Registration document 2007 - Total.com

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5 108 Corporate Governance Report of the Chairman of the Board of Directors (Article L 225-37 of the French Commercial Code) b) Recommends annually to the Board the list of directors who may be considered as “independent directors” of the Company; and c) Proposes methods for the Board to evaluate its performance. 2. With respect to compensation: a) Makes recommendations and proposals to the Board regarding: (i) compensation, pension and insurance plans, in-kind benefits, and other compensation, including severance benefits, for the Chairman or the Chief Executive Officer of TOTAL S.A., and (ii) awards of stock options and restricted share grants, including specific awards to the Chairman or the Chief Executive Officer; b) Reviews the compensation of members of the Executive Committee, including stock option plans, restricted share grants and equity-based plans as well as pension and insurance plans and in-kind benefits. Nominating & Compensation Committee membership and practices The Committee is made up of at least three directors designated by the Board of Directors. A majority of the members must be independent directors. Members of the Nominating & Compensation Committee may not receive from the Company and its subsidiaries any compensation other than: (i) directors’ fees paid for their services as directors or as members of the Nominating & Compensation Committee; and (ii) compensation and pension benefits related to prior employment by the Company which are not dependant upon future work or activities. The Committee appoints its Chairman as well as a secretary, who is a senior executive of the Company. The Committee meets at least twice a year. The Committee invites the Chief Executive Officer of the Company to present recommendations. The Chief Executive Officer may not be present during deliberations regarding his own compensation. While maintaining the appropriate level of confidentiality for its discussions, the Committee may request that the Chief Executive Officer provide it with the assistance of any senior executive of the Company whose skills and qualifications could facilitate the handling of an agenda item. TOTAL – Registration Document 2006 If it deems it necessary to accomplish its duties, the Committee may request from the Board the resources to engage external consultants. The Committee reports on its activities to the Board of Directors. Nominating & Compensation Committee activity The Committee met on January 30, July 12 and November 28 in 2006, with an average effective attendance of 88.9%. Messrs. Bertrand Collomb, Michel Pébereau and Serge Tchuruk, each an independent director, are the members of the committee and Mr. Michel Pébereau serves as its Chairman. The Committee proposed to the Board of directors the list of directors to be recommended for appointment by the shareholders’ meeting. In addition to its proposals for the compensation of the Chief Executive Officer and regarding stock options and restricted share grants, the Committee also proposed to modify the rules for awarding directors’ fees. This proposal was adopted by the Board, subject to the approval of the total amount to be distributed to directors by the shareholders’ meeting to be held on May 11, 2007. The Committee also proposed a policy for determining the compensation and other advantages awarded to the Chairman and to the Chief Executive Officer. The Committee directed a self-evaluation of the Board and selected the external consultancy retained to assist with this evaluation. The self-evaluation was conducted in the fall of 2006 and confirmed that the Board of Directors had made appropriate choices in organizing its operations. A discussion of the results of this self-evaluation was on the agenda of the Board meeting held on February 13, 2007. The Committee also conducted a financial review of the compensation of the Company’s management bodies and of the Company’s pension and insurance plans, in preparation for the disclosure of this information in the Company’s annual report for 2006. Director Independence The Committee proposed to the Board a list of independent directors based on generally recognized corporate governance principles. The Nominating & Compensation Committee proposed that the Board consider a director to be independent when that director has “no relationship, of any nature, with the company, group or its management which could compromise the independent exercise of his judgment”, pursuant to the AFEP- MEDEF (French corporate associations) report of 2002. At its meeting on February 13, 2007, the Board, acting on a proposal from the Committee, determined that, as of December 31, 2006, the following directors were independent:
Messrs. Bouton, Collomb, Desmarais, Jacquillat, Jeancourt- Galignani, Levene, Lippens, Pébereau, de Rudder, Tchuruk and Vaillaud. These directors meet the independence criteria contained in the AFEP-MEDEF report of 2002, with the exception of Mr. Tchuruk, who has been a director of the Company for a period exceeding the twelve years recommended by the report. The Board, taking into account the nature of the Company’s industry, with the associated long-term investments and activities, considered that service as a director over a long period corresponds to certain experience and authority that strengthens the independence of a director. Upon this basis, the Board concluded that Mr. Tchuruk was an independent director. In evaluating the independence criteria under the report related to material client, supply, banking or investment banking relationships between a director and the Company, the Board considered that the business dealings between Group companies and the banking institutions where Messrs. Bouton and Pébereau are members of the administrative or management bodies are not material since these dealings represent less than 0.1% of their net banking income. The Board concluded the Messrs. Bouton and Pébereau were independent directors. Under this evaluation, 73.3% of the members of the Board of Directors are considered to be independent. The Board also noted that there were no potential conflicts of interest between the Company and its directors. Policy for determining the compensation and other benefits of the Chairman and of the Chief Executive Officer Based on a proposal by the committee, the Board adopted the following policy for determining the compensation and other advantages of the Chairman and of the Chief Executive Officer: • Compensation for