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CORPORATE GOVERNANCE STATEMENT
Remuneration of Executive Directors
The remuneration package of the members of the Executive
Committee comprises the following elements:
•
a fixed remuneration;
•
a variable remuneration, including a variable remuneration in
cash, and a bonus stock plan;
•
a stock option plan;
•
a savings and provident scheme, pension promises and other
benefits.
Fixed remuneration
The fixed remuneration of the members of the Executive Committee
is determined according to their individual duties and skills. It is
allocated independently of any result and is not indexed. It covers
their services as members of the Board of Directors and their
attendance at the various Committee meetings. Mr. Jean-Edouard
Carbonnelle, Mr. Xavier Denis, Mr. Jérôme Descamps and Mrs.
Françoise Roels attend the meetings of the Audit Committee and
Mrs. Françoise Roels attends the meetings of the Nomination,
Remuneration and Corporate Governance Committee, but they are
not members of these committees.
Variable remuneration
The variable remuneration is intended to remunerate the collec-
tive and individual contribution of the members of the Executive
Committee. Its amount is determined in function of the effec-
tive achievement of financial and qualitative objectives set and
assessed annually by the Board of Directors on the proposal of the
Nomination, Remuneration and Corporate Governance Committee.
These objectives are set according to criteria, weighed depend-
ing upon their importance, approved by the Board of Directors
on the proposal of the Nomination, Remuneration and Corporate
Governance Committee. In principle (target), the variable remuner-
ation amounts to 50% of the fixed annual remuneration, but can be
higher without ever exceeding 75%. The variable remuneration is
only paid once the budget has been attained up to at least 80%.
The analysis of the degree of achievement of the financial criteria
is done on the basis of accounting and financial data analysed by
the Audit Committee. The Nomination, Remuneration and Corporate
Governance Committee calculate what the variable remunera-
tion could be on the basis of the degree of achievement of the
objectives. This calculation only serves as a guidance for the final
setting of the variable remuneration. Indeed, this will also take into
account the specific situation of the company and of the market in
general. The Nomination, Remuneration and Corporate Governance
Committee then draws up a variable remuneration proposal and
submits it to the Board of Directors, which in turn assesses the
work of the Executive Committee, and finally determines the
amount of the variable remuneration to be granted.
There are no provisions concerning the recovery right of variable
remunerations paid based on inexact financial data other than
civil law provisions, being the application of the principle of undue
payment.
For the financial year 2014, the performance assessment criteria
were:
•
the net current result per share (40%);
•
the cost/income ratio (10%);
•
the regulatory debt ratio (10%);
•
the management of large-scale projects (40%).
The Nomination, Remuneration and Corporate Governance
Committee has assessed the achievement of the 2014 objectives
of the members of the Executive Committee and has proposed to
the Board of Directors a variable remuneration of 55% of the fixed
annual remuneration. This proposal has been accepted by the
Board of Directors.
From the 2013 financial year, and in strict application of the Law
of 06.04.2010, the Board of Directors decided to grant half of the
variable remuneration in cash and the other half in the form of
a phantom stock unit plan spread over time. The plan involves
making a cash payment, over three years, of the equivalent value of
Cofinimmo ordinary shares fictitiously awarded free of charge.
At the meeting of 05.02.2015, the Board of Directors decided, as for
the 2013 financial year, (i) to spread over a period of three years the
allocation of the remuneration for 2014 and (ii) for half of the varia-
ble remuneration, to make the amount finally attributed in 2016 and
2017 dependent on changes in the share price of the Cofinimmo
ordinary shares since 05.02.2015 (provisional allocation).
The variable remuneration will therefore be spread over three
years, with a 50% share of the variable remuneration paid in 2015,
25% finally allocated in February 2016 and 25% finally allocated in
February 2017.
In order to be able to determine the amount of the variable remu-
neration to finally allocate in 2016 and 2017, half of the variable
remuneration as determined on 05.02.2015 is fictitiously converted
into a number of stock units by dividing it by the market fair value of
the share on that date.
These units will be converted into a cash amount at the time of final
allocation. This amount is determined by multiplying the predeter-
mined number of shares by the market fair value of the share of
the company on the final allocation date, increased by the gross
dividend allocated since the provisional allocation date.
A detailed description of the phantom stock unit plan can be seen
in Appendix I of the Corporate Governance charter, which is availa-
ble at the company’s website
www.cofinimmo.com.
For the 2015 financial year, the granting of the variable remunera-
tion will depend on the achievement of the following key objectives:
•
the net current result per share (25%);
•
the debt management (20%);
•
the operational management of the large-scale projects (15%);
•
the occupancy rate of the office portfolio (10%);
•
the cost/income ratio (10%);
•
other (20%).
Stock option plan
The stock option plan was offered for the first time in 2006. Its
main objective is to encourage the maximisation of Cofinimmo’s
long-term value by linking management’s interests to those of the
shareholders and to strengthen the long-term outlook.
Stock options are granted in a discretionary manner to the mem-
bers of the Executive Committee. No objective is set in this respect.
The Board of Directors considers that this remuneration is not to be
considered as a variable remuneration within the meaning of the
Law of 06.04.2010. An option’s exercise period stands at ten years
as of the date of the offer.
On the recommendation of the Nomination, Remuneration and
Corporate Governance Committee, the Board of Directors decided in
its session of 11.06.2009 to extend the period of exercise of options
granted in 2006, 2007 and 2008 by five years, in application of the
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