Compensation and benefits

• Compensation based on employee’s position and individual performance as well as company’s success
• Pay generally comprises fixed and variable components plus benefits

In addition to market-oriented compensation, BASF’s total offer also comprises benefits, individual opportunities for development and a good working environment. Our employees’ pay is based on global compensation principles. These take into account an employee’s position and individual performance as well as the company’s success. Representative analyses of the Ludwigshafen site have shown that there are no systematic differences in pay between men and women, provided the positions and qualifications are comparable. As a rule, compensation is comprised of fixed and variable components as well as benefits that often exceed legal requirements. In many countries, these include company pension benefits, supplementary health insurance, and share programs.

In 2016, the BASF Group spent €10,165 million on wages and salaries, social security contributions and expenses for pensions and assistance (2015: €9,982 million). This represents growth of 1.8% in personnel expenses, primarily as a result of expenses for the long-term incentive program as well as wage and salary increases. Partly countering this rise was the lower average number of employees, in addition to currency effects.

Employees participate in the company’s success

• Return on assets determines variable compensation
• “plus” share program fosters employees’ long-term participation in company

With variable compensation components, we involve employees in the company’s success and reward individual performance. The same principles basically apply for all employees. The amount of the variable component is determined by the company’s economic success (measured by the return on assets¹ of the BASF Group) as well as the employee’s individual performance. Individual performance is assessed as part of a globally consistent performance management process.

In numerous Group companies, employees are offered the chance to purchase shares. The BASF share program “plus” sponsors employees’ long-term participation in the company through incentive shares: By investing a portion of their compensation in BASF shares, they take part in the long-term development of BASF.

BASF offers its executives the opportunity to participate in a share-price-based compensation program. This long-term incentive (LTI) program ties a portion of their compensation to the long-term performance of BASF shares. In 2016, 92% of the approximately 1,200 eligible executives worldwide participated in the LTI program, investing up to 30% of their variable compensation in BASF shares.