Compensation of the Board of Executive Directors and Supervisory Board
Please note
With the exception of the “Disclosures according to sections 289a and 315a of the German Commercial Code (HGB) and explanatory report of the Board of Executive Directors according to section 176(1) sentence 1 of the German Stock Corporation Act (AktG),” the content of this section is not part of the statutory audit but is part of a separate audit with limited assurance.
The content of this section is not part of the statutory audit of the annual financial statements but has undergone a separate limited assurance by our auditor.
The content of this section is voluntary, unaudited information, which was critically read by the auditor.
Compensation of the Board of Executive Directors is based on the size, complexity and economic position of the company. The structure of this compensation is designed to contribute to sustainable business success and the achievement of strategic corporate goals. The amount of the variable compensation is derived both from the achievement of short- and long-term financial and sustainability-related targets and from the development of the share price and dividend per share (total shareholder return). Since the 2024 business year, the short-term incentive (STI) has accounted for 25% and the long-term incentive (LTI) for 41% of the total target compensation for a business year.
In addition to three financial targets, which account for a total of 75% of the STI, the STI for the 2024 business year also defines the following targets1: employee engagement and satisfaction (employee engagement index), occupational and process safety and strategic projects. Of these, the first two are sustainability-related. All three of these targets are equally weighted in the STI and together account for 25% of the total STI formula. This means that 16.7% of the entire STI formula is sustainability-related.
The LTI includes the reduction of CO2 emissions (Scope 1 and 2) of the BASF Group as one of three equally weighted (33.3%2) strategic goals. These have been anchored as the most important nonfinancial key performance indicator in the BASF Group’s steering and compensation systems since 2020.
The sustainability-related performance of the BASF Group is thus included in the compensation of the Board of Executive Directors.
The compensation of the Supervisory Board does not include any variable components and is therefore not tied to the achievement of targets.
The structure and amount of compensation for the Board of Executive Directors are set by the Supervisory Board at the recommendation of the Personnel Committee. In the event of significant changes, but at least every four years, the compensation system determined by the Supervisory Board is submitted to the Annual Shareholders’ Meeting for approval. Compensation for Supervisory Board members is governed by the Statutes of BASF SE, which are decided upon by the Annual Shareholders’ Meeting (legally required by sections 87 and 87a AktG for the Board of Executive Directors and section 113 AktG for the Supervisory Board).
The Compensation Report in accordance with section 162 of the German Stock Corporation Act (AktG) together with the assurance statement of the substantive and formal audit issued by the auditor and the compensation system for the Board of Executive Directors are publicly available on the BASF website.
- The Compensation Report is available online
- More information on the compensation system for the Board of Executive Directors
1 These targets are referred to as “nonfinancial targets” in the Compensation Report (available at basf.com/compensationreport) and account for 25% of the STI formula.
2 The exact percentage influence on compensation depends on the target achievement. For more information, see the Compensation Report at basf.com/compensationreport.
This content fulfills the Disclosure Requirements of the European Sustainability Reporting Standards (ESRS). The ESRS Index gives an overview of the references to the ESRSs in this report.