Michelin : Corporate Governance Michelin

May 2020

A solid Governance

A solid governance - characteristics of a partnership limited

by shares

Michelin's governance is robust, stable, and focused on the long-term responsibility of senior executives. Operating as a partnership limited by shares, as defined by law, regulations and the Bylaws, offers the Company a number of key advantages

• Meets the fundamental principle of a clear segregation of management and supervisory powers
• Offers shareholders a rarely found level of assurance that the Group is run in their medium- to long-terminterests, particularly during times of volatile markets or economic crisis. The General Partners have unlimited personal liability for the debts incurred by Michelin
• Fosters direct and transparent ties with shareholders

3

A solid governance - structure of the Partnership limited by shares

General Partners

SAGES - Société Auxiliaire de Gestion

Florent Menegaux

• Unlimited joint and personal liability for the Company's debts
• Say on pay resolutions are subject to their approval (Ordinary general meeting) as well as extraordinary resolutions

"Profit shares" allocated under the Bylaws

Managers	Term:
4 years

Florent Menegaux - Managing Chairman and General Partner

Limited Partners

Shareholders

• Liability limited to the amount of their investment
• Ultimate decision-making power in the event of a disagreement between the General Partners and the Limited Partners

Share of profits in the form of a dividend

Supervisory Board

9 members of which 1 Lead independent member

Approve the appointment of the Managers

Elect the members of the Supervisory Board

Adopt the financial statements approved by Management

Appoint the Statutory

Auditors

Statutory

Term:Auditors 4 years

Yves Chapot - General Manager

• Administer and manage the Company

4

• Exercises permanent oversight of the Company's management and reviews the financial statements
• Reviews strategic roadmaps and advises without intervening in management approved by Management
• Ensures that shareholders' rights are respected

Compensation for serving on the Supervisory Board

(previously referred to as « attendance fees »)

Compensation and Appointments Committee

Audit Committee

A solid governance - the General Partners, a complementary role

SAGES - Société Auxiliaire de Gestion	Florent Menegaux
Non-Managing General Partner	Managing General Partner
348,300 Michelin shares as of december 31, 2019	38,628 Michelin shares as of december 31, 2019

Unlimited joint and personal liability for the Company's debts

Guarantees permanence and is responsible of ensuring Company's continuity of leadership in the position of CGEM's manager were to fall vacant

In association with the Supervisory Board, ensures management continuity through the implementation of a succession plan

Recommends candidates for election as Manager of CGEM at the Shareholders Meetings, and, as applicable, submits recommendations to the Supervisory Board for the re-election of Managers or their removal from office

Chairman : Mr. Jacques de Chateauvieux

Shareholders: members of the founding family, current and former Michelin executives and qualified persons from outside the Group

A long-term Commitment

5

May 2020

Supervisory Board

The Supervisory Board - 9 members

Michel Rollier

Non-independent member (non-executive)

Chairman of the Supervisory Board

Member of the Compensation and Appointments Committee

Olivier Bazil	Barbara Dalibard	Jean-Pierre Duprieu	Aruna Jayanthi
Independent member	Independent member	Independent member	Independent member
Chairman of the Audit	Senior independent	Member of the	Member of the
member
Committee	Audit Committee	Compensation and
Chair of the
		Appointments Committee
	Compensation and
	Appointments Committee

	Anne-Sophie de la Bigne	Monique Leroux	Thierry Le Hénaff	Cyrille Poughon
	Independent member	Independent member	Independent member	Non-independent member
	Member of the Audit Committee*	Member of the	Member of the	(non-executive)
	Member of the	Member of the
	Audit Committee	Audit Committee
	Compensation and	Audit Committee
7
Appointments Committee

*Until July 2019

The Supervisory Board - overview

8

Changes within the Supervisory Board

Re-election of Supervisory Board members		Nomination

Anne-Sophie de la Bigne	Jean-Pierre Duprieu
Independent member	Independent member
Member of the	Member of the
Compensation and	Audit Committee
Appointments Committee

Leaving (post AG 2020)

	Olivier Bazil
	Independent member
9	Chairman of the Audit
Committee

Patrick de La Chevardière

Independent member

Chairman of the Audit

Committee

Patrick de La Chevardière was born in 1957 and is a French national.

