www.se.com Schneider Electric Universal Registration Document 2021 326 Chapter 4 – Corporate Governance Report Use of discretion In determining executive compensation, the use of discretion is limited, and an appropriate disclosure on the use of discretion would be provided, if any, so that shareholders understand the basis for the Board’s decisions. This discretion is available to the Board to ensure successful execution of the policy and to reflect the fact that there are no qualitative objectives in Corporate Officer’s compensation: • Flexibility to take into account unexpected changes in the industry environment and in compensation practice generally, this allows to respond to changes in circumstances, for example in modifying the benchmarking peer groups. • Exercise discretion, upwards or downwards, to adjust the formulaic outcome for annual or long-term incentive awards resulting from the strict application of the approved policy, where a qualitative assessment of performance is required to ensure that the awarded compensation is fair in light of the Corporate Officer’s actual contribution to the Company’s overall performance, its positioning vs. competition, and the outcomes for shareholders and employees. Changes in the 2022 Compensation policy The Committee has reviewed the existing policy and reassessed the pillars and principles formulated in 2018, the compensation elements and criteria considering the feedback of shareholders received during the shareholder engagement process described above. Upon recommendations of the Governance & Remunerations Committee, the Board wishes to overall maintain the stability of the compensation policy which appears balanced and provides market competitive pay, ensuring a strong link between pay and performance, strong alignment with both employees and shareholders, and long-term focus, while at the same time taking into account the shareholders’ feedbacks. Therefore, based on the Committee’s analyses and recommendations, the Board proposes to implement the following changes for the 2022 Compensation policy: • Stringency of the TSR criterion for the LTIP: The vesting scale of the criterion of TSR compared to a bespoke industry panel consisting of 11 companies would be made more stringent, with no vesting at ranks 7 and below in the bespoke peer group, no vesting below the median of the group would therefore be allowed; • Disclosure of the targets set for the improvement of the adjusted Earnings per share criterion: the Board would also commit to disclose ex-post the targets of improvement of the adjusted Earnings per share set by the Board which will allow shareholders assess their stringency and the link between pay and performance; • Cap of the LTIP granted to the Corporate Officer: The cap of long-term instruments that could be granted to the Corporate Officer was previously expressed in number of shares, capped at 60,000 shares. The Board proposes that the cap be now expressed as a percentage of his remuneration (fixed and variable short-term compensation at target). Notably, the long-term instruments granted to the Corporate Officer, valued in accordance with IFRS standards, should not represent a disproportionate percentage of his overall compensation, and should be no more than 200% of the combined fixed and short-term variable compensation at target. 23% Target annual variable compensation 130% of fixed (2) 18% Fixed compensation 59% LTI P (1) 18% Not linked to performance 41% Paid in cash 59% Paid in shares 41% Short-term 59% Long-term (minimum 3 years + presence condition) 82% Linked to performance (1) LTIP granted during 2021 fiscal year valued in accordance with IFRS standards (2) Between 0% and 260% Balance between compensation elements 4.2 Compensation Report