Quadient S A : Remuneration report

CORPORATE GOVERNANCE REPORT

Remuneration report

2.3 Remuneration report

2.3.1 2022 REMUNERATION PAID TO THE DIRECTORS AND CORPORATE OFFICERS

The total remuneration and benefits in kind paid by Quadient S.A. and the companies it controls to the directors, Didier Lamouche, Chairman and Geoffrey Godet, Chief Executive Officer, during the financial year 2022, which ended 31 January 2023, were awarded based on the resolutions approved by the General Meeting of 16 June 2022. These resolutions approved the principles and criteria for setting, allocating and awarding the various elements of this remuneration.

At Quadient, the remuneration policy for the executive director is determined by the Board of directors, upon the Appointments and remuneration committee's proposal.

The Board of directors and the Appointments and remuneration committee refer to the recommendations of the Afep-Medef code when establishing the remuneration and benefits awarded to Quadient's executive directors. In accordance with these recommendations, they ensure that the remuneration policy complies with principles of comprehensiveness, balance, comparability, consistency, transparency, and moderation, also considering market practices and, more generally, Quadient's corporate interest.

2.3.1.1 2022 Remuneration paid to the directors

• TABLE #3 AFEP-MEDEF CODE: TABLE ON THE COMPENSATION RECEIVED BY NON-EXECUTIVE DIRECTORS

(In euros)	31 January 2023	31 January 2022
Remuneration of directors
Martha Bejar	58,500	58,500
Hélène Boulet-Supau	51,500	51,500
Éric Courteille	52,500	53,500
Virginie Fauvel	0	10,333
William Hoover Jr.	0	16,460
Christophe Liaudon, employee representing director	31,500	31,500
Nathalie Labia, employee representing director	31,500	31,500
Vincent Mercier	56,500	73,500
Richard Troksa	52,500	63,500
Nathalie Wright	38,833	41,500
Sébastien Marotte	31,500	10,500
Paula Felstead	41,500	8,584
TOTAL COMPENSATION OF NON-EXECUTIVE DIRECTORS	446,333	450,877
Other remuneration	-	-
Chairman remuneration as a director	30,000	30,000
Chief Executive Officer's remuneration of director	30,000	30,000
TOTAL REMUNERATION OF NON-EXECUTIVE DIRECTORS, CHAIRMAN AND CHIEF
EXECUTIVE OFFICER	506,333	510,877
Maximum amount authorized by the General Meeting	555,000	560,000

In relation to their respective mandate as a director, the Chairman of the Board and the Chief Executive Officer receive a fixed amount of 30,000 euros per year for 100% attendance. The Chairman and Chief Executive

Officer each regularly attend regular and ad hoc committee meetings as part of their mandates, and for ad hoc committees each of them have declined additional compensation for their attendance.

49

CORPORATE GOVERNANCE REPORT

Remuneration report

2.3.1.2 2022 Remuneration paid to the Chairman of the Board and to the Chief Executive Officer

OVERVIEW

The total remuneration and benefits in kind paid and owed by the Quadient S.A. and the companies it controls to Didier Lamouche during the financial year 2022, which ended on 31 January 2023, is allocated as follows:

Overview of the components of Didier Lamouche's remuneration in his capacity as Chairman	Paid or due as of
(ln thousands of euros)	31 January 2023
Fixed remuneration	120.0
Annual variable remuneration	-
Multiannual variable remuneration	-
Remuneration as director	30.0
Benefits in kind (company car, unemployment insurance for business directors)	-
Exceptional remuneration	-
Remuneration linked to the assumption or termination of duties	-
Valuation of performance shares granted during the financial year	-

The total remuneration and benefits in kind paid and owed by Quadient S.A. and the companies that it controls to Geoffrey Godet during the fiscal year 2022, which ended on 31 January 2023, is allocated as follows:

Overview of the components of Geoffrey Godet's remuneration in his capacity as Chief Executive Officer	Paid or due as
(ln thousands of euros)	of 31 January 2023
Annual fixed remuneration(a)	paid: 649.3
due: 650.0
	paid: 708.8
Annual variable remuneration	due:  318.8
Multiannual variable remuneration	-
Compensation of directors	30.0
Benefits in kind (company car, unemployment insurance for business directors, supplementary	paid: 195.6
retirement plan paid in cash)	due:  110.6
Compensation linked to the assumption or termination of duties	-
Valuation of performance shares awarded during the financial year	531.0

1. The fixed remuneration is divided in two parts: 487,500 euros paid in France and 193,375 United States dollars paid in the United States. The EUR/USD exchange rate used is the budget rate, i.e. 1. 19 for the financial year 2022.

