Connect - Schneider Electric
Connect - Schneider Electric Connect - Schneider Electric
7 GENERAL PRESENTATION OF SCHNEIDER ELECTRIC SA EMPLOYEE PROFIT-SHARING, STOCK OWNERSHIP > 5. Employee profit-sharing, stock ownership Profit-sharing plans Most of the Group’s French companies have profi t-sharing and other profi t-based incentive plans. The amounts paid by the Group’s French entities over the last fi ve years were: (in millions of euros) 2011 2010 2009 2008 2007 Profi t-based incentive plans and profi t-sharing plans 59.9 56.5 48.5 69.7 64.8 Almost 55% of the total from incentives and profi t-sharing was invested in the Schneider Electric shareholder funds and nearly 24% was cashed in by employees. The “Schneider Electric” employee shareholding Schneider Electric employees are the drivers of company growth. They are the main force behind the Group with their knowledge of the business and their involvement in the roll-out of Group strategy. By linking employees to its capital, Schneider Electric allows them to profi t from value creation other than by their salary, thus bringing together the interests of the employees and the Company. In countries where regulations permit, Schneider Electric offers its employees the opportunity to invest to restricted share capital increases. The Group’s last employee share issue took place in July 2011. This resulted in a subscription of 1.9 million shares. At December 31, 2011, employees held a total of 25,001,870 Schneider Electric SA shares through the corporate mutual funds or directly, representing 4.55% of the capital and 7.06% of the voting rights, taking into account double voting rights. 248 2011 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC Voting rights attached to shares held by corporate mutual funds are exercised by the Supervisory Boards of the funds. The Group’s employee shareholders are broken down as follows: 47% in France, 13% in the United States and 40% internationally, including China, India, Brazil and Russia. More than 30% of our employees are Group shareholders and are spread over 60 countries. Profit sharing bonus In 2011, employees of French entities received a EUR200 payment as a profi t sharing bonus. This bonus benefi tted from a 50% matching contribution when allocated to the Shareholder fund.
6. Performance share grants GENERAL PRESENTATION OF SCHNEIDER ELECTRIC SA PERFORMANCE SHARE GRANTS AND STOCK OPTION PLANS and stock option plans Performance share grant plans with performance criteria and stock option plans The fi gures below have been calculated where necessary to take account of the two-for-one share split, effective from September 2, 2011. Grant policy As part of its overall staff pay policy, each year Schneider Electric sets up a long-term incentive plan based on an annual allocation of stock grants, and, for employees who are US citizens or residents, Stock Appreciation Rights (SARs) that are akin to stock options, and stock options until December 2009. Since December 2010, stock options have no longer been granted. Phantom shares which track performance share grants have also been granted to certain benefi ciaries in emerging market countries. These plans are established by the Management Board, as authorized by the Supervisory Board, which takes decisions based on the report from the Remuneration, Appointments and Human Resources Committee. Benefi ciaries include members of Senior Management, top managers of the Group in all countries, high-potential managers and employees whose performance and potential were judged exceptional. Each year Schneider Electric increases the number of benefi ciaries of the annual plan. There were 1,579 benefi ciaries in 2009, 2,360 in 2010 and 2,637 in 2011. Allocations to Senior Management, including corporate offi cers, dropped from 17% of the total in 2006 to 11.1% in 2011. The annual plans are set up in December for the following fi scal year so that benefi ciaries can be informed of their stock option and performances shares grants at the same time as their targets for the year ahead. The annual plan for 2012 was set up in December 2011. It comprises the following plans, all of them subject to performance criteria: • performance share plan 13 and 13bis, concerning 647,943 shares and 608 benefi ciaries (French residents); • performance share plan 14 and 14bis, concerning 1,386,800 shares and 2,029 benefi ciaries (residents of countries other than France); • SAR plan, concerning 816,636 SARs and 145 benefi ciaries (American citizens or residents); • Phantom shares plan concerning 70,272 phantom shares and 274 benefi ciaries. Description of the shares allocated The vesting and lock-up periods for performance shares allocations to residents of France under plans 5 and 7 are three years and two years