He is currently a director of Schlumberger and until July 2019 was the Group's Chief Financial Officer and a member of the Executive Committee of the Total Group, where he spent his entire career.

Patrick de La Chevardière is a graduate of École centrale. He began his career as a drilling engineer in the Exploration and Production division (1982-1989), before joining the Finance Department (1989-1995). He subsequently served as head of the Operations and Subsidiaries Division (1995-2000), Asia Director in the Refining

and Marketing division (2000-2003), deputy Chief Financial Officer (2003-2008) and member of the Management Committee (2005), and Chief Financial Officer and member of the Executive Committee (from 2008).

Supervisory Board members : experience and expertise

10

The Supervisory Board activities

Supervisory Board		Audit Committee		Compensation and Appointments Committee

• 9 members of which 1 senior independent member
• 5 meetings

Some issues examined by the Supervisory Board:

-	the challenges facing the Group's brands
-	a report on the integration of businesses acquired in
	recent years and their financial and technological
	synergies

• 5 members (until July, 31st 2019)
• 4 meetings

The main purpose of the meetings held in 2019:

• the integration of the recently acquired Fenner and Camso groups
• product risk management

• 4 members
• 3 meetings

The main purpose of the meetings held in 2019:

• Review of the corporate officers' compensation
• Review of Supervisory Board members' independence and any conflicts of interest

- the industrial transformation

- health and safety and environmental risks associated - Executive management succession plan with industrial operations

- an assessment of the Group's employment model and

leadership model

- employee representation on the Supervisory Board

- strategic business reviews (several meetings)

- proposed acquisitions (several meetings)

- …

• supply Chain productivity plan
• cost efficiency plan
• risk management processes and the internal audit program
• execution of the OPE business process management system program

• Recommendations concerning the re-election of Supervisory Board members at the Annual Shareholders Meetings of May 17, 2019 and June 23, 2020
• Variable compensation policy

11

May 2020

Group Management

The Group Management - internal organization

13

The Group Management - the Executive Committee, 10 members

• The Managers and the Executive Committee of 8 members

Managing Chairman and General partner: Florent Menegaux

General manager and Chief Financial Officer: Yves Chapot

DB1 : Executive Vice President, Automotive, Motorsport, Experiences, and Americas Regions: Scott Clark

DB2 : Executive Vice President, Road Transportation and European Regions: Laurent Bourrut

DB3 : Executive Vice President, Specialties and Africa/India/Middle East, China, East Asia & Australia Regions: Serge Lafon

DB4 : Executive Vice President, Services & Solutions, High Tech Materials: Sonia Artinian-Fredou

Executive Vice President, Manufacturing: Jean-ChristopheGuérin

Executive Vice President, Research & Development: Eric Philippe Vinesse

Executive Vice President & Chief HR Officer : Jean-ClaudePats

Executive Vice President, Engagement and Brands: Adeline Challon-Kemoun

14

May 2020

Say on pay 2019

Say on Pay 2019 - compensation policies applicable to

Management in 2019

Covid-19 impacts on compensation awarded in respect of 2019 and paid in 2020:

Considering the efforts that the Michelin Group's employees and other stakeholders have been called upon to make in order to deal with the consequences of the Covid-19 health crisis, the Managers Florent Menegaux and Yves Chapot announced their intention to waive 25% of their annual variable compensation for 2019 resulting from application of the criteria presented hereafter. Consequently, if the Annual Shareholders Meeting approves the components of the compensation paid or awarded to the Managers for 2019, the amount corresponding to the waived compensation will be not be paid to them.

In addition, CGEM will pay the sum corresponding to these waived compensations to national Covid-19 related charities.

16

Say on Pay 2019 - Florent Menegaux, Managing Chairman,

Managing General Partner

Fixed compensation

(paid and awarded)

€900,000

Annual variable compensation

(may be awarded)

€1,344,346(2)

0 to 20% of Profit Shares

Long-term incentive bonus (awarded)

Subject to performance conditions on 3 years

N/A(4)

0 to 30 % of Profit Shares

Fringe Benefits(1) : €8,627

Annual variable compensation and the Long-term incentive bonus will be deducted from the Profit Shares(3)

Quantifiable criteria:	Quantifiable and qualitative criteria:
1. Level of Consolidated net income	1. Digital strategy
6% of Profit Shares	2. CSR/Human rights
2. Annual growth in Sales	3. Group transformation support
3. Annual free cash flow (excluding
acquisitions)

