel FABER
The Board notes that the employment contract of Mr. Emmanuel
FABER, who joined Danone as an employee in 1997, was suspended
when he was appointed as a corporate officer of Danone. In 2014,
when he was appointed Chief Executive Officer, the Board confirmed
that his employment contract should be maintained and remain
suspended.
The Board felt that this system should be kept in place, given Mr.
Emmanuel FABER's age, personal situation and seniority as a
Danone employee.
The Board feels that the provisions of the AFEP-MEDEF Code with
respect to the cancellation of the employment contracts of corporate
officers are not relevant for directors who have at least 10 years'
seniority at Danone. The Board feels that these provisions hinder
promotions from within the Company and are contrary to the prin-
ciple of management continuity that Danone strives to implement.
Moreover, the cancellation of the employment contract could dis-
suade in-house candidates from accepting functions as corporate
officers. The implementation of these recommendations would also
have had the effect of depriving Mr. Emmanuel FABER of rights
attached to his employment contract, these rights having steadily
vested over the years of his professional career at Danone based
on his seniority (18 years) and effective work, notably the severance
pay and long-term benefits (such as participation in group plans),
benefits that in any event could not exceed the ceiling of two years
worth of compensation (fixed and variable).
Besides, the Board noted the fact that the French Financial Markets
Authority (“
Autorité des Marchés Financiers
”) considers that a detailed
explanation of the maintenance of the executive's employment con-
tract justifies the non-compliance with the Code's recommendation.
3. Mr. Emmanuel FABER's attendance rate
Over the past three years, Mr. Emmanuel FABER's attendance ratewas
100% at meetings of the Board and committees on which he served,
i.e.
the Social Responsibility Committee and Strategy Committee.
4. Obligation to retain shares issued through the exercise of
stock options and performance shares
In 2007, the Board instituted an obligation for corporate officers
to retain shares issued through the exercise of stock options and
performance shares, with the retention amount set at 35% of the
net capital gain on acquisition.
The Board expanded this system in 2012 by setting an overall ob-
jective on the number of DANONE shares to be retained in the case
of performance shares or shares created through the exercise of
stock options, with the number of shares to be retained equal to
four years' fixed compensation in the case of corporate officers
and two years' fixed compensation in the case of other Executive
Committee members. Once this threshold is attained the share
retention obligation is considered to have been fulfilled.
The share retention obligation was reviewed by the Board in con-
nection with the renewal of Mr. Emmanuel FABER's term of office.
The Board concluded that this share retention obligation was
sufficiently demanding. Specifically, the Board felt that given its
high level, the mechanismwas comparable to and made it possible
to achieve the same objective as the AFEP-MEDEF Code, which
calls for the purchase of shares following the lock-up period for
performance shares.
Appointment of a new Director (6
th
resolution)
The February 22, 2016 meeting of the Board of Directors, acting
on the recommendation of the Nomination and Compensation
Committee, reviewed the situation of Mrs. Clara GAYMARD, whose
appointment as a Director is proposed to you.
1. Mrs. Clara GAYMARD's skills and expertise
A French national, Mrs. Clara GAYMARD, 56, is a graduate of the
Ecole Nationale d'Administration (ENA, class of 1986, Denis Diderot).
Mrs. Clara GAYMARD has exercised numerous high government
functions in France, starting with the French Public Audit Office
(
Cour des comptes
) as an auditor and then as a public auditor. She
then became the assistant to the head of French Trade Office
in Cairo (1991-1993), then headed up the European Union office
(sub-directorate for Northern-Southern Europe) in the foreign eco-
nomic relations department (DREE) of the Ministry of the Economy
and Finance. In June 1995, she was named director of the office of
Colette CODACCIONI, Minister for Solidarity between Generations.
She was then appointed Assistant Director of SME Support and
Regional Action at the DREE (1996-1999) before being named head
of the SME Mission (1999-2003). From 2003, she served as Goodwill
Ambassador in charge of foreign investments and as President of
the French Agency for International Investments (AFII). She joined
General Electric (GE) in 2006, where she became President of GE
France and then President of the Northwest Europe region from
2008 to 2010. Still serving as Chairman and CEO of GE France, in
2009 Clara GAYMARDwas named Vice-President of GE International
for Government Sales and Strategy, and then in 2010 Vice-President
for Governments and Cities, under the chairmanship of Jeffrey R.