Information on the remuneration and financial conditions of the


Issy-les-Moulineaux, October 8, 2021

In accordance with the recommendations of the AFEP-MEDEF Code of Corporate Governance (“AFEP-MEDEF Code”), Sodexo provides the following information on the compensation of its executive corporate officers as determined by the Board of Directors on October 7, 2021, during of the Proposal of the Compensation Committee.

The Board of Directors has decided to strengthen Denis Machuel’s non-compete undertaking, in order to better protect the Group. The impact of the Covid-19 crisis on Sodexo’s market environment, on the one hand, and the experience of Denis Machuel, and the strategic discussions held over the last few months in which he participated, on the other hand, led us to amend its non-compete agreement. New competitors, including digital disruptors, have been added, and the duration of the agreement has been extended from two to three years. In return, the amount of the related non-competition indemnity was increased.

The Sodexo Board of Directors considers that the financial terms of Denis Machuel’s departure comply with the spirit and recommendations of the AFEP-MEDEF Code and the Group’s compensation policy. These terms are the result of a reflection intended to strengthen the protection of the interests of Sodexo and its shareholders in an exceptional and pivotal context for the Group, given that:

  • Since his appointment in 2018, Denis Machuel was already the subject of a non-compete agreement intended to protect the interests of the Group;
  • The Covid-19 pandemic had an unpredictable and significant impact on the Group’s competitive environment and led to the acceleration of the arrival of new market “disruptors”;
  • The non-compete indemnity, which takes into account the additional restrictions added by the Board of Directors, complies with the ceiling recommended by the AFEP-MEDEF Code for such an indemnity, of two years of compensation (fixed plus variable).

Denis Machuel

Compensation for the 2021 financial year

Denis Machuel’s fixed compensation amounts to 900,000 euros.

In accordance with the compensation policy approved at 97% by the General Meeting of January 12, 2021, on an exceptional basis and given the unprecedented health crisis caused by the Covid-19 pandemic, the Board of Directors has decided to set the budget for the 2020-2021 financial year by half. Thus, the financial performance objectives were determined in October 2020 for the first half and in March 2021 for the second half.

The rate of achievement of each of the financial objectives for the second half of the 2020-2021 financial year and the extra-financial objectives for the 2020-2021 financial year will be determined by the Board of Directors on October 26, 2021 during the closing accounts for the year. The levels of achievement of each of these criteria will be communicated in the 2021-2021 Universal Registration Document.

The payment of his variable compensation will be submitted to the vote of the General Meeting of December 14, 2021 called to approve the financial statements for the year ended August 31, 2021.

  • Supplementary pension plan

During the 2021 financial year, the Company replaced the supplementary pension plan provided for in Articles 39 of the General Tax Code and L. 137-11-1 of the Social Security Code with a plan provided for in Article L. 137-11-2 of the French social security code, which has similar characteristics.

Under this plan, Denis Machuel will benefit from an annual right of 0.5% of his fixed and variable compensation for the period from January 1 to September 30, 2021, provided that he has reached a minimum rate of 80% achievement of the objectives of his annual variable compensation for the 2021-2021 financial year.

Indemnities for the 2022 financial year and financial departure conditions1

Having terminated his mandate as Chief Executive Officer with effect from September 30, 2021, the Board of Directors proposes, on the recommendation of the Compensation Committee, to compensate him as follows.

The amount of Denis Machuel’s fixed annual compensation of €900,000 remains unchanged for the 2022-2022 financial year.

His fixed compensation paid will be calculated pro rata temporis from September 1 to 30, 2021, the end date of his term as Chief Executive Officer.

He therefore received €75,000 in fixed compensation for the month of September 2021.

  • Annual variable compensation

Given the expiry of Denis Machuel’s term of office on September 30, 2021 and the difficulty of measuring his performance over such a period, the Board of Directors has decided to set the amount of his variable compensation for the 2020-2022 financial year. at his target level: 100% of his fixed compensation.

The variable part of the compensation due to Denis Machuel for the 2022 financial year would therefore be 75,000 euros, calculated pro rata temporis from September 1 to 30, 2021, the end date of his term as Chief Executive Officer.

