Rewarding performance and sharing the results / Core priorities of HR policy / Our human and social responsibility / Home page / RSE Société Générale - Sustainable development at Societe Generale, Corporate an social responsibility (CSR) at SG

Rewarding performance and sharing the results

Objective:

attract and retain staff.

Priorities in 2009:

continue to offer attractive pay packages with respect to the market,
continue to extend the Global Employee Share Ownership Plan throughout the Group.

Highlights in 2008:

within Société Générale France, the average gross annual remuneration¹ amounted to € 47,232 in 2008 (+2.2% on 2007).

Remuneration

Société Générale Groups Human resources policy is outlined in full in Chapter 6 of the 2009 registration document, which can be consulted on the Group’s website at www.socgen.com
In order to keep pace with its expansion, particularly overseas, the Group makes every effort to attract and retain high quality staff, notably by offering employee benefits and competitive pay packages that reward both individual and collective performance.
Based on standard Group-wide principles, they are also adapted to particular market contexts. Employees are also given the opportunity to become shareholders.
In order to ensure that their pay packages remain competitive, the Group’s entities refer to different surveys of remuneration levels by activity and market.

Average gross annual remuneration is not calculated for the Group as a whole, as this is not meaningful given the broad diversity of activities and geographic locations.
All Société Générale Group entities comply with their obligations in terms of social security charges and tax levied on employee salaries and benefits.

Remunerating financial market professionals

In light of the current financial crisis, supervisory bodies and regulators alike have issued recommendations and guidelines governing the remuneration of financial market professionals² in order to bring their actions more in line with their company’s long-term goals.

Société Générale has actively contributed to talks and round tables on the subject:

at an international level, by taking part in the surveys and interviews conducted by the International Institute of Finance (IIF), the Financial Stability Forum (FSF) and the Financial Services Authority (FSA);
within France, by taking part in the round table discussions instigate by the High Level Committee which regroups various professional associations³ including the AMF, French Banking Commission and the DGTPE in order to define a series of guidelines governing financial market professionals.

Professional guidelines in France stipulate that the variable component of an individual’s remuneration should be determined independently of their basic salary and reward the real gains generated for the company. It must include a short-term component that rewards the actual earnings realised over the financial year which has been closed, and a substantial part which is deferred over time to factor in the medium- and long-term impact of operations undertaken during the year.

Société Générale has already committed to applying these guidelines as of 2009 for its activities in France and will pay close attention to the future recommendations of other international supervisory and regulatory bodies.
The Group, which already enforces some of these recommendations, has revised its policy governing variable remuneration in 2008.
The General Management has decided to reinforce its governance by submitting the proposed changes to the remuneration of its market activities (SGCIB and SGAM) to the Board of Directors which is in the process of validating the Group’s financial statements for 2008, before employees are informed of their variable remuneration.

A significant proportion of the variable remuneration of the Group’s Corporate and Investment banking employees is to be deferred over time. Employees will only be entitled to their variable remuneration after a period of three years, part of which will be subject to them meeting their performance targets. Moreover, beneficiaries will be exposed to the future results of the Group (via their shares or equivalent) and may not hedge this exposure. In this way, all interested parties are motivated to carefully consider the impact of their professional decisions on the future results of the Group.

The variable remuneration for those market activities that underperformed in 2008 has been drastically reduced.
Within the Corporate and Investment Banking arm, variable remuneration in 2008 amounted to two months’ salary on average compared with close to three months in 2007.

NOTES

basic salary + variable component (excluding profit-sharing and top-up payments)
the scope covers all professionals (employees and persons acting on behalf of the companies) operating on the markets or in corporate and investment banking, regardless of the legal status of their company: bank, investment company, management company, all types of companies with similar activities as well as capital investment companies.
AFG (Association Française de la Gestion Financière), AFIC (Association Française des Investisseurs en Capital), AMAFI (Association Française des marchés financiers), FBF (Fédération Bancaire Française), FFSA (Fédération Française des Sociétés d'Assurances)