2013 Registration document and annual financial report - page 141

Registration Document 2013
139
Corporate Governance
3
Interests and Compensation
3.5. INTERESTS AND COMPENSATION
3.5.1. DIRECTORS’ AND OFFICERS’ COMPENSATION
Compensation policy for executive officers
Accor’s compensation policy for its executive officers complies
with the AFEP/MEDEF Code. As a result, the compensation paid
to executive officers is determined by the Board of Directors
based on recommendations put forward by the Compensation,
Appointments and Corporate Governance Committee, and is
benchmarked to compensation practices among leading French
companies.
As described in section 3.1 above, there were several changes
in the Company’s governance structure in 2013. Consequently,
the compensation of the persons who held executive officer
positions in the Company during the year is presented below in
chronological order. Mr. Citerne and Mr. Bazin, in their capacity
as, respectively, Chairman and Vice-Chairman of the Board of
Directors during the period of transition from April 23 to August
27, 2013, did not receive any compensation, as per their request,
for the exercise of these responsibilities.
In accordance with the AFEP/MEDEF Code, as amended in
June 2013, these compensation packages will be submitted to
an advisory vote at the next Annual Shareholders’ Meeting and a
separate presentation will be included in the notice of meeting.
Compensation payable to Mr. Hennequin
In 2013, Mr. Hennequin held the position of
Chairman and Chief
Executive Officer
of the Company from January 1 through April 23,
when his term of office was terminated.
The principles for determining Mr. Hennequin’s fixed and variable
compensation asChairman andChief ExecutiveOfficerwere approved
by the Board of Directors on November 2 and December 15, 2010.
The Board set Mr. Hennequin’s gross fixed compensation at
€750,000 for 2011, but decided that it would be increased annually
on a straight-line basis over a three-year period in order to reach the
same level as his predecessor’s fixed compensation by 2014,
i.e.
€1million. Consequently, Mr. Hennequin’s gross fixed compensation
for 2013 should have been €916,000. However, in view of the
Company’s announcement of a €100 million cost-savings plan for
2013-2014, Mr. Hennequin felt that his fixed compensation for
2013 should not be increased and therefore requested that the
Board keep it at the same level as for 2012,
i.e.
at a gross amount
of €833,000 for the year. The fixed compensation received by
Mr. Hennequin for the performance of his duties as Chairman
and Chief Executive Officer from January 1 through April 23,
2013 came to €262,802, as calculated on a proportionate basis.
When the Board established the principles for determining the
variable portion
of Mr. Hennequin’s compensation it decided
that his variable compensation could range from 0% to 150% of
a gross reference amount, which was set at €1,250,000 for each
year until 2014.
For 2013, the Board decided that the amount of his variable
compensation would be based on the achievement of the following
objectives:
ƒƒ
quantitative objectives, accounting for 60% of the total variable
compensation:
yy
consolidated EBIT in line with the budget,
yy
recurring free cash flow, after change in working capital, in
line with the budget;
ƒƒ
qualitative objectives, accounting for 40% of the total variable
compensation:
yy
expanding the hotel portfolio and carrying out the hotel
property disposal plan in line with the budget,
yy
quality of management of Mr. Hennequin,
yy
Accor’s total shareholder return (TSR) compared with that of
eight other listed international hospitality groups,
yy
the presentation of a strategic plan based on the Group’s
new business model.
On April 23, 2013, the Board assessed to what extent the objectives
for 2013 as a whole had been achieved as of that date. Based on
this assessment it set Mr. Hennequin’s variable compensation for
2013 at €412,000, calculated on a proportionate basis (
i.e.
156.8%
of his fixed compensation for 2013).
In line with the principles approved by the Board of Directors and
contained in its Bylaws, as Chairman and Chief Executive Officer,
Mr. Hennequin was not entitled to receive any
directors’ fees
.
Compensation payable to Mr. Caillère
In 2013, Mr. Caillère held the position of
President and Chief
OperatingOfficer
fromJanuary 1 throughApril 23, and subsequently
Chief Executive Officer
until August 27, when his term of office
was terminated.
The Board had set Mr. Caillère’s gross
fixed compensation
for 2013
at the same amount as for the two previous years,
i.e.
€600,000.
When the Board established the principles for determining the
variable portion
of Mr. Caillère’s compensation for 2013, it
decided that the amount of his variable compensation would be
based on the achievement of the following objectives:
ƒƒ
quantitative objectives, accounting for 70% of the total variable
compensation:
yy
consolidated EBIT in line with the budget,
yy
free cash flow, after change in working capital, in line with
the budget,
yy
flow-through ratio or reactivity ratio in line with the budget;
ƒƒ
qualitative objectives, accounting for 30% of the total variable
compensation:
yy
expanding the hotel portfolio and carrying out the hotel
property disposal plan in line with the budget,
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