  • Allocation of performance shares for the 2022 financial year

No performance shares will be awarded to Denis Machuel for the 2022 financial year.

  • Unvested performance share plans

In recognition of his contribution to the development of the Group, which he joined in 2007 and of which he had been Chief Executive Officer since January 2018, and his management of the Covid-19 crisis, and in accordance with the compensation policy adopted by the General Meeting General Meeting of January 12, 2021, the Board of Directors decided to remove the condition of presence applicable to unvested performance share plans and to maintain the performance shares in proportion to the effective presence of Denis Machuel within of the group.

There will be no acceleration of the vesting period of the plans and the performance conditions of these plans will continue to apply.

Denis Machuel will thus be able to retain part of his rights to performance shares granted in 2018, 2019 and 2020: 41,514 performance shares out of the 75,000 initially granted. These shares were valued at €2,872,221 under IFRS on the grant date. However, this valuation does not take into account the satisfaction of the performance conditions which will be measured at the end of the corresponding vesting period.

These performance conditions are particularly demanding, as evidenced by the non-compliance with the performance conditions linked to the 2016 and 2017 plans. impact of the Covid-19 crisis on the Group’s performance.

At this stage, it is not possible to determine the number of shares that will be obtained upon the definitive acquisition of each of these plans, nor their value.

It should be noted that Denis Machuel expressly refused to receive any compensation in the event of termination of his duties. He will therefore not receive any severance pay.

Upon the appointment of Denis Machuel as Chief Executive Officer in 2018, the Board of Directors decided to subject him to a non-compete agreement in the event of his departure, in order to protect Sodexo’s interests.

However, the scope of the non-competition agreement initially entered into no longer reflects recent and unpredictable developments in Sodexo’s business sector, massively impacted by the Covid-19 crisis.

In this context, the 2018 non-competition undertaking not being sufficiently protective of the interests of the Company, the Board of Directors has decided to modify the scope of this non-competition undertaking.

The changes made by the Council are as follows:

  1. the duration of the non-compete agreement was extended from two years to three years;
  2. the list of competitors has been extended to take account of changes in the competitive environment;
  3. clauses such as the non-solicitation of Group Senior Leaders and significant customers have been added; and
  4. the financial compensation under the agreement was increased to 24 months of the fixed and variable annual compensation due to Denis Machuel for the 2021-2021 financial year.
  • Health insurance and life insurance

In accordance with the compensation policy, Denis Machuel, like all Sodexo SA employees, will benefit from health insurance and death insurance for a period of twelve months following the end of his mandate.

Sophie Bellon

The Board of Directors has put in place an interim governance until the appointment of a new CEO by unanimously deciding that as of October 1, 2021, the President will also assume the functions of interim CEO.

Sophie Bellon will therefore receive additional fixed compensation of €18,750 per month during the interim period, representing a theoretical total fixed annual compensation of €900,000.

The structure of the Chairman’s compensation will remain unchanged throughout the interim period, with no variable compensation or allocation of performance shares.

About Sodexo

Founded in Marseille in 1966 by Pierre Bellon, Sodexo is the world leader in services that improve Quality of Life, an essential factor in individual and organizational performance. Present in 64 countries, Sodexo serves 100 million consumers every day through its unique combination of On-site Services, Benefits & Rewards Services and Personal & Home Services. Sodexo offers its clients an integrated offer developed over more than 50 years of experience: from catering, reception, maintenance and cleaning, to the management of facilities and equipment; from services and programs promoting employee engagement to solutions that simplify and optimize their mobility and the management of their expenses, as well as home assistance, crèches and concierge services. Sodexo’s success and performance are based on its independence, its sustainable business model and its ability to continuously develop and engage its 420,000 employees worldwide.

Sodexo is part of the CAC Next 20, CAC 40 ESG, FTSE 4 Good and DJSI indices.

Key figures

19.3 billion euros in consolidated revenue for the 2020-2020 financial year

420,000 employees as of August 31, 2020

#1 Private employer based in France worldwide

64 countries

100 million consumers served daily

11.4 billion euro in market capitalization (as of October 7, 2021)

Contact

1 These elements of compensation are subject to the approval of the General Meeting of Shareholders of December 14, 2021.

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