4. Efficiency project SG&A/ gross margin

0 of 10% of Profit Shares	0 of 4% Profit Shares
Achievement 2019 : 9% / 16%	Achievement 2019 : 3.95% / 4%

Achievement 2019 : 12.95% / 20% 149.37% as a % of fixed compensation

1. Growth in the Michelin share price vs. CAC 40 (from 0 to 11 % of Profit Shares)

2. CSR Performance (from 0 to 8 % of Profit Shares)

• MEF
• Employee Engagement

3. Growth in Segment Operating Income(5) (from 0 to 11 % of Profit Shares)

• Cap : at 2.5x annual fixed compensation of 2019
• Profit Shares payable out of distributable income for 2021 under conditions: - Approval of the corresponding resolutions by the Annual Shareholders
  Meeting called to approve the 2021 financial statements and the compensation concerned
  - Profit Shares payable out of distributable income for 2021
  - Subject to the availability and amount of Profit Shares for distribution in 2022 out of 2021 profit, after deducting annual variable compensation due for 2021
• F. Menegaux will have to invest in Michelin shares 20% of the long-term incentive bonus received at the end of the three-year period

	(1)	Company car
	(2)	Will be reduced by 25% following Florent Menegaux's decision to waive part of his variable compensation for 2019 (consequences of the Covid-19 health crisis)
17	(3)	Based on calculation of Annual variable compensation and Cash-settled deferred variable compensation: 0,6 % Group's consolidated net income €10,380,258.65
(4)	Simulation at December 31,2019 of the deferred variable compensation awarded in respect of 2019: €1,136,336.11. N/A : Not Applicable
(5)	SOI : based on current business scope and comparable accounting methods, excluding changes in exchange rates.

Say on Pay 2019 - Yves Chapot, General Manager

Fixed compensation

(paid and awarded)

€600,000

Fringe Benefits(1) : €9,253

Annual variable compensation

(may be awarded)

€465,035(2)

Based on 150% of fixed compensation

Long-term incentive bonus (awarded)

Subject to performance conditions on 3 years

N/A(3)

Based on 100 % of fixed compensation

Quantitative criteria:

1. Growth in SOI(4)

2. Annual growth in Sales

3. Annual free cash flow (excluding acquisitions)

Quantifiable and qualitative criteria:

1. Digital strategy

2. CSR/Human rights

3. Group transformation support

1. Growth in the Michelin share price vs. CAC 40 (from 0 to 35 % of criteria results)
2. CSR Performance (from 0 to 30% of criteria results)

• MEF
• Employee Engagement

3. Growth in SOI(4) (from 0 to 35% of criteria results)

4. the Efficiency project SG&A /gross margin

Maximum 80% of the base	Maximum 20% of the base
Achievement 2019 : 31.88 / 80	Achievement 2019 : 19.79 / 20
> Ceiling : 120% of the annual average of the annual variable compensation
		paid to Mr. Chapot for 2019, 2020 and 2021

Achievement 2019 : 51.67 / 100

77.50 % as a % of fixed compensation

1. Company car
2. Will be reduced by 25% following Yves Chapot's decision to waive part of his variable compensation for 2019 (consequences of the Covid-19 health crisis)

18	(3)	Provision as of December 31, 2019 : €93,000. N/A : Not Applicable
(4)	SOI : based on current business scope and comparable accounting methods, excluding changes in exchange rates

Say on Pay 2019

JD- Senard, Managing Chairman and General Partner (until May, 17th 2019)

€1,067,946

Fixed compensation

(paid and awarded)

€411,022

(prorated to the period served in 2019)

Fringe Benefits(1) : €3,529

	Annual variable compensation
			Long-term incentive bonus
	(awarded)
	€653,395
		-
	From 0 to 18% of Profit Shares
			Non awarded in 2019
	(prorated to the period served in 2019)

Annual variable compensation and the long-term incentive bonus will be deducted from the Profit Shares(3)

Quantitative criteria:

1. Level of Consolidated net income

8 % of Profit Shares

2. Annual growth in Sales

3. Annual free cash flow (excluding acquisitions)

4. Efficiency project SG&A/Gross margin

Quantifiable and qualitative criteria:

