Groupe Renault - 2020 Universal Registration Document

324 GROUPE RENAULT I UNIVERSAL REGISTRATION DOCUMENT 2020 Find out more at group.renault.com 03 COMPENSATION OF DIRECTORS AND CORPORATE OFFICERS CORPORATE GOVERNANCE Quantifiable criteria for the 2021 financial year (0% to 100% of fixed compensation) The new strategic plan "Renaulution" was presented in January 2021, aiming to shift Groupe Renault’s strategy from the search for volumes to value creation. The first phase of this "Renaulution" strategic plan will run until 2023 and will focus on improving margins and cash generation. In order to ensure a close link between the Group's strategy and the compensation policy, it is therefore proposed, as compared to the compensation policy for 2020, to remove one criterion and to add two new criteria: the "Return on Capital Employed (ROCE)" criterion replaces the "Turnover" criterion in order to give priority to profitability objectives based P on capital employed, in line with the new value creation strategy; and; the "Fixed Costs (FC)" criterion has been added since the reduction of fixed costs is key for the first phase "Resurrection" of the strategic plan P in order to ensure the success of the second phase "Renovation" of the plan. In addition, the other criteria of the 2020 compensation policy are maintained because of their importance for the Group. These criteria are: Group operating margin (Group OM); P Cash generation - Free cash flow (FCF); and P CO 2 emissions (CAFE regulation). P An equal weighting of 20% has been assigned to each of them. Group operating margin (Group OM) Free cash flow (FCF)* Return on capital employed (ROCE) CO 2 emissions - CAFE regulation ** Fixed costs (FC) Targets The operating margin is P the key indicator of the Company’s profitability. A high level of free cash P flow demonstrates the use of strict financial discipline within the Company, allowing growth to be funded and the possibility of dividend payments. ROCE measures the P profitability of capital invested. It reflects value creation. This criterion, which is a P major stake for carmakers, measures the average emissions of passenger cars registered in Europe, based on CAFE regulations (see section 2.2.3 of the Universal registration document). This criterion measures P the reduction of the Group's fixed costs. It ensures that the Group's "break-even" point is reduced. Weighting (as a percentage of fixed compensation) 20% maximum. P 20% maximum. P 20% maximum. P 20% if on target and P maximum. 20% maximum. P Payout rate 0% if the operating P margin is strictly lower than the budget. 16% if the operating P margin is equal to the budget. 20% if the operating P margin is equal to or higher than budget +0.2 points. Linear interpolation if the P operating margin is between budget and budget +0.2 points. 0% if free cash flow is P strictly lower than the budget. 24% if free cash flow is P equal to the budget. 30% if free cash flow is P equal to or higher than budget +50%. Linear interpolation if P free cash flow is between budget and budget +50%. 0% if ROCE is strictly P lower than the budget. 16% if ROCE is equal to P the budget. 20% if ROCE is equal to or P higher than the budget +2,5%. Linear interpolation if P ROCE is between budget and budget +2,5%. 0% if the level of CO 2 P emissions is strictly above the regulatory target. 20% if the level of CO 2 P emissions is equal to or lower than the regulatory target. 0% if the amount of fixed P costs is strictly higher than the budget 16% if the amount of P fixed costs is equal to the budget. 20% if the amount of P fixed costs is equal to or lower than the budget -3%. Linear interpolation if the P amount of fixed costs is brtween budget -3% and budget. For reasons of commercial confidentiality, the Company does not disclose ex-ante target figures for these performance criteria. However, it will publish ex-post the rate of achievement of these criteria. The FCF in the 2021 budget includes €1 billion dividend from RCI Banque. * Based on the CAFE regulation for passenger vehicles registered in Europe. CAFE = Corporate Average Fuel Economy. ** Qualitative criteria for the 2021 financial year (0% to 50% of fixed compensation) The qualitative criteria are evolving compared to the 2020 compensation policy in order to take into account the stakes of the new strategic plan "Renaulution" which was presented in January 2021. The criterion of CSR commitments and that of customer satisfaction/quality are maintained. Achievement of these three qualitative criteria contributes directly to the Group's performance “Renaulution” new strategic plan Quality of CSR commitments Customer Satisfaction / Quality Target The success of the new strategic plan is a P priority for the Group's sustainability. This criterion is confirmed. It aims to P strengthen the consideration of stakeholders’ interests, thus contributing to the Company’s sustained performance Product quality and customer satisfaction P directly contribute to the Group’s performance. Weighting (as a percentage of fixed compensation) 20% if on target and maximum P 15% if on target and maximum P 15% if on target and maximum P Indicators Implementation of the new organization by P Brand Development of the 8 key models of the P "Renaulution" plan Level of invoicing within the Alliance P between Renault, Nissan and Mitsubishi Health and safety (accident frequency rate) P Gender pay-gap ratio P Defining the Climate plan (strategy, P timetable and indicators) Reduction of incident rate P Customer satisfaction level P It should be noted that pursuant to Article L. 22-10-34 of the French Commercial Code, payment of the annual variable compensation to the Chief Executive Officer for the 2021 financial year is subject to its approval by the Annual General Meeting to be held in 2022 to approve the financial statements for the financial year ending December 31, 2021.