respectively. The vesting and lock-up periods for stock allocations made under plans 8, 10, 10bis, 13 and 13bis are at least two years each. The vesting period for performance shares allocations made to residents of countries other than France under plans 6, 9 and 11, 11bis, 12, 14 and 14bis is four years, with no lock-up period. Similarly the benefi ciaries of phantom shares have a vesting period of three years. performance shares grants and phantom shares vest only if the benefi ciary is a Group employee as of the vesting date and if certain performance targets, detailed below, are met (see page 253 ). Since January 2009, for members of the Management Board, and since December 2011 for members of the Executive Committee, allocations of stock grants are fully subject to the achievement of performance conditions. Description of the stock option plans The option exercise price is equal to the average closing price of the twenty trading days prior to the date of allocation by the Management Board. No discount is applied. Since 2006, the options have a ten year life. They may not be exercised until after the fourth year. However, they can be exercised before maturity in the case of a takeover bid for the Company’s shares. Exceptionally, options granted under plans 22, 23 and 25 may be exercised as from the fi rst year. Similarly, US citizens and residents may exercise their rights following the third year under certain plans. Options may only be exercised by Group employees. In addition, exercise of 50% of the options allocated is dependent on specifi c targets being met, detailed below (see page 251 ). Effective from January 2009, all of the options granted to members of the Management Board are subject to performance criteria. Description of Stock Appreciation Rights (SARs) SARs have the same vesting period and expiration date as the corresponding options or grants and are subject to the same performance criteria. The benefi ciary receives the proceeds in cash. 2011 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 249 7
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7 GENERAL PRESENTATION OF SCHNEIDER ELECTRIC SA<br />
EMPLOYEE PROFIT-SHARING, STOCK OWNERSHIP<br />
> 5. Employee profit-sharing, stock<br />
ownership<br />
Profit-sharing plans<br />
Most of the Group’s French companies have profi t-sharing and other profi t-based incentive plans.<br />
The amounts paid by the Group’s French entities over the last fi ve years were:<br />
(in millions of euros) 2011 2010 2009 2008 2007<br />
Profi t-based incentive plans and profi t-sharing plans 59.9 56.5 48.5 69.7 64.8<br />
Almost 55% of the total from incentives and profi t-sharing was invested in the <strong>Schneider</strong> <strong>Electric</strong> shareholder funds and nearly 24% was<br />
cashed in by employees.<br />
The “<strong>Schneider</strong> <strong>Electric</strong>” employee shareholding<br />
<strong>Schneider</strong> <strong>Electric</strong> employees are the drivers of company growth.<br />
They are the main force behind the Group with their knowledge of<br />
the business and their involvement in the roll-out of Group strategy.<br />
By linking employees to its capital, <strong>Schneider</strong> <strong>Electric</strong> allows<br />
them to profi t from value creation other than by their salary, thus<br />
bringing together the interests of the employees and the Company.<br />
In countries where regulations permit, <strong>Schneider</strong> <strong>Electric</strong> offers<br />
its employees the opportunity to invest to restricted share capital<br />
increases.<br />
The Group’s last employee share issue took place in July 2011.<br />
This resulted in a subscription of 1.9 million shares.<br />
At December 31, 2011, employees held a total of 25,001,870<br />
<strong>Schneider</strong> <strong>Electric</strong> SA shares through the corporate mutual funds or<br />
directly, representing 4.55% of the capital and 7.06% of the voting<br />
rights, taking into account double voting rights.<br />
248 2011 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC<br />
Voting rights attached to shares held by corporate mutual funds are<br />
exercised by the Supervisory Boards of the funds.<br />
The Group’s employee shareholders are broken down as follows:<br />
47% in France, 13% in the United States and 40% internationally,<br />
including China, India, Brazil and Russia. More than 30% of<br />
our employees are Group shareholders and are spread over<br />
60 countries.<br />
Profit sharing bonus<br />
In 2011, employees of French entities received a EUR200 payment<br />
as a profi t sharing bonus. This bonus benefi tted from a 50%<br />
matching contribution when allocated to the Shareholder fund.
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