1. Digital strategy

2. CSR/Human rights

3. Group transformation support

		From 0 to 6% of Profit Shares	From 0 to 4% of Profit Shares
		Achievement 2019 : 10% / 14%	Achievement 2019 : 3.95% / 4%
		Achievement 2019 : 13.95% / 18%
		146.80% as a % of fixed compensation
19	(1)	Company car
(2)	Overall achievement rate of 13.95%/18% (€1,448,045.08) prorated over the period served by Jean-Dominique Senard in 2019, corresponding to 5/12. This results in an amount
	of €603,395.21 which, together with the €50,000 paid for Compagnie Financière Michelin SCmA (CFM) in respect of his position as General Partner of that company, gives a
		total of €653,391.5 payable in respect of 2019.
	(3)	Based on calculation of Annual variable compensation and Cash-settled deferred variable compensation : 0,6 % of Group Consolidated net income €10,380,258.65

Compensation paid or awarded to the members of the

Supervisory Board

Amounts paid in 2019			Amounts awarded in
in respect of 2018*				respect of 2019**
	€554,992			€660,777

/! No variable compensation was paid to them in 2019 or awarded to them in respect of that year.

The Chairman and independent members of the Supervisory Board are joining the Managers by deciding to donate 25% of their 2019 compensation received in 2020 to foundations in their respective countries, which are part of the fight against Covid-19.

*The amounts paid in 2019 were awarded in respect of 2018 out of the total annual compensation of €555,000 decided by the Annual Shareholders Meeting of May 13, 2016

**The amounts awarded in respect of 2019 have been determined in accordance with the principles and practices approved by the Supervisory Board in 2019, based on the total annual compensation of €770,000 decided by the Annual Shareholders Meeting of May 17, 2019

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2019 compensation

Michel Rollier, Chairman of the Supervisory Board

• Compensation consistent with the policy applied for the top executives of other CAC 40 companies
• Most of the fee is contingent on his attendance rate at meetings of the Supervisory Board and the Committee of which he is a member

60% of the fee is tied to his attendance rate at meetings of the Board and its Committees

Individual attendance rate in 2019

87.5%*

Attendance fees for 2019

€112,800

/! Michel Rollier is joining the Managers by deciding to donate 25% of his 2019 compensation received in 2020 to a foundation which is part of the fight against Covid-19.

21	*Michel Rollier was exceptionally prevented from attending the meeting on October 7, after he
was the victim of a minor accident that left him temporarily housebound.

Compensation paid during fiscal year 2019

Florent Menegaux

Yves Chapot

Jean-Dominique Senard

22

Compensation ratios of the Managers

and the Chairman of the Supervisory Board

The ratios presented below have been calculated in such a way as to disclose information related to the function, in order to guarantee, as far as possible, the relevance and consistency of comparative information across the entire reporting period.

The ratios are based on the fixed and variable compensation paid during the years indicated to employees who were present throughout the year, as well as on the performance shares awarded in those years, measured at fair value.

As the Company is a holding company without any employees, the disclosures required by Article L. 225-37-3-I-6 and 7 of the French Commercial Code referring to Article L. 226-8-2-1 of the Code, concerning the corporate officer-to-worker compensation ratio is not applicable. The Company has nonetheless chosen to disclose these ratios, based on available historical data, for its main French subsidiary, Manufacture Française des Pneumatiques Michelin, which employed over 81% of the Michelin Group's total workforce in France at December 31, 2019. This subsidiary is engaged in manufacturing, sales, and research and development activities and also hosts the Michelin Group's corporate departments.

23

Compensation ratios of the Managers

and the Chairman of the Supervisory Board

11.0 %		5.6 %		9.5 %

24

May 2020

Say on pay 2020

Management and Supervisory Board Compensation Policies

for 2020

The 2020 Compensation Policy is the subject of two proposed resolutions to be presented at the Annual Shareholders Meeting of June 23, 2020 (6th and 7th résolution)

The Management and Supervisory Board Compensation Policies must :