50

CORPORATE GOVERNANCE REPORT

Remuneration report

• CHIEF EXECUTIVE OFFICER FISCAL YEAR 2022 ACTUAL TOTAL COMPENSATION(A)
  Return on capital employed

			14%
Relative total shareholder
return vs. CAC Small + Mid			Performance
60 between N and N+3	14%		Shares	Fixed
			35%
			Compensation
				44%
ESG Objectives tied	7%		Variable
		Compensation
to greenhouse gas
emissions for Quadient		4%	21%
Diversity presence in management			4%
layers improvement			5%	8%
MRS & PLS		25 %
Customer Satisfaction
Intelligent Communication	Organic growth
	Automation

0% Free Cash Flow 0% Current

Operating Profit

1. Excluding supplemental pension scheme and benefits in kind that amounted to 110,612 euros for the fiscal year 2022

Pursuant to article L.22-10-8 of the French commercial code, it is hereby specified that the payment of variable components to Geoffrey Godet for the financial year 2022 shall be subject to approval of the General Meeting called to vote on the financial statements for the financial year which ended on 31 January 2023.

THE CHIEF EXECUTIVE OFFICER'S 2022 ANNUAL VARIABLE REMUNERATION

The Chief Executive Officer's annual variable remuneration for 2022 is dependent on the Group's results as well as his individual performance. CEO's objective weighting is based on quantitative financial criteria for 70% of the target bonus, supplemented by qualitative individual performance objectives for the remaining 30%.

As illustrated below, the Chief Executive Officer's bonus achievement for the fiscal year 2022 stands at 49.1% and

(In thousands of euros)

Weight

Criteria

his annual variable remuneration for 2022 amounts to

239,122 euros paid in France and 94,852 United States dollars, subject to approval of the General Meeting to be held on 16 June 2023.

Targets have been restated from the ones set up at the start of the year to account for inorganic and un-budgeted divestments of the Shipping and Graphics activities, the change in IFRIC accounting and the cease of activities with Russian businesses.

Threshold	Target	Maximum
(0.0%)	(100%)	(150%)

30%	Revenue	991.0	1,032.3	1,053.9
30%	Current Operating Profit(a)	137.8	146.6	152.5
10%	Free Cash Flow(b)	78.1	86.8	104.2

1. Before acquisition related expenses, excluding innovation expense and assuming a constant scope.
2. Cash flow after capital expenditure.

51

CORPORATE GOVERNANCE REPORT

Remuneration report

The achievements for the fiscal year 2022 of the quantitative criteria of the Chief Executive Officer's bonus, at the

2021 exchange rate, are the following:

(In thousands of euros) Weight	Criteria	Performance	Bonus Achievement
30%	Revenue	1,017.3	63.5%
30%	Current Operating Profit(a)	133.7	0%
10%	Free Cash Flow(b)	70.3	0%
TOTAL			19.1 %

1. Before acquisition related expenses, excluding innovation expenses and assuming a constant scope.
2. Cash flow after capital expenditure.

In addition, the Appointments and remuneration committee estimated that the individual (qualitative) performance objectives' achievement rate was 100% compared to a maximum 150%.

For the 2022 financial year, the performance relating to the qualitative objectives assigned to Geoffrey Godet were as follows:

• 10% tied to Intelligent Communication Automation (ICA): create and develop a mature ICA organization which encompasses R&D organization transformation into a global integrated team with operational synergies and a standard set of key performance indicators (KPIs), a solution portfolio vision and successful acquisitions integration.
• During 2022, ICA went through a major reorganization, integrating fully the R&D team, together with the product management team within the solution. YayPay and Beanworks teams were also included to his transformation in order to create a unique ICA global platform bringing together all of Quadient's software offerings. Synergies have emerged thanks to the streamlining of R&D, with a global platform architecture, a single roadmap defined with shared components, documentation etc. ICA has been showing strong progresses following this reorganization with a consolidated product launch

roadmap with key milestones met according to schedule. Consequently, the Appointments and remuneration committee recommended that the performance was deemed achieved at 102.0%.

• 10% tied to Mail-Related Solutions and Parcel Locker Solutions: maintain MRS customer satisfaction at 97%. The threshold is set at 95% and the maximum would be triggered at 98%. Maintain PLS customer satisfaction at 77%. The threshold is set at 75% and the maximum would be triggered at 80%.
  MRS customer satisfaction has reached 97% and PLS customer satisfaction has reached 78%. The performance is achieved at 100.6%.
• 10% tied to an improvement in diversity presence for management layers: the ratio of women in the senior
  leader and executive committee population should be increased to 24%. The threshold is set at 23% and the maximum would be triggered at 26%. The calculation will be triggered only if there is a minimum of 28% of women among directors and middle management layers by the end of fiscal year 2022.
  The ratio of women amongst directors and middle management by the end of fiscal year 2022 is 28.3%. The ratio of women in the Senior Leaders and the
  Executive Committee by the end of fiscal year 2022 is 23.4%. The performance is achieved at 97.3%.

