✓ audited

Personnel expenses, compensation and social benefits

In addition to market-oriented pay, BASF’s total package also comprises social benefits, individual opportunities for development and a good working environment. The compensation of our employees worldwide is based on objective criteria. Compensation includes remuneration with fixed and variable components as well as social benefits that often exceed the legal requirements. These include company pension benefits, supplementary health insurance and share programs. In 2012, the BASF Group spent €9,089 million on wages and salaries, social security contributions and expenses for pensions and assistance (2011: €8,576 million). Personnel expenses rose by 6.0%, due particularly to the higher number of employees and to wage and salary increases, as well as to higher additions to provisions for our stock-price-based compensation program, the long-term incentive (LTI) program.

An analysis of all management-represented employees at our site in Ludwigshafen has shown that there is no systematic difference in compensation of women and men, provided the jobs and qualifications are comparable. The difference in income was found to be less than 1%.

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BASF Group personnel expenses (million €)

 

2012

2011

Change in %

Wages and salaries

7,355

6,856

7.3

Social security contributions and expenses for pensions and assistance

1,734

1,720

0.8

Thereof for pension benefits

427

465

(8.2)

Total personnel expenses

9,089

8,576

6.0

Employees’ participation in company success

  • plus” share program encourages employees to make long-term investments through incentive shares: 20,362 employees purchased 773,640 BASF shares in 2012
  • Compensation program ties a proportion of senior executives’ compensation to the long-term performance of BASF shares: in 2012, 92% of eligible senior executives worldwide participated in the LTI program

With variable compensation components, employees participate in the company’s success and are rewarded for their individual performance. The same basic principles apply to all employees. The variable component is determined by the economic success of the BASF Group – measured by the return on assets – and the employee’s individual performance.

The bonus payment for 2012 will once again reach a high level. In numerous Group companies, employees are able to purchase shares in BASF SE. The “plus” share program promotes the long-term participation of our employees in the company through incentive shares, allowing them to invest part of their compensation in BASF shares. In 2012, 20,362 employees around the world purchased 773,640 shares under the “plus” program.

Since 1999, BASF has offered its senior executives the opportunity to participate in a stock-price-based compensation program. This long-term incentive (LTI) program ties a proportion of their compensation to the long-term performance of BASF shares. In 2012, 92% of the approximately 1,200 senior executives eligible worldwide participated in the LTI program, investing up to 30% of their variable compensation.