• Be compatible with the Company's corporate interests:
• • This Compensation Policy establishes a competitive framework aligned with the Group's strategy and business environment. The policy is designed to increase medium and long-term performance and competitiveness
• Contribute to the Company's marketing strategy:
• • The Managers' variable compensation (annual, long-term) represents the predominant part of their total compensation
  • The amount they receive in variable compensation depends on the achievement of objectives related to the Group's main perform ance indicators, which also apply to the employees of Group companies
• Contribute to the Company's long-termsustainability of the business:
• • The performance indicators applicable to their variable compensation (annual and long-term) focus on sustained performance in line with the
    Group's strategy => Managers. The Compensation Policy takes into account the position as General Partner => Managing Chairman
  • As from 2020, part of their variable compensation consists of performance shares that are subject to vesting conditions linked to the achievement of performance objectives over several years => Managers
  • Most of the compensation of the Supervisory Board is based on their attendance rate at Board and Committee meetings => Supervisory Board

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2020 Compensation policy for the Managers

Fixed compensation

Resolutions n°6 and 7

Considering the efforts that the Michelin Group's employees and other stakeholders have been called upon to make in order to deal with the consequences of the Covid-19 health crisis, the Managing Chairman, the General Manager and the Non-Managing General Partner have decided, with the unanimous backing of the Supervisory Board, to:

• maintain the Managers' fixed compensation at the amounts decided at the time of their appointment, i.e. €900,000 for Florent Menegaux and €600,000 for Yves Chapot
• to reduce this fixed compensation by 25% for the period during which employees are furloughed.

27

2020 Compensation policy for the Managers

Long-term variable compensation: performance share rights

Resolution n°25

The 2020 Compensation Policy provides for the use of a simpler mechanism that is even more closely aligned with the components of the long-term compensation paid to Michelin employees

• the Managers are no longer entitled to a cash-settledlong-term incentive bonus
• instead, they participate in the annual performance share plans set up for employees, on the same terms and based on the same criteria, except for certain terms that are necessary by virtue as their position as Managers and corporate officers; and
• new performance criteria have been added for all plan participants (employees and Managers) to take into account the changing market environment in which the Group's businesses operate and the Group's strategy

Note : in line with the dynamic new variable compensation policy designed to increase employee engagement by giving them a greater stake in the Group's earnings performance, the Managers propose granting five shares each to the employees of the main French subsidiaries.

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2020 Compensation policy for the Managers

Florent Menegaux, Managing Chairman, General Partner

Fixed

compensation

€900,000

Annual variable compensation

0 to 20% of Profit Shares

Performance shares

Subject to performance conditions on 3 years

• Capped at 0.05% of the Company's share capital
• Capped at 100% of annual fixed compensation

Fringe Benefits(1) : -

Annual variable compensation and the Long-term incentive bonus will be deducted from the Profit Shares(2)

Quantifiable criteria:	Quantifiable and qualitative criteria:
1. Level of Consolidated net income	1. Deployment of the Group's strategy
4% of Profit Shares	2. Employee safety
2. SOI(3) evolution	3. Implementation of the synergies
arising from recent acquisitions
(from 0 to 8% of Profit Shares)
3. Annual Structural free cash-flow
(from 0 to 8% of profit Shares

1. Growth in the Michelin share price vs. Stoxx Europe 600 (annual average)

Weight: 30%

2. CSR performance

• Michelin Environmental Footprint
• Employee engagement rate

Weight: 30%

							3. Operating performance: growth in revenue (excluding tires
							and distribution) and return on capital employed - ROCE(4)
			0 to 16% of Profit Shares	0 to 4% of Profit Shares
							Weight: 40%
			The following will be applied to each criterion exceptfor the one concerning net income:
			• a trigger point below which no compensation will be due;		➢	the Managers would be required to hold 40% of the vested shares for
			• an intermediate tranche between the trigger point and 100% of the objective, with			as long as they remained in office;
			the compensation prorated to the achievement rate for the objective;		➢	the vested free shares would be delivered to him only if Profit Shares
			• 100% of the objective, corresponding to the level at which the maximum			were distributed in respect of the year preceding the one in which the
			compensation for the criterion would be payable.			shares are issued
29	(1)	Company car
(2)	Based on calculation of Annual variable compensation and Cash-settled deferred variable compensation: 0,6 % Group's consolidated net income
	(3)	SOI : based on current business scope and comparable accounting methods, excluding changes in exchange rates
	(4)	Total consolidated ROCE (i.e. including acquisitions and companies accounted for by the equity method)

2020 Compensation policy for the Managers

Yves Chapot, General Manager

Fixed

compensation

€600,000

Fringe Benefits(1) : -

Annual variable compensation

150% of fixed compensation

Performance shares

Subject to performance conditions on 3 years

• Capped at 0.05% of the Company's share capital
• Capped at 100% of annual fixed compensation

