This excerpt taken from the VE 20-F filed Apr 16, 2009.
There is no contract between the members of our board of directors and us or our subsidiaries that provides for the payment of benefits or compensation owed or that may be owed in the event such member ceases or changes his employment with us or our subsidiaries, other than the supplementary defined benefits group pension plan described below.
15 Including Jérôme Contamine, who has not been a member of our executive committee since January 19, 2009. Thomas Piquemal was not a member of our executive committee in 2008.
In accordance with the recommendations of the AFEP-MEDEF Code of December 2008, our board of directors at its meeting of March 24, 2009 took note that Mr. Proglios employment agreement, which was suspended on April 30, 2003 when he was appointed chairman and chief executive officer of Veolia Environnement, will be terminated in the event that his term of office as a director is renewed. Under French law, the chairman of the board of directors, the chief executive officer or the members of the board of directors have a special legal status known as mandataire social and as such are not employees of the company, even though they occupy management or direction functions, such as that of chairman and chief executive officer.
The chairman and chief executive officer does not benefit from a golden parachute or similar arrangement, and there is no provision calling for the payment of compensation to the chairman and chief executive officer in consideration for non-competition clause.
Furthermore, neither we nor our subsidiaries books or recognizes any amount for the payment of pensions, retirement benefits or other benefits to the members of our board of directors, other than the chairman and chief executive officer as described below.
Supplementary Defined Premium Retirement Plan
The chairman and chief executive officer is a beneficiary of the supplementary defined premium group pension plan that covers all of our Group’s executive officers. In 2008, we paid a premium of €5,990 (included in employer’s social contributions) under this supplementary defined premium group pension plan on behalf of the chairman and chief executive officer.
Supplementary Defined Benefits Retirement Plan
In addition, our board of directors established the supplementary defined benefits retirement plan, starting from the 2006 fiscal year, for the chairman and chief executive officer and other members of the executive committee, in line with the practices of other companies listed in the CAC 40. The supplementary retirement plan, whose financing is outsourced to an insurance company, has the following characteristics:
a specific regime that takes into account the cancellation of the retirement plan from which Group executives benefited until December 31, 2002 following the separation of the Vivendi and Veolia Environnement groups and the seniority acquired as employees of the former principal shareholder of the Company, Compagnie Générale des Eaux (later named Vivendi Universal, and then Vivendi);
a retirement benefit that is in addition to other retirement benefits, acquired as a function of seniority (minimum of five years seniority and two years seniority as a member of the executive committee), which is capped at 25% of covered compensation (for 25 years of seniority);
a limit on total retirement benefits fixed at 50% maximum of covered compensation based on the average of the three most recent compensations received.
As of December 31, 2008, and based on current estimates, the total cost of this retirement plan (current value of future benefits or Valeur Actuelle des Prestations Futures) is expected to amount to €30.2 million for the members of the executive committee, of which €13.1 million relate to the chairman and chief executive officer. This is subject to the beneficiaries’ continued service with our company until the time that they retire, in accordance with the provisions of the French Fillon law.
In accordance with the recommendations of the AFEP-MEDEF Code, this benefit is taken into account when setting the chairman and chief executive officers total compensation. Furthermore, the group of potential beneficiaries is not limited only to the chairman and chief executive officer, but also includes members of our executive committee. Each year, the increase in potential rights is equal to only a limited percentage of the beneficiaries compensation, and the reference period used to calculate benefits is several years long and excludes compensation paid at the time of employment termination or retirement, as well as any other type of extraordinary compensation. Henri Proglio has 36 years of seniority with us.