Compensation Policy

This policy applies to all executive officers of the Group and is adapted to local regulations under the supervision of the Boards of Directors and compensation committees of the Company's subsidiaries.

The effective application of these principles is regularly reviewed by the Compensation Committee of AXA. The Compensation Committee regularly assesses compliance with these principles.

Fixed and variable components

The fixed component is targeted to fall within the lower quartile of the market.

The variable component is tied to the global performance of AXA, the local performance business unit and the achievement of individual objectives.

The variable component is intended to serve as the major component of the total annual remuneration, such that, if pre-determined targets are reached or surpassed, the executive's total remuneration would be positioned in the upper or top quartile of the market.

Performance shares and performance units

Performance units/shares aim at:

• Rewarding and retaining the best talents by associating them to the intrinsic performance of the AXA Group and of their operational business unit as well as to the performance of the AXA stock price in the medium-term (2 to 4 years);
• Reducing shareholder dilution by granting less stock options.

Grant criteria for performance units are similar to those used for stock options.

The amounts corresponding to performance units are charged to expenses each year under the variable accounting method, but do not create any dilution for shareholders since no new shares are issued.

Performance shares, even if shares ultimately delivered to beneficiaries are newly issued shares (until now, AXA has always delivered existing shares), represent less shareholder dilution than stock options, due to the smaller grant volume.

Stock options

For many years, AXA has promoted a stock options program, for its directors, officers and employees in France and abroad, aimed at rewarding their performance and aligning their interests with those of the Group by linking them to AXA's stock performance over the long term.

Within the global cap authorized by the shareholders, the Supervisory Board approves all stock options programs prior to their implementation.

To date, AXA has opted to grant subscription options, with the exception of options granted until 2005 to certain employees of AXA Financial, which were purchase options on ADRs.

Stock options are valid for 10 years as of the grant date. They are granted at fair market value with no discount and become exercisable upon vesting, generally in third between two and four years from grant date.

Each year, the Management Board proposes a global option pool to the Supervisory Board's approval. The pool of options allocated to beneficiaries of each business unit is essentially determined on the basis of its contribution to Group performance the previous year.

Individual option grants are decided by the Management Board, provided that grants to members of the Management Board shall receive the prior approval of the Supervisory Board (acting on the recommendation of its Compensation Committee).

Individual options grants are determined on the basis of the following criteria:

• criticality of the job
• criticality of the individual in the current job
• criticality of the individual in the future
• quality of the individual contribution to performance.

Other information

In connection with their professional activity, AXA executives may sit on the executive or supervisory board of a Group subsidiary. They may receive directors' fees for attending these meetings.

Group executives may also receive benefits in kind, depending on their status. This is the case for expatriates, for example.

These amounts are in addition to the fixed and variable components of compensation.