Quantifiable criteria:

1. Level of Consolidated net income

2. SOI(2) evolution

3. Annual Structural free cash-flow

Maximum 80% of the base

Quantifiable and qualitative criteria:

1. Deployment of the Group's strategy

2. Employee safety

3. Implementation of the synergies

arising from recent acquisitions

Maximum 20% of the base

1. Growth in the Michelin share price vs. Stoxx Europe 600 (annual average)

Weight: 30%

2. CSR performance

• Michelin Environmental Footprint
• Employee engagement rate

Weight: 30%

3. Operating performance: growth in revenue (excluding tires and distribution) and return on capital employed - ROCE(3)

The following will be applied to each criterion includingfor the one concerning net income:

• a trigger point below which no compensation will be due;
• an intermediate tranche between the trigger point and 100% of the objective, with the compensation prorated to the achievement rate for the objective;
• 100% of the objective, corresponding to the level at which the maximum compensation for the criterion would be payable.

Weight: 40%

• the Managers would be required to hold 40% of the vested shares for as long as they remained in office

30	(1)	Company car
(2)	SOI : based on current business scope and comparable accounting methods, excluding changes in exchange rates
(3)	Total consolidated ROCE (i.e. including acquisitions and companies accounted for by the equity method)

May 2020

Say on pay 2018

Say on Pay 2018 - 2018 compensation (cash-settled and fringe benefits) Jean-Dominique Senard, Managing Chairman (until May 17, 2019)

(in €, before payroll and other taxes)

Annual Fixed

Single-Criterion

Multi-Criteria

Long-term incentive

Annual Variable

Annual Variable

Performance conditions over 3 years

€1,100,000

€796,621

€965,903

LTI due

LTI awarded

€1,362,465

-

8% of the Consolidated

For up to 14% of the Consolidated

Base: €1,800,000***

Base: €1,080,000

Calculation Base**

Calculation Base**

The Variable Components and the Long-term incentive are paid out of the Profit Shares allocated to the General Partners under the Bylaws,

capped at 0.6% of the Group's consolidated net income and approved at the Annual Shareholders Meeting as part of the appropriation

Fringe benefit*: €8,470

of net income

Single-

Criterion

19% Fixed

26%

Multi-

Criteria

23% LTI

32%

Paid to the General Partners for the risk incurred by virtue of their unlimited joint and personal liability for the Company's debts

3 quantitative criteria	4 qualitative criteria	4 quantitative criteria
-	Annual growth in sales	-	Digital strategy	- Growth in Michelin's share price
	volume	-	CSR/Environment &		compared with that of the CAC40 index
-	Efficiency project		human rights	-	MEF measurement
- Annual free cash flow	-	Manager transition	-	Employee engagement rate
	excluding acquisitions	-	Group organization	-	Growth in consolidated
					operating income

*Company car

**Consolidated Calculation Base:

0.6% of the Group's consolidated net income

***As increased or reduced to reflect the percentage gain or loss in Michelin's share price over the three-year period from 2016 to 2018, namely 10.5%

Achievement in 2018:	Achievement in 2018:
62.90/100	44.58/50

Achievement in 2018: 107/150,

or 87.80% of Annual Fixed Compensation

Ceiling: 150% of the average of the Annual Variable Components paid to Jean-Dominique Senard for 2016, 2017 and 2018, and amount of Profit Shares available for distribution after deducting the Variable Compensation due for 2018

32

Say on Pay 2018 - 2018 compensation (cash-settled and fringe benefits) Florent Menegaux, Managing General Partner

(in €, before payroll and other taxes)

Annual Fixed

Single-Criterion

Multi-Criteria

Long-term incentive

Annual Variable

Annual Variable

Performance conditions over 3 years

€554,672

€312,374

€356,106

LTI due

LTI awarded

Base: €900,000

5% of the Consolidated

For up to 8.50% of the Consolidated

-

-

(Prorated to reflect the period served in 2018)

Calculation Base**

Calculation Base**

Base: €720,000

(Prorated to reflect the period served in 2018)

(Prorated to reflect the period served in 2018)

