327 Life Is On | Schneider Electric www.se.com Chapter 4 – Corporate Governance Report Corporate Governance 4. Group’s strategic priorities How the strategy links to the Chairman and CEO’s variable compensation Long-term incentive plan Annual variable compensation Delivering strong execution and creating value for customers and shareholders every year to contribute to Schneider Electric’s long-term success Building an integrated and leading company with strong sustainability focus and attractive returns to shareholders Group organic sales growth 40% Group adjusted EBITA margin improvement (organic) 30% Group cash conversion rate 10% Schneider Sustainability Impact 20% Adjusted Earnings Per Share 40% Relative Total Shareholder Return 35% Schneider Sustainability Relative & External Index 25% Organic growth Value for customers Sustainability Continuous efficiency Value & returns to shareholders How are performance criteria linked to Schneider Electric strategic priorities? Variable pay is linked to performance metrics designed to deliver Schneider Electric strategy. At the start of each year, the Board reviews the measures, targets, and weightings to ensure they remain consistent with the annual priorities and Group strategy. For the annual variable compensation and the Performance Shares, the approach to performance measurement is intended to provide a balance of measures to assess performance focusing on execution of the Group’s strategic priorities. Considerations of wider workforce compensation and shareholders’ views The Board monitors and reviews the effectiveness of the compensation policy for Corporate Officer and senior management and has regard to its impact and consistency with compensation policies in the wider workforce. During the year, the Board is provided with information and context on pay in the wider workforce and various HR initiatives to enable its decision-making. This includes the approach to gender pay gap and living wage programs rolled out globally, the annual variable compensation results, and the total cost of LTIP awards. The Board is committed to an open and transparent dialogue with Schneider Electric’s shareholders through the Vice-Chairman & Lead Independent Director. Where appropriate, Schneider Electric actively engages with shareholders and shareholder representative bodies, taking their views into account when making any decisions about the Corporate Officers’ compensation. The Vice-Chairman & Lead Independent Director is also available to answer questions at the Annual Shareholders’ Meeting. 2021 Compensation Pillars and Principles Pay for Performance Alignment with shareholders’ interest Competitiveness • Principle 1: Prevalence of variable components: circa 80% for CEO (at target). • Principle 2: Performance is evaluated via economic and measurable criteria. • Principle 3: Financial and Sustainability objectives are fairly balanced and distributed between short-term (annual variable compensation) and medium-term (long-term incentive) components. • Principle 4: Significant proportion of the total compensation delivered in shares. • Principle 5: Performance conditions support Schneider Electric’s strategic priorities and are aligned with shareholders’ expectations. • Principle 6: To benchmark the Corporate Officer’s compensation package “at target” in the median range of the Company’s updated peer group. • Principle 7: To reference the CAC 40 third quartile and the Stoxx Europe 50 median.