Implementation Decree for the Say-on-Pay Provisions of the <I>Loi Sapin II</i> Adopted

Implementation Decree for the Say-on-Pay Provisions of the Loi Sapin II Adopted

Adopted on 8 November 2016, the Sapin II Act (Loi Sapin II) introduced a compulsory ex ante vote on remuneration policy and an ex post vote on the amount of remuneration received in accordance with the policy passed the previous year.

On 20 March 2017, the Prime Minister adopted the implementation decree (décret d'application). The decree specifies the types of remuneration concerned by the ex ante vote. As expected, the term is defined broadly and encompasses fixed remuneration, variable remuneration and exceptional remuneration. This year, companies must submit to shareholders a remuneration policy and report for approval (an ex ante vote), as provided by the Loi Sapin II. If they follow the AFEP-MEDEF corporate governance code ("2016 AFEP-MEDEF Code"), they must submit a nonbinding mandatory request for approval on the amount of remuneration paid to each specified executive for the previous year's service (an ex post vote). The ex post vote of Loi Sapin II will not become applicable until 2018, with respect to remuneration paid in 2017.

In recent annual meetings, shareholders have begun to vote down executive packages (e.g., Elior's annual general meeting held on 10 March 2017). However, as indicated above, these votes will remain nonbinding as permitted by the 2016 AFEP-MEDEF Code, given that this part of the Loi Sapin II is not yet applicable.

Jones Day publications should not be construed as legal advice on any specific facts or circumstances. The contents are intended for general information purposes only and may not be quoted or referred to in any other publication or proceeding without the prior written consent of the Firm, to be given or withheld at our discretion. To request reprint permission for any of our publications, please use our "Contact Us" form, which can be found on our website at The mailing of this publication is not intended to create, and receipt of it does not constitute, an attorney-client relationship. The views set forth herein are the personal views of the authors and do not necessarily reflect those of the Firm.