www.se.com Schneider Electric Universal Registration Document 2021 458 Chapter 8 – Annual Shareholders’ Meeting • 25%, based on Schneider Sustainability External & Relative Index (SSERI): The Schneider Sustainability External and Relative Index measures the long-term sustainability performance of the Group in terms of relative performance, through a combination of external indices which cover a range of environmental, social, and governance indicators wider than and different from the Schneider Sustainability Impact (SSI). Using external indices would also ensure that the sustainability priorities governing the assessment of the long-term sustainability performance of the Group are at all times those which matter the most to the stakeholders. As their content is dynamic and includes new and more relevant topics as they emerge, it forces participants to constantly anticipate the most demanding trends in global sustainability. The Board has selected some of the most challenging external indices which are objective, recognized, and independent, covering main geographies in line with the Group’s global footprint and which complement each other as they cover different sustainability dimensions: − DJSI World which covers three dimensions: economic, environmental, and social; − Euronext Vigeo which covers environment, community involvement, business behavior, human rights, corporate governance, and human resources; − Ecovadis which covers four dimensions: environment, labor and human rights, sustainable procurement, and ethics; and − CDP Climate Change which covers climate change, water, and forests and represents a major reference for climate change leadership globally. The table below summarizes the Performance Conditions that would apply to the plan: 40% Improvement of adjusted Earnings Per Share (EPS) • 0% at the minimum Adjusted EPS improvement threshold • 75% at the intermediary Adjusted EPS improvement objective • 100% at the targeted Adjusted EPS improvement objective Vesting linear between these points 35% Relative TSR 17. 5% vs. CAC 40 • 0% below median • 50% at median (rank 20) • 100% at rank 10 • 120% at ranks 4 to 1 Vesting linear between these points 17. 5% vs. a panel of 11 companies (ABB, Legrand, Siemens, Eaton, Emerson, Honeywell, Johnson Controls, Rockwell Automation, Fuji Electric, Mitsubishi Electric and Yokogawa) • 0% at rank 7 and below • 50% at median (rank 6) • 100% at rank 4 • 150% at ranks 3 to 1 Vesting linear between these points 25% Schneider Sustainability External & Relative Index (SSERI) 6.25% DJSIW • 0%: not in World • 50%: included in World • 100%: sector leader 6.25% Euronext Vigeo • 0%: out • 50%: included in World 120 or Europe 120 • 100%: included in World 120 & Europe 120 6.25% Ecovadis • 0%: Silver Medal or less • 50%: Gold Medal (top 5%) • 100%: Platinum Medal (top 1%) 6.25% CDP Climate Change • 0%: C score • 50%: B score (25% at B-) • 100%: A score (75% at A-) For each grant, the performance conditions will be determined by the Board. and, although the Board favors stability, they could be adapted from the ones presented above. Depending on the evolution of the Group’s strategic objectives, should they cease to be relevant or new criteria be deemed more appropriate based on their review by the Board of Directors, the latter would elect for criteria with similar long-term stringency, that will ensure a strong link between pay and performance. Best practices The Board of Directors shall inform Shareholders every year of the number of shares granted or/and vested pursuant to the Long-Term Incentive Plan. The grant of Performance Shares would also be consistent with the principles and best practices applied by the Board, including, in particular: • involvement at each stage (allocation, review of the satisfaction of performance conditions, etc. ) of the Human Resources & CSR Committee; • demanding performance conditions in line with the Company’s financial communication which provide incentive, for 100% of the shares granted to the Corporate Officer and members of the Executive Committee; and • demanding rules of business ethics, including, a prohibition for beneficiaries who are members of the Executive Committee to use hedging instruments for the Performance Shares. All these elements, taken together, demonstrate that the Group is aligned itself with best market practices regarding Performance Shares and responds to the expectations of its shareholders. 8.1 Explanatory comments & draft resolutions submitted to the Annual Shareholders’ Meeting