www.se.com Schneider Electric Universal Registration Document 2021 330 Chapter 4 – Corporate Governance Report • Adjusted EPS (40%) Adjusted EPS is a key long-term performance metric which promotes the execution of Schneider Electric’s strategy to deliver profitable growth, thus reinforcing alignment with shareholders. Performance Shares could vest subject to the achievement of the following targets as set by the Board of Directors at the beginning of each year: • a minimum Adjusted EPS improvement threshold under which there will be no vesting; • an intermediary targeted Adjusted EPS improvement objective that the Company will have to achieve in order to vest 75% of the shares under this condition; • a targeted Adjusted EPS improvement objective that the Company will have to achieve in order to vest all shares under this condition; • the Performance Shares will vest progressively, on a linear basis, if the Adjusted EPS improvement is between these objectives. As explained above, the Board commits to disclose ex-post, at the end of each Long-Term Incentive Plan, the minimum Adjusted EPS improvement thresholds and the targeted Adjusted EPS improvement objectives. Adjusted EPS performance is published in the external financial communications and its annual variance will be calculated using adjusted EBITA at constant FX from year N-1 to year N. Foreign exchange impacts below adjusted EBITA will be taken in full. Significant unforeseen scope impact could be restated from this calculation upon decision of the Board. • Relative TSR (35%) This criterion strengthens the alignment between the shareholders’ interests and compensation of the Corporate Officer. • For 17.5% of the shares, Schneider Electric TSR will be compared to a bespoke industry panel consisting of 11 companies (ABB, Legrand, Siemens, Eaton, Emerson, Honeywell, Johnson Controls, Rockwell Automation, Fuji Electric, Mitsubishi Electric and Yokogawa) with a vesting scale as follows: 0% at rank 7 or below, 50% at median (rank 6), 100% at rank 4, 150% for ranks 3 to 1, and linear between these points, as explained above, the Board proposes to strengthen the vesting scale for a better alignment with performance. • For the remaining 17.5%, Schneider Electric TSR will be compared with the TSR of the companies in CAC 40 index to reflect the macro-economic and stock-market specific trends which influence the performance of the share and in turn, the return to shareholders with a vesting scale as follows: 0% below median, 50% at median (rank 20), 100% at rank 10, 120% in ranks 1 to 4, and linear between these points. In case of over-performance, if Schneider Electric’s TSR ranks first to third of the bespoke industry panel or within top 9 of the CAC 40 companies, this criterion may compensate the under-performance under the Adjusted EPS criterion up to the same number of shares. If the Schneider Electric TSR is closely clustered with that of other companies in the panel, then the Board of Directors will apply its judgment to decide whether Schneider Electric’s TSR shall be deemed to be ranked in the same position as those companies. • Schneider Sustainability External and Relative Index (SSERI) (25%) 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. 4.2 Compensation Report