02 Corporate governance report Management and Supervisory Board compensation policies for 2025 Long-term variable compensation: performance share rights In order to align the Managers' medium/long-term objectives with the objectives assigned to performance share plans for eligible Group employees, this compensation has taken the form of Michelin performance share rights since 2020. The conditions, criteria and objectives applicable to the 2025 performance share grants have been established within the framework of the authorization to issue shares to the Managers and employees of Michelin group companies approved by Annual Shareholders Meeting of May 12, 2023(1). On the recommendation of the Compensation and Appointments Committee, the Supervisory Board decided to use this authorization to roll over the 2024 compensation policy indicators in the 2025 policy. The objectives have been adjusted and the industrial Michelin Environmental Performance (i-MEP) indicator has been replaced by two Materials indicators, presented in the Sustainability Statement: n the renewable and recycled materials rate (RRMR) (2), which is central to the transformation of Michelin’s manufacturing operations and also measures the CO2 emissions of its raw material suppliers; n the reduction in tire rolling resistance(3), which measures Michelin’s contribution to Scope 3 emissions and represents the most significant source of CO2 emissions by tires in use. The main specific characteristics of the performance share rights that may be awarded to the Managers in 2025 are as follows: n the awards are decided annually by the Managing Chairman on the proposal of the General Partners, after the performance conditions and criteria have been determined by the Supervisory Board; n the total performance shares awarded to the Managers during the period of validity of the proposed extraordinary resolution of the Annual Shareholders Meeting of May 12, 2023 will be capped at 0.1% of the Company's share capital on the date of the Shareholders Meeting at which the resolution is adopted; n in addition, for the Managing Chairman, the number of performance shares granted in 2025 would be limited to an amount equivalent to 140% of his 2025(4) fixed compensation and, for the General Manager, to an amount equivalent to 120% of his 2025(4) fixed compensation; these levels correspond to the median rates for their counterparts in CAC 40 companies(5); n the Managers will be required to keep 40% of the vested shares for as long as they remain in office and will be banned from hedging the equity risk on the performance shares before the end of this lock-up period; n concerning the Managing Chairman and General Partner, the vested performance shares would be delivered to him only if the Profit Share was distributed in respect of the year preceding the one in which the shares were issued; n if a Manager ceases to hold this position: l following his resignation or removal from office due to mismanagement, all the performance share rights would be forfeited, l for any other reason, such as the expiration of his term before the end of the vesting period, he would retain a number of performance share rights initially awarded to him prorated to the time served in office during the vesting period, and the reference three-year period would continue to run, during and beyond the end of his term(6). (1) 14th resolution adopted by a majority of 87.04% of the votes cast. Details of this authorization are provided on pages 455 to 457 of the 2022 Universal Registration Document. (2) See the references provided in the notes to the following table. (3) See the references provided in the notes to the following table. (4) Calculated on the basis of the average opening price of the Michelin share over the 20 trading days preceding the grant date, less a discount equal to the value of dividends not received during the vesting period. (5) Based on the Compensation and Appointments Committee’s 2022 analysis of the convergent results of several studies carried out by leading compensation consultants. (6) In the event of disability or death, the total number of rights would be awarded and the reference period would not apply. 113 2024 UNIVERSAL REGISTRATION DOCUMENT_MICHELIN
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