Neuberger Berman has expressed their intention to vote FOR this proposal at Air Liquide S.A's upcoming 2023 AGM.

Neuberger Berman expects compensation committees to design, adopt and clearly articulate a strong link between executive compensation and performance. Where companies employ sustainability metrics in their executive compensation packages, we believe metrics should be clearly defined and materially relevant to the companies’ operations and sustainability strategy.
In this case, the company has incorporated ESG metrics tied to its sustainable strategic objectives to the annual and long-term remuneration plans. Under the short-term plan, a portion of the criteria is linked to the rollout of the company’s sustainable development strategy, under which the company is committed to achieving:
- 30% reduction in carbon intensity in kg CoCO2/EBITDA from 2015 levels
- 33% reduction in Scope 1 and 2 emissions by 2035 which were validated by SBTi
- Carbon neutrality target by 2050

In the long-term plan, 10% of the CEO’s long-term incentive package is linked to Air Liquide’s climate goals measured over a three-year performance period. We view this positively as we expect companies to apply nuanced judgment in determining the appropriate time horizon for measuring ESG priorities when including them in short-term and long-term incentive plans. As such, we expect longer-term goals, like those pertaining to climate change, to be included in the long-term plan with interim targets in the annual incentive plan if deemed appropriate by the board.

Further, we are pleased by the company’s capital allocation decisions pertaining to ADVANCE, the company’s strategic plan for 2025, which places sustainable development at the core of its strategy. The company has committed to dedicating half of its industrial investments, approximately €8 billion, between 2020 and 2025 to the energy transition, which we believe will help the company to capture significant incremental growth via its leading innovating technologies. By 2035, the company also aims to invest an additional €8 billion to further support low-carbon and renewable hydrogen markets. In addition, the company has capably navigated the pandemic and post-pandemic recovery, achieving strong, above-market organic growth (e.g., energy pass-through costs) in alignment with the financial targets within its remuneration policy.

For these reasons, we intend to vote for the CEO remuneration policy to signal support for the alignment of capital allocation decisions and incentives with the company’s strategy and long-term climate goals.