3 _127 2023 UNIVERSAL REGISTRATION DOCUMENT_MICHELIN 3 CORPORATE GOVERNANCE REPORT Information about the components of compensation paid or awarded to the corporate officers Maximum value of all quantitative and quantifiable qualitative criteria 150% of annual fixed compensation Actual overall achievement rate 151.4%(1) Amount awarded after applying the cap (in €) 1,650,000.00(2) Capped achievement rate as a percentage of the fixed reference compensation (including the amount corresponding to the compensation as General Partner) 150.00% (1) This is a percentage determined on the basis of the Profit Share calculation (0.6% of consolidated net income for the year, in application of the 2023 remuneration policy) and not by reference to fixed remuneration. (2) Application of the criteria leads to an amount of €1,665,134.25, representing 151.40% of the reference fixed compensation (€1,100,000), vs. a ceiling of 150% (€1,650,000). All quantitative and qualitative objectives were set at the start of 2023 and were not adjusted during the year. The Compensation and Appointments Committee carefully reviewed achievement rates for each of the quantitative and qualitative criteria. Concerning the quantifiable qualitative criteria, the Committee's conclusions were as follows: ● for the “Implementation of the strategy (deployment of the transformations)” criterion, the Committee analyzed the results of the Balanced Score Card. Having noted the significant progress made in deploying the People, Profit and Planet aspects of Michelin’s strategy, the Committee decided that the indicator-based objectives had been 95%-met, nearly in line with the target of 100%; ● concerning the “corporate social responsibility” criterion (Total Case Incident Rate: improvements to the safety of Michelin Group employees), the Committee noted that the target had been exceeded and that the TCIR was close to the ceiling, at 1.01; ● for the “gender balance” criterion, the Committee noted that the percentage of Group management positions held by women (21.5%) was significantly above the target; ● for the “CO2 emissions (Scopes 1 and 2)” criterion, the Committee noted that actual emissions (2.163 mt) were almost on target; ● In conclusion, the Committee recommended to the Supervisory Board that the cumulative achievement rate in relation to all of the quantifiable qualitative criteria should be assessed as 151.4%. Taking annual fixed compensation of €1,100,000.00 as the calculation base, the annual variable compensation amounts to €1,665,134.25. As this amount exceeds the ceiling of 150% of the reference fixed remuneration, the actual amount due has been reduced to this ceiling, i.e. €1,650,000.00. After discussing the matter during its meeting on February 9, 2024, the Supervisory Board approved the Compensation and Appointments Committee’s recommendations, which were then also approved by the General Partners. 3.4.3.3 Long-term variable compensation granted in 2023: performance share rights On November 17, 2023, 65,164 performance share rights were awarded to Florent Menegaux(1). At December 31, 2023, these rights were valued at €1,047,089.10 and represented less than 0.0092% of the total Michelin shares outstanding at the year-end. This award was: ● authorized in an extraordinary resolution of the Annual Shareholders Meeting of May 12, 2023 (14th resolution); ● made on the proposal of the General Partners in application of the conditions and criteria set by the Supervisory Board that determine all the performance share awards, as presented in the 2022 Universal Registration Document and as they result from the 2023 compensation policy(2). In application of the 2023 compensation policy, the award is subject to the following specific rules: ● the Managers are required to hold 40% of the vested shares for as long as they remain in office; ● the Managing Chairman's award is limited to 140% of his fixed annual compensation for the award year; ● in addition, for the period of validity of the authorization (38 months), performance share rights awarded to the Managers may not exceed the equivalent of 0.1% of the Company's capital; this is a specific sub-cap applicable to the Managers within the overall cap of 1.5% applicable to all beneficiaries as mentioned in the above-mentioned resolution; ● concerning Florent Menegaux, Managing Chairman and General Partner, the vested performance shares would be delivered to him only if Profit Share was distributed in respect of the year preceding the one in which the shares are issued. In accordance with AFEP/MEDEF Code recommendation No. 26.3.3, the equity risk on the performance shares has not been hedged by Florent Menegaux and will not be hedged at any time during the holding period. (1) To improve year-on-year comparability and avoid taking into account stock market performance conditions, due to the excessive volatility of this indicator, for the determination of the discount rate, the fair value used to determine the number of shares to be awarded only takes into account the dividends not received during the vesting period. (2) Please refer to pages 111, 455 and 462 of the 2022 Universal Registration Document.
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