THE CHIEF EXECUTIVE OFFICER'S 2022 SUPPLEMENTAL PENSION SCHEME

In addition to the defined-contribution supplemental pension scheme (article 83 of the French general tax code) the Board of directors, on the recommendation of the Appointments and remuneration committee and in accordance with the resolutions of the General Meeting of 16 June 2022, approved the principle of granting the Chief Executive Officer a supplemental pension scheme. This scheme is based on payments made in cash that will represent 15% of his theoretical annual fixed and variable remuneration assuming objectives are met at 100%, such payments will be degressive in proportion to the achievement of such performance objectives. The percentage of achievement relating to the annual variable compensation of the Chief Executive Officer therefore applies to these payments, but would be capped at 100% of the objectives achieved.

On the recommendation of the Appointments and remuneration committee, the Board of directors, which determined the variable remuneration of the Chief Executive Officer based on performance for 2022, approved the payment of 71,737 euros to be paid in France and 28,456 United States dollars to be paid in the United States, in respect of this supplemental pension scheme, for the financial year 2022. Pursuant to article L.225-37-2, it is hereby specified that this payment shall be subject to the approval of the General Meeting called to vote on the financial statements for the financial year which ended on 31 January 2023.

52

CORPORATE GOVERNANCE REPORT

Remuneration report

• TABLE # 1 AFEP-MEDEF CODE: TABLE SUMMARISING THE COMPENSATION, OPTIONS AND SHARES AWARDED TO EACH EXECUTIVE OFFICER

(In thousands of euros)	31 January 2023	31 January 2022
Didier Lamouche
Remuneration due for the fiscal year	150.0	150.0
Valuation of multiannual variable remuneration awarded during the fiscal year	-	-
Valuation of options awarded during the fiscal year	-	-
Valuation of long term incentive plans awarded during the fiscal year	-	-
TOTAL	150.0	150.0
(In thousands of euros)	31 January 2023	31 January 2022
Geoffrey Godet - Chief Executive Officer
Remuneration due for the fiscal year	1,109.4	1,523.6
Valuation of multiannual variable remuneration awarded during the fiscal year	-	-
Valuation of options awarded during the fiscal year	-	-
Valuation of long term incentive plans awarded during the fiscal year	531.0	492.2
TOTAL(A)	1,640.4	2,015.8

1. The 2022 fixed remuneration is divided in two parts: 487,500 euros paid in France and 193,375 United States dollars paid in the United States. The exchange rate EUR/USD used is the budget rate, 1. 19 for financial year 2022 and 1.24 for financial year 2021.

• TABLE # 2 AFEP-MEDEF CODE: TABLE SUMMARISING THE COMPENSATION OF EACH EXECUTIVE OFFICER

	31 January 2023		31 January 2022
(In thousands of euros)	Amounts due	Amounts paid	Amounts due	Amounts paid
Didier Lamouche - Chairman
Annual fixed remuneration	120.0	120.0	120.0	120.0
Annual variable remuneration	-	-	-	-
Multiannual variable remuneration	-	-	-	-
Remuneration as director	30.0	30.0	30.0	30.0
Benefits in kind	-	-	-	-
TOTAL	150.0	150.0	150.0	150.0
Geoffrey Godet - Chief Executive Officer
Annual fixed remuneration(a)	650.0	649.3	596.3	590.9
Annual variable remuneration(b)	318.8	708.8	701.8	-
Multiannual variable remuneration	-	-	-	-
Remuneration as director	30.0	30.0	30.0	30.0
Benefits in kind	110.6	195.6	195.5	16.6
Exceptional remuneration(c)	-	-	-	240.1
TOTAL	1,109.4	1,583.7	1,523.6	877.6

The exchange rate used is the budget rate, 1. 19 for financial year 2022 and 1.24 for financial year 2021.

1. The 2022 fixed remuneration is divided in two parts: 487,500 euros paid in France and 193,375 US dollars paid in the United States.
2. The 2022 variable remuneration is divided in two parts: 239,122 euros paid in France and 94,852 US dollars paid in the United States.
3. The exceptional remuneration is divided in two parts: 204,000 euros paid in France and 44,800 US dollars paid in the United States.

53