31 – Compensation for the Board of Executive Directors and Supervisory Board

The annual variable compensation in effect until the end of 2017 was replaced as of 2018 with a forward-looking performance bonus that is geared to sustainable corporate development and has a three-year deferral component. The performance bonus is based on the performance of the Board of Executive Directors as a whole and the return on capital employed (ROCE) of the BASF Group. Subject to certain conditions, ROCE is adjusted for special items from acquisitions and divestitures. The conditions for the adjustment of ROCE were not met in 2018.

Until December 31, 2017, performance-related compensation of the Board of Executive Directors was based on the return on assets adjusted for special effects, as well as the performance of the Board of Executive Directors as a whole. Return on assets corresponds to income before income taxes plus interest expenses as a percentage of average assets.

The members of the Board of Executive Directors were granted 210,228 option rights under the long-term incentive (LTI) program in 2018. The market valuation of the option rights of active and former members of the Board of Executive Directors resulted in income totaling €28.5 million in 2018 (2017: €5.8 million).