The Variable Components of compensation are paid out of the Profit Shares

Fringe benefit*: €5,392

Single-

Criterion

26%Fixed

45%

Multi-

MultiCriteria-Criteria

29%

Paid to the General Partners for the risk incurred by virtue of their unlimited joint and personal liability for the Company's debts

3 quantitative criteria	4 qualitative criteria
-	Annual growth in sales	-	Digital strategy
	volume	-	CSR/Environment &
-	Efficiency project		human rights
- Annual free cash flow	-	Manager transition
	excluding acquisitions	-	Group organization

4 quantitative criteria

• Growth in Michelin's share price compared with that of the CAC40 index
• MEF measurement
• Employee engagement rate
• Growth in consolidated operating income

Achievement in 2018:	Achievement in 2018:
62.90/100	44.58/50

Ceiling: 150% of the average of the Annual Variable Components paid to Florent Menegaux for 2018, 2019 and 2020, and

*Company car

**Consolidated Calculation Base:

0.6% of the Group's consolidated net income

Achievement in 2018: 107/150,

or 64.20% of Annual Fixed Compensation

amount of Profit Shares available for distribution after deducting the Variable Compensation due for 2020

33

Say on Pay 2018 - 2018 compensation (cash-settled and fringe benefits) Yves Chapot, General Manager

(in €, before payroll and other taxes)

Annual Fixed

€372,808

Base: €600,000

(Prorated to reflect the period served in 2018)

Fringe benefit*: €4,352

	Multi-Criteria				Long-term incentive
	Annual Variable				Performance conditions over 3 years
	€263,763			LTI due	LTI awarded
		-	-
	Maximum of 120% of fixed compensation
	(Prorated to reflect the period served in 2018)				Base: €600,000

Multi-

CriteriaFixed

41%59%

3 quantitative criteria

• Growth in consolidated operating income from recurring activities
• Level of consolidated inventories of finished and semi-finished products
• Level of Automotive segment tire sales volume

2 qualitative criteria

• Organizational transition
• Customer Service initiative/ Net Promoter Score

4 quantitative criteria

• Growth in Michelin's share price compared with that of the CAC40 index
• MEF measurement
• Employee engagement rate
• Growth in consolidated operating income

*Company car

**Liability recognized for the LTI: €94,200

34

Achievement in 2018:	Achievement in 2018:
37.61/70	20.78/30

Achievement in 2018: 58.39/100,

or 70.75% of Annual Fixed Compensation

Ceiling: 120% of the average of the Annual Variable Components paid to Yves Chapot for 2018, 2019 and 2020

Say on Pay 2018 - 2018 compensation (entitlement to additional benefits and oth advantages)

Jean-Dominique Senard, Managing Chairman

Florent Menegaux, Managing General Partner

Yves Chapot, General Manager

• Compensation for loss of office as a result of a change of strategy or a change of control, subject to performance conditions decided by the Supervisory Board
• Non-competeindemnity

No additional benefits were paid in 2018

• No other benefits
• No stock options
• No performance shares
• No attendance fees

35

Say on Pay 2018 - 2018 compensation (supplementary pension benefits)

=> Applicable to all senior executives of the two main French companies who have served for at least five years as a senior executive

1.5% of benefits vest each year, entitling participants to an annuity representing a replacement rate of up to 15% of the reference compensation

The replacement rate, including entitlements under compulsory plans, is capped at 35%, which is well below the 45% ceiling for fixed and variable compensation recommended in the AFEP/MEDEF Code

Payment of a gross annual maximum annuity after 10 years of service, conditional on participants ending their career with the company

Mr. Senard, Managing Chairman

Mr. Menegaux, Managing General Partner

Mr. Chapot, General Manager

Estimated amount of annual income at
December 31, 2018
Mr. Senard, Managing Chairman	€165,000
Mr. Menegaux, Managing General Partner	€135,000
Mr. Chapot, General Manager	€110,544

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Say on Pay 2018 - 2018 compensation

Michel Rollier, Chairman of the Supervisory Board

• No compensation is awarded to Michel Rollier aside from attendance fees, consistent with the policy applied for the top executives of other CAC 40 companies
• Most of the fee is contingent on his attendance rate at meetings of the Supervisory Board and the Committee of which he is a member

60% of the fee is tied to his attendance rate at meetings of the Board and its Committees

Individual attendance rate in 2018

100%

Attendance fees for 2018

€90,000

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