Report
Expert Corporate Governance Service (ECGS)
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Alstom, 10 July 2019

ITEM 7: The Company proposes to implement a non-compete clause of 2 years compensated by 18 months of annual remuneration. The company decreased the amount to be granted compared to the non-compete clause that was put to vote in the frame of the Siemens operation, which we appreciate. However, the amount proposed still exceeds our 12-month ceiling. Thus we cannot support it.

ITEM 9: The 2018/19 Chairman and CEO remuneration could have been acceptable if the company had heard shareholders’ concerns regarding the LTI performance conditions. Indeed, one of the criteria (the TSR) still allows for vesting in case of performance below the index. This is not acceptable for such a large company.

ITEM 10: Among changes proposed for the 2019/20 Chairman and CEO remuneration policy is the increase of the fixed remuneration up to €850,000. This amount is below medians, which we appreciate. However, the 13%-increase represents an annual increase of 4.3%, which is above inflation, which does not respect our Guidelines. Moreover, since March 2016, average employee remuneration increased by 1.2%. Thus, the 13%-increase represents 10.8 times increase of average employee remuneration, which does not meet our guidelines and strongly impairs social cohesion. Thus, we do not support this new remuneration policy.

Underlying
Alstom S.A.

Alstom serves the power generation and transmission markets, and rail transport market. Co.'s activities are divided into four sectors: the Thermal Power Sector (Co. offers power generation solutions using gas or coal to services including plant modernization, maintenance and operational support); the Renewable Power sector offers EPC solutions, turbines and generators, control equipment and maintenance for Hydropower and Wind power activities; the Grid Sector designs and manufactures equipment and turnkey solutions to manage power grids and transmit electricity from the power plant to the large end-user; and the Transport Sector provides rail transport products, systems and services.

Provider
Proxinvest
Proxinvest

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Analysts
Expert Corporate Governance Service (ECGS)

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