Value-based governance Setting incentives to create value Our compensation policies are an essential component of our employee value proposition and a key driver of both individual and business performance. The programmes reflect the performance of the business and of individuals and are aligned with our ambition of ensuring that Givaudan is a place where everyone feels welcome, valued and inspired. We have rigorous governance, policies and processes to ensure that our compensation practices are aligned with our principles of integrity, fairness and transparency. The ability to attract, motivate and retain the right talented employees globally is key to the continued success of Givaudan. Our competitive remuneration policy supports this ambition and is based on the following principles: – Pa y for performance – Al ignment of interests – Ex ternal competitiveness – Inte rnal consistency and fairness. Total compensation in 2021 is composed of the following elements: – Ba se salary for all employees – Be nefits for all employees (including retirement, insurance and health care plans) – Ca sh-based Profit Sharing Plan for approximately 12,000 non-management employees based on Group financial objectives – Ca sh-based Annual Incentive Plan for around 5,000 managers and executives – Eq uity-based Performance Share Plan (PSP) for the top 500 employees. Base salaries are regularly benchmarked in each location and pay scales are reviewed annually according to local market evolution. As a general rule, pay scales are built around market median. Benefit plans seek to address current and future security needs of employees. These generally include retirement, health, death and disability benefits. In 2021, to provide further support to all our employees as the pandemic continued, we extended our employee benefit offering from a local to a comprehensive global Employee Assistance Programme offering a 24/7 helpline in over 200 languages on a variety of topics such as personal wellbeing, mental health, relationships, family matters and workplace challenges. Non-management employees participate in the global Profit Sharing Plan. Payouts are based on the yearly evolution of Group EBITDA. The Annual Incentive Plan covers all managers and executives globally. It rewards participants for the achievement of financial targets and other organisational and individual objectives. The PSP is designed to reward executives and key talent who significantly influence the long-term success of the business and our purpose ambitions. From 1 January 2021, a new PSP aligned with the Givaudan purpose was introduced. The financial metrics of sales and free cash flow traditionally used to calculate the PSP are retained, and are complemented by non- financial criteria linked to three of the four focus areas of the Givaudan purpose: – Cr eations : Financial targets of sales and free cash flow – Nat ure : Environmental targets of net GHG emissions reduction (scope 1, 2 and 3) – Pe ople : Social targets of senior leader diversity (women and high growth market representation) and employee safety. READ MORE The full Compensation Report can be found in our 2021 Governance, Compensation and Financial Report ▸ pages 22–39 80 % Financial targets 10 % Social targets 10 % Environmental targets 20 % Non financial targets Performance Share Plan for top 500 employees Givaudan – 2021 Integrated Annual Report Value-based governance Se tting incentives to create value 129