BASF Report 2023

Compensation and Benefits

We want to attract and retain engaged and qualified employees, and motivate them to achieve top performance with a comprehensive package that includes market-oriented compensation, benefits, individual development opportunities and a good working environment. 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 the global and local levels. We are committed to the U.N. Global Compact’s goal of paying employees a living wage to support them and their families by 2030. Since 2022, we have been conducting a global analysis to determine whether we pay employees such a wage and to close any gaps.

We want our employees to contribute to the company’s success. This is why the compensation granted to the 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 essentially apply for all employees worldwide. The amount of the variable component is determined by economic success as well as the employee’s individual performance. We use 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 2023, for example, around 26,700 employees worldwide (2022: around 27,100) participated in the “plus” share program.

From 2024 onward, variable compensation for senior executives in the BASF Group will be adapted to the Differentiated Steering concept and based on targets derived from the new key performance indicators for the steering of the respective business unit or the BASF Group.

BASF offers senior executives the opportunity to participate in a long-term incentive (LTI) program2 in the form of a performance share plan. The four-year program takes into account the development of the total shareholder return. It incentivizes the achievement of strategic growth, profitability and sustainability targets. To take part in this program, participants must hold BASF shares, the amount of which is based on their individual fixed compensation. In 2023, around 93% of the people eligible to participate in the long-term incentive program around the world did so, holding between 30% and 70% of their fixed annual compensation in BASF shares.

The share price-based compensation program (BASF option program, BOP), which had existed since 1999, was offered for the last time in 2020. Due to the maximum program term of eight years, exercise gains from the BOP program can still accrue until June 30, 2028.

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

2 The LTI program referred to here is aimed at management levels 2 to 4 as well as individual employees who have attained senior executive status by virtue of special expertise.

Personnel expenses

Expenses for wages and salaries, social security contributions and assistance, as well as for pensions totaled €10,950 million in 2023. In the previous year, these amounted to €11,400 million. The decline was mainly due to the lower additions of bonus provisions, currency effects, particularly from the U.S. dollar and the Argentine peso, as well as lower pension expenses. A higher wage and salary level as well as a higher average number of employees had an offsetting effect.

BASF Group personnel expenses (Million €)





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Social security contributions and assistance expenses




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Total personnel expenses




Differentiated Steering
In order to increase the competitiveness of its businesses, BASF is introducing a set of measures. These include the introduction of new financial steering indicators tailored to each business. Additionally, our business areas are continuing to adjust their specific business models and processes, supported by adapted process structures, IT systems and governance frameworks.

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