Compensation and Benefits

  • Compensation based on employee’s position and individual performance as well as company’s success
  • ROCE determines variable compensation

We want to attract engaged and qualified employees, retain them and motivate them to achieve top performance with an attractive package including market-oriented compensation, individual development opportunities and a good working environment so that they contribute to the company’s long-term success. Our employees’ compensation is based on global compensation principles according to position, market and performance. As a rule, compensation comprises fixed and variable components as well as benefits that often exceed legal requirements. In many countries, these benefits include company pension benefits, supplementary health insurance and share programs. We regularly review our compensation systems at local and regional levels.

We want our employees to contribute to the company’s long-term success. This is why the compensation granted to vast majority of our employees includes variable compensation components, with which they participate in the success of the BASF Group as a whole and are recognized for their individual performance. The same principles basically apply for all employees worldwide. The amount of the variable component is determined by economic success as well as the employee’s individual performance. Since 2018, we have used the BASF Group’s return on capital employed (ROCE) to measure economic success for the purposes of variable compensation. This links variable compensation to our ROCE target.1 Individual performance is assessed as part of a globally consistent performance management process.

In numerous Group companies, our “plus” share program ensures employees’ long-term participation in the company’s success through incentive shares. In 2018, for example, 25,586 employees worldwide (2017: 23,700) participated in the “plus” share program. BASF offers senior executives the opportunity to participate in a share price-based compensation program, the long-term incentive (LTI) program. In 2018, 91% of the approximately 1,100 people eligible to participate in the LTI program worldwide did so, investing up to 30% of their variable compensation in BASF shares.

1 In calculating ROCE, adjustments are made for negative and positive special items resulting from acquisitions and divestitures (e.g., integration costs in connection with acquisitions and gains or losses from the divestiture of businesses) when these exceed a corridor of plus or minus 1% of the average cost of capital basis. An adjustment of the ROCE (in the first 12 months after closing) therefore only occurs in cases of exceptionally high special items resulting from acquisitions and divestitures.

Personnel expenses

The BASF Group spent €10,659 million on wages and salaries, social security contributions and expenses for pensions and assistance in 2018 (2017: €10,610 million). This also includes personnel expenses from the disposal group for the oil and gas business in the amount of €276 million (2017: €268 million). The rise in personnel expenses was primarily driven by the higher average headcount following the acquisition of significant businesses from Bayer, as well as higher wages and salaries. The main offsetting effects were the increase in provisions released for the long-term incentive program compared with the previous year and currency effects.

BASF Group personnel expenses (Million €)






Wages and salaries





Social security contributions and assistance expenses





Pension expenses





Total personnel expenses