PARIS – Jean-Paul Agon, L’Oréal’s chairman and chief executive officer is to propose ending the corporation’s current stock-option system and waive half of the shares given to him for 2010, a company spokeswoman confirmed on Sunday.
Today, 2,300 L’Oréal employees benefit from an arrangement whereby the company board grants managers shares at a fixed price that cannot be exercised for a period of five years minimum.
Instead, a new system will be based on performance. Agon is expected to table the proposal at a board meeting in April.
“We have been thinking about this solution since the month of January,” Agon is quoted as saying in an article appearing in France’s weekly Le Journal du Dimanche newspaper. “At the end of four years at the [company], our managers will receive free shares if the firm has reached certain performance criteria. It is more transparent and less uncertain.”
Further, Agon is renouncing half of the 400,000 L’Oréal shares attributed to him for 2010.
According to the most recent annual study by shareholder advisory company Proxinvest, Agon was the top-earning executive in France in 2010, when he made 10.7 million euros, or $14.6 million. Of that, 2.1 million euros, or $2.9 million stemmed from his fixed salary, with the rest coming from a bonus based on performance and from stock options.
Dollar figures are converted at the average exchange rate for 2010.
During the financial crisis, Agon forfeited his L’Oréal stock options for 2009.