CORPORATE GOVERNANCE REPORT 5Compensation and benefits of executive corporate officers The number of performance shares that may be definitively vested to the beneficiaries concerned is calculated using the following performance grid: Nature of performance Assessment of the requirements for the chosen conditions Performance % of shares delivered(a) performance conditions Condition linked to Klépierre’s ≤16.5% 0% The percentage of shares allocated is zero when the absolute performance (10%) 20% 33.3% increase in the TSR is less than or equal to 16.5%. 22.5% 50% Achievement of the maximum target implies TSR 25% 66.7% growth of 30% or more. 27.5% 83.3% Exceeding 30% threshold does not result in an over-allotment of shares, as the allotment is capped ≥30% 100% at 10% of the number of shares initially allocated. Condition linked to the Index -1% 0% Even if the Klépierre share’s performance is equal Klépierre share’s relative Index 33.3% to the index, only 33.33% of the shares will be obtained. performance (30%) Index +1% 50% To achieve the maximum target, the share must perform Index +2% 66.7% at a rate 3% above the index. Index +3% 100% Exceeding the index threshold by +3% does not result in an over-allotment of shares, as the allotment is capped at 50% of the number of shares initially allocated. Condition linked to Klépierre’s <1% 0% Even if the growth of the net rental income is equal to 1%, internal performance (40%) 1% 30% only 30% of the shares will be obtained. ≥3% 100% To achieve the maximum target, the increase must be above or equal to 3%. Exceeding the threshold by 3% does not result in an over-allotment of shares, as the allotment is capped at 40% of the number of shares initially allocated. Conditions linked to Klépierre’s GRESB rating: Klépierre must be 8% GRESB (Global Real Estate Sustainable Benchmark) is an CSR performance (20%) among the top five and be rated organization that evaluates the social and environmental “5 stars” performance of real estate companies. The goal is to Reducing the Group’s energy 3% rank among the top five companies in its category and consumption to obtain a “5-star” rating. Goal(c) 30% reduction CSR targets are described in more detail in the CSR Shopping centers with a 3% strategy as described on page 175, which sets targets for sustainable development each of the adopted themes, a goal to be achieved within certification a five-year horizon. Goal(c) 80% of shopping centers The targets of the plan in question take into account Shopping centers contributing 3% the progression expected within three years which to local employment is part of the overall goal of the five-year CSR strategy Goal(c) 70% of shopping (see below). centers having taken at least The shares are vested only if the conditions are fulfilled. one measure during the year There is no award if earnings fall below the target. intended to promote local employment(b) Employees receiving training 3% Goal(c) 94% of employees (a) If the result obtained is between two thresholds, the number of performance shares vested is calculated by linear interpolation. (b) Including: the organization of an employment forum, partnerships with a local employment organization, partnership with an association supporting employment/integration, publication of jobs available at the center on the center’s website and/or through posting, etc. (c) The target goals will be adjusted in future performance action plans based on the goals set in the CSR strategy. Adjustment to the performance conditions applicable Based on the work of the Nomination and Compensation Committee, to performance share plans being established from 2018 the Supervisory Board felt it was necessary to make evolve the performance conditions for reasons that are set out in more detail In June 2017, Klépierre undertook a review for the purpose of revisiting below. the structure of long-term incentives and overhauling performance conditions, with the assistance of specialist consulting firms. Indeed, In this respect, the Supervisory Board endeavored to identify the Board wished to introduce innovative criteria linked to Klépierre’s performance conditions that reflect the Group’s policy in terms of CSR performance, considered by the Board as particularly important long-term compensation, namely: in the context of the Group’s long term strategy, in order to motivate > conditions primarily based on internal performance indicators, and ensure the involvement of the Group’s management in the improvements in which depend on the work put in by the implementation of this strategy. management teams and their results, built around an approach Furthermore, these criteria aim at the implementation of measures designed to create value over the long term; affecting different professions in the Group which contribute to the performance and, therefore, involve all teams. In addition, in the context of its thoughts on the introduction of new criteria, the Board concluded that previous plans were no longer satisfactory in terms of long-term compensation goals. It in particular became apparent that the performance criteria of the previous plans did not reflect the actual economic and operational performance of the Group (notably, significant growth of the net current cash flow per share, higher than the initial objectives) and did not serve to motivate, retain and attract talent within the Group, even though the Group’s operational performance had improved significantly over the same period. 248 KLÉPIERRE 2017 REGISTRATION DOCUMENT