the Chairman and the Chief Executive Officer is set by the Board of Director after considering proposals from the Compensation Committee. Such compensation shall be reasonable and fair, in a context that values both teamwork and motivation within the Company. Compensation for the Chairman and the Chief Executive Officer is related to market practice, work performed, results obtained and responsibilities held. • Compensation for the Chairman and the Chief Executive Officer includes both a fixed portion and a variable portion, each of which are reviewed annually. • The amount of variable compensation may not exceed a stated percentage of fixed compensation. Variable compensation is determined based on pre-defined quantitative and qualitative criteria. Quantitative criteria are limited in number, objective, measurable and adapted to the Group’s strategy. Corporate Governance Report of the Chairman of the Board of Directors (Article L 225-37 of the French Commercial Code) Variable compensation is designed to reward short-term performance and progress towards medium-term objectives. The qualitative criteria for variable compensation are designed to allow exceptional circumstances to be taken into account, when appropriate. • Stock options are designed to align the long-term interests of the Chairman and the Chief Executive Officer with those of the shareholders. Awards of stock options are considered in light of the amount of the total compensation paid to the Chairman and the Chief Executive Officer. The exercise price for stock options awarded is not discounted compared to the market price for the underlying share. Stock options are awarded at regular intervals to prevent opportunistic behavior. The Chairman and Chief Executive Officer are required to hold a number of shares of the Company equal in value to two years of the fixed portion of their annual compensation. • The Chairman and Chief Executive Officer do not receive restricted share grants. Recent Corporate Governance Developments At its meeting on February 13, 2007, the Board of Directors, acting on a proposal by the Nominating & Compensation Committee, enacted certain changes related to the Group’s corporate governance, effective as of February 2007. The Board amended the Directors Charter, subsequently renamed the Rules of Procedure of the Board of Directors, mainly to take into account the fact that separate individuals would serve as Chairman and as Chief Executive Officer and to create a separate Nominating & Governance Committee and Compensation Committee to divide the duties of the former Nominating & Compensation Committee. The Board also adopted charters for these committees. Also on February 13, 2007, the Board of Directors appointed Mr. Christophe de Margerie as Chief Executive Officer of the Company. Mr. Thierry Desmarest remains Chairman of the Board of Directors. 5 TOTAL – Registration Document 2006 109
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Registration Document 2006
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Registration Document 2006 This is
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Key figures Selected financial info
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116,842 Key figures Operating and m
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Refined product sales including Tra
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Business overview History and strat
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Upstream TOTAL’s Upstream segment
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Exploration & Production Exploratio
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Production For the full year 2006,
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Presentation of production activiti
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Europe Business overview Exploratio
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Africa TOTAL has been present in Af
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this zone through its subsidiaries
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North America Since 2004, TOTAL has
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Trinidad & Tobago TOTAL holds a 30%
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TOTAL also has a 50% interest in th
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Europe TOTAL’s production in Euro
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K6-GT platform, in anticipation of
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The Group also holds a 20% interest
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Gas & Power The Gas & Power divisio
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Asia Pacific The Hazira re-gasifica
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In Morocco, Temasol, in which TOTAL
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Refining & Marketing As of December
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Refined products The table below se
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capacity oil recycling plant in Fra
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In 2006, the principal market bench
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Base Chemicals TOTAL’s Base Chemi
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Specialties TOTAL’s Specialties s
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Investments Main investments made o
Page 59 and 60: Property, Plant and Equipment TOTAL
Page 61 and 62: Board of Directors Executive Commit
Page 63 and 64: Management Report of the Board of D
Page 65 and 66: Market environment 2006 2005 2004 E
Page 67 and 68: Upstream results Liquids and gas pr
Page 69 and 70: Downstream results For the full yea
Page 71 and 72: Liquidity and capital resources Lon
Page 73 and 74: Research and development Research a
Page 75 and 76: Trends and outlook Outlook Since th
Page 77 and 78: Risk Factors Market risks p. 76 •
Page 79 and 80: The Group has implemented strict po
Page 81 and 82: The non-current debt in dollars des
Page 83 and 84: Grande Paroisse An explosion occurr
Page 85 and 86: Myanmar Under the Belgian “univer
Page 87 and 88: Risk management Risk evaluations le
Page 89 and 90: TOTAL, like other major internation
Page 91 and 92: Insurance and risk management Organ
Page 93 and 94: Corporate Governance Board of Direc
Page 95 and 96: Daniel Bouton 56 years old. Inspect
Page 97 and 98: Bertrand Jacquillat 62 years old. A
Page 99 and 100: Michel Pébereau 64 years old. Hono
Page 101 and 102: Management General Management On Ma
