(Agreement between BNP Paribas and Chief Executive Officer Jean-Laurent Bonnafé)
The Annual General Meeting, acting in accordance with the quorum and majority requirements applicable to Ordinary General Meetings, having read the special report prepared by the Statutory Auditors on agreements and commitments falling within the scope of articles L.225-38 et seq. of the French Commercial Code, approves the agreement between BNP Paribas and Chief Executive Officer Jean- Laurent Bonnafé relating to the indemnity he could be entitled to receive when he leaves office.
Presentation of the resolution
Resolution five asks the General Meeting to approve the agreement concluded between the Bank and Mr. Jean-Laurent Bonnafé related to the severance package to be owed to him in case of a revocation at the initiative of the Board of Directors from his position as a Chief Executive Officer. This agreement complies with the recommendations of the AFEP-MEDEF Code to which your Bank subscribes.
In July 2012 Mr. Bonnafé quit the employment contract that had bound him to the Bank since 1993, as had been announced at the General Meeting of 23 May 2012. The amount of the compensation depends on the achievement of the following performance criteria used to define Mr. Bonnafé’s variable annual remuneration: growth in net earnings per share over a year and the increase in the amount of gross operating income in relation to the budget validated by the Board of Directors. These two criteria each account for half of the appraisal of quantitative performance and align Mr. Bonnafé’s interests with those of the shareholders.
The Chief Executive Officer will receive compensation equal to twice the sum of his fixed remuneration and his annual target variable remuneration for the year preceding his departure only if the rate of achievement of each of the two above-mentioned criteria reached 80% of the assigned targets in two of the last three accounting periods before he left office..
If this condition is not met and provided the Bank has generated at least positive net income Group share in two of the last three years preceding his departure, compensation limited to twice the amount of the fixed and variable remuneration owed for 2011 will be paid. Reference to 2011 corresponds to the last year of Mr. Bonnafé’s salaried activity. Compensation to be paid will be reduced by half if Mr. Bonnafé leaves office during the year preceding that in which he is entitled to retire.
Company note on the 5th. resolution added to the ISS report:
- Either an indemnity based on the last annual remuneration of Mr. Bonnafé as an employee i.e. his fixed and variable remuneration due on 2011 with no possible indexation. Criteria of performance are based on the positive annual net incomes over two out of the last three fiscal years. This set up fits with the peculiar conditions existing in France in terms of retirement process applicable to an executive being promoted.
- Or an indemnity linked to the completion of two performance conditions (earning per share evolution and budgeted gross operating income). The rate of 80% of achievement corresponds to the difficult and volatile environment in which the Bank is acting.