Ubisoft 2016 Annual Report Download - page 56

Governance, risks, riskmanagement andinternalcontrol
3Compensation of corporate offi cers
COMPARATIVE BASIS
The Chairman and Chief Executive Offi cer’s compensation should be
considered in relation to the practices of similar groups to Ubisoft.
For this, the Compensation Committee relied on a comparative
study by Tower Watson, an independent fi rm specializing in the
subject and commissioned by the Ubisoft Group Human Resources
Department, as well as on benchmark studies of the compensation
of Chairmen and Chief Executive Offi cers in Canada and Europe
(Spencer Stuart, IFA and Ernst & Young).
The Tower Watson study focused on all components of compensation
(fi xed, variable and long-term incentives) paid in 2013 to the
Chairmen and CEOs of around 20, mostly SBF120, companies.
These companies were selected based on their business sector,
global footprint and size, measured in terms of sales, workforce
and market capitalization. The panel included companies in the
entertainment sector, high-tech industries and the media, with
sales in the region of €1 billion (the “Study”).
Based on the study’s outcome, the compensation of Mr. Yves
Guillemot appeared to be below the market average, both for the
annual fi xed component and for long-term incentives, while the
annual variable component was non-existent. The Compensation
Committee decided to introduce an annual variable compensation
and an exceptional compensation for the 2014-2015 fi nancial year
in order to partly address this situation. With regard to the past
fi nancial year, the Compensation Committee retained the principle
of an annual variable compensation but not that of exceptional
compensation. However, no changes were made to the maximum
overall amount that may be granted (100% of the annual fi xed
compensation).
SUMMARY TABLE OF COMPENSATION OWED OR PAID TO THE CHAIRMAN AND CHIEF EXECUTIVE OFFICER FOR THE
FINANCIALYEAR ENDED MARCH31, 2016
Year to March31, 2016
Gross fi xed
compensation Annual variable compensation(1) Exceptional
compensation(2) Performance shares(3) (accounting valuation) Directors’ fees
€500,004 145,000(3) N/A €617,965 €40,000
(1) Subject to quantitative and qualitative criteria
(2) Subject to achieving a predefi ned level of EBIT
(3) Subject to internal and share price performance conditions
BREAKDOWN
The compensation of Mr. Yves Guillemot, Chairman and Chief
Executive Offi cer, for the fi nancial year ended March 31, 2016,
comprises the following components:
Annual compensation
♦ an annual fi xed compensation
The gross annual fi xed compensation of the Chairman and
Chief Executive Offi cer has remained unchanged since 2008
at €500,004;
♦
an annual variable compensation the target value of
which is set at 100% of the fi xed compensation based
on the achievement of the criteria defi ned below. Entitlement
is also conditional upon the achievement of a minimum level
of performance (the threshold) defi ned in accordance with an
index based on a sample of comparable companies (threshold
of the weighted average EBIT of the MSCI World Small Cap
Information Technology Index) as at March 31, 2016.
Criteria type % of the variable Criteria description Weighting
Minimum Target Maximum
Quantitative 80%
(Maximum €400k) Contingent on an average annual Group EBIT €160million 0%
€200million
51%
€239million
100%
Qualitative 20%
(Maximum €100k)
1. Digital progress (change in downloads and
in-game revenue) 0% 10% 10%
2. Employee satisfaction rate (based on a
biannual satisfaction survey: ability to
motivate and retain employees)
0% 10% 10%
- Registration Document 2016
54