Page 103 and 104: Corporate Governance Compensation o
Page 105 and 106: Pensions and other commitments (Art
Page 107 and 108: Within this framework, the Board’
Page 109: Members of the Audit Committee may
Page 113 and 114: establishes and maintains procedure
Page 115 and 116: Employees, Share Ownership, Stock O
Page 117 and 118: Corporate Governance Employees, Sha
Page 119 and 120: TOTAL stock options Corporate Gover
Page 125 and 126: Restricted share plans as of Decemb
Page 127 and 128: TOTAL and its shareholders Listing
Page 129 and 130: Four-for-one stock split The Genera
Page 131 and 132: Information Summary TOTAL and its s
Page 133 and 134: Dividends Dividend policy In accord
Page 135 and 136: Share buybacks The General Meeting
Page 137 and 138: Summary table of transactions compl
Page 139 and 140: cancels and replaces the unused por
Page 141 and 142: which was approved by the French Co
Page 143 and 144: Shareholder structure Distribution
Page 145 and 146: Non-resident individual taxpayers e
Page 147 and 148: The Committee also worked on the co
Page 149 and 150: 2007 Calendar February 14 Results f
Page 151 and 152: Financial information Historical fi
Page 153 and 154: Additional information Financial in
Page 155 and 156: General information Share capital p
Page 157 and 158: Pursuant to this authorization, the
Page 159 and 160: Potential capital as of December 31
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General information Share capital J
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Directors’ Charter and Committees
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Other matters Employee incentives a
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Information on holdings General inf
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Statutory auditors’ report on the
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Consolidated statement of income TO
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Consolidated statement of cash flow
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On February 13, 2007, the Board of
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G. Earnings per share Earnings per
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equal to the market price. For unli
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The net periodic pension cost is re
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(iii) Portion of intangible assets
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A. Information by business segment
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Appendix 1 - Consolidated financial
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ADJUSTMENTS TO OPERATING INCOME 200
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In 2006, gains and losses on sales
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Property, plant and equipment prese
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14) Other non-current assets As of
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The variation of the weighted-avera
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18) Employee benefits obligations P
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The components of the net periodic
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20) Financial debt and related fina
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Impact on net income The amount of
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23) Commitments and contingencies A
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Other guarantees given Non-consolid
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25) Payroll and staff For the year
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The classification by strategy and
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B) Financial instruments related to
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29) Market risks Oil and gas market
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As a result of its policy for manag
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3) The Group has recorded provision
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53.2% 95.7% Elf Aquitaine 99.5% 100
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Oil and gas reserves p. 238 • Cha
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Changes in liquids reserves Appendi
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Changes in liquids and gas reserves
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Costs incurred in oil and gas prope
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Appendix 2 - Supplemental oil and g
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Other information Accounting for ex
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Appendix 3 - TOTAL S.A. Special aud
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(Free translation of a French langu
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Balance Sheet (TOTAL S.A.) Appendix
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Statement of changes in Shareholder
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2) Property, plant and equipment As
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6) Shareholders’ equity A) Common
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7) Contingency reserves As of Decem
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11) Translation adjustment The appl
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20) Commitments As of December 31 (
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TOTAL share purchase options plans
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Appendix 3 - TOTAL S.A. Parent comp
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List of marketable securities held
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Distribution of earnings 2006 Net d
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Social and environmental informatio
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AVERAGE COMPENSATION PER MONTH - TO
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Environment Pursuant to French law
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Consolidated financial information
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European Cross Reference List 10. C
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TOTAL S.A. Registered Office: 2, pl
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Registration document 2007 - Total.com

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