Registration document 2007 - Total.com
Registration document 2007 - Total.com
Registration document 2007 - Total.com
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Messrs. Bouton, Collomb, Desmarais, Jacquillat, Jeancourt-<br />
Galignani, Levene, Lippens, Pébereau, de Rudder, Tchuruk and<br />
Vaillaud.<br />
These directors meet the independence criteria contained in the<br />
AFEP-MEDEF report of 2002, with the exception of Mr. Tchuruk,<br />
who has been a director of the Company for a period exceeding<br />
the twelve years re<strong>com</strong>mended by the report. The Board, taking<br />
into account the nature of the Company’s industry, with the<br />
associated long-term investments and activities, considered that<br />
service as a director over a long period corresponds to certain<br />
experience and authority that strengthens the independence of a<br />
director. Upon this basis, the Board concluded that Mr. Tchuruk<br />
was an independent director.<br />
In evaluating the independence criteria under the report related to<br />
material client, supply, banking or investment banking<br />
relationships between a director and the Company, the Board<br />
considered that the business dealings between Group<br />
<strong>com</strong>panies and the banking institutions where Messrs. Bouton<br />
and Pébereau are members of the administrative or management<br />
bodies are not material since these dealings represent less than<br />
0.1% of their net banking in<strong>com</strong>e. The Board concluded the<br />
Messrs. Bouton and Pébereau were independent directors.<br />
Under this evaluation, 73.3% of the members of the Board of<br />
Directors are considered to be independent.<br />
The Board also noted that there were no potential conflicts of<br />
interest between the Company and its directors.<br />
Policy for determining the <strong>com</strong>pensation and other<br />
benefits of the Chairman and of the Chief Executive<br />
Officer<br />
Based on a proposal by the <strong>com</strong>mittee, the Board adopted the<br />
following policy for determining the <strong>com</strong>pensation and other<br />
advantages of the Chairman and of the Chief Executive Officer:<br />
• Compensation for the Chairman and the Chief Executive<br />
Officer is set by the Board of Director after considering<br />
proposals from the Compensation Committee. Such<br />
<strong>com</strong>pensation shall be reasonable and fair, in a context that<br />
values both teamwork and motivation within the Company.<br />
Compensation for the Chairman and the Chief Executive<br />
Officer is related to market practice, work performed, results<br />
obtained and responsibilities held.<br />
• Compensation for the Chairman and the Chief Executive<br />
Officer includes both a fixed portion and a variable portion,<br />
each of which are reviewed annually.<br />
• The amount of variable <strong>com</strong>pensation may not exceed a<br />
stated percentage of fixed <strong>com</strong>pensation. Variable<br />
<strong>com</strong>pensation is determined based on pre-defined<br />
quantitative and qualitative criteria. Quantitative criteria are<br />
limited in number, objective, measurable and adapted to the<br />
Group’s strategy.<br />
Corporate Governance<br />
Report of the Chairman of the Board of Directors (Article L 225-37 of the French Commercial Code)<br />
Variable <strong>com</strong>pensation is designed to reward short-term<br />
performance and progress towards medium-term objectives.<br />
The qualitative criteria for variable <strong>com</strong>pensation are designed<br />
to allow exceptional circumstances to be taken into account,<br />
when appropriate.<br />
• Stock options are designed to align the long-term interests of<br />
the Chairman and the Chief Executive Officer with those of the<br />
shareholders.<br />
Awards of stock options are considered in light of the amount<br />
of the total <strong>com</strong>pensation paid to the Chairman and the Chief<br />
Executive Officer.<br />
The exercise price for stock options awarded is not<br />
discounted <strong>com</strong>pared to the market price for the underlying<br />
share.<br />
Stock options are awarded at regular intervals to prevent<br />
opportunistic behavior.<br />
The Chairman and Chief Executive Officer are required to hold<br />
a number of shares of the Company equal in value to two<br />
years of the fixed portion of their annual <strong>com</strong>pensation.<br />
• The Chairman and Chief Executive Officer do not receive<br />
restricted share grants.<br />
Recent Corporate Governance<br />
Developments<br />
At its meeting on February 13, <strong>2007</strong>, the Board of Directors,<br />
acting on a proposal by the Nominating & Compensation<br />
Committee, enacted certain changes related to the Group’s<br />
corporate governance, effective as of February <strong>2007</strong>. The<br />
Board amended the Directors Charter, subsequently renamed<br />
the Rules of Procedure of the Board of Directors, mainly to<br />
take into account the fact that separate individuals would serve<br />
as Chairman and as Chief Executive Officer and to create a<br />
separate Nominating & Governance Committee and<br />
Compensation Committee to divide the duties of the former<br />
Nominating & Compensation Committee. The Board also<br />
adopted charters for these <strong>com</strong>mittees.<br />
Also on February 13, <strong>2007</strong>, the Board of Directors appointed<br />
Mr. Christophe de Margerie as Chief Executive Officer of the<br />
Company. Mr. Thierry Desmarest remains Chairman of the<br />
Board of Directors.<br />
5<br />
TOTAL – <strong>Registration</strong> Document 2006 109