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Compensation of the Board of Management

(fiscal 2016)


Structure of the compensation

The structure of the compensation system and the level of compensation for the members of the Board of Management are determined by the Supervisory Board. The appropriateness of the compensation is regularly reviewed. The criteria for determining the appropriateness of the compensation for an individual Board of Management member include, in particular, his duties, his personal performance, the economic situation, and the success and sustainable growth of the LANXESS Group. Consideration is also given to compensation at comparable companies and the company’s overall compensation structure, including as well the ratio between the compensation of the Board of Management and that of LANXESS’s senior executives and the rest of the workforce, both overall and in terms of time. The compensation structure is also designed to be competitive in the international market for highly qualified executives and provide the motivation to successfully work toward sustainable corporate development.

 

The compensation system that was introduced for members of the Board of Management in 2010 was approved by the Annual Stockholders’ Meeting of LANXESS AG on May 28, 2010. This compensation system was applied when concluding the service contracts with all Board of Management members.

 

Components of the compensation 

 

The components of the compensation for members of the Board of Management are the annual base salary; the variable components, which are the Annual Performance Payment, the Long-Term Stock Performance Plan and the Long-Term Performance Bonus; and a retirement pension. The three variable components are linked to LANXESS’s annual performance and, particularly, to its corporate success over a number of years. The average compensation mix of 31 % annual base salary and 69 % variable
compensation components, assuming 100 % target attainment, is strongly aligned with the company’s performance and long-term value creation. The present service contracts for members of the Board of Management set out the annual base salary and caps on the amounts for the variable compensation components. They do not provide for a separate cap on total compensation, even taking into account a possible discretionary bonus.

Compensation of the Board of Management

 

 

 

 

 

 

 

 

in %

 

 

 

 

 

Annual base salary

 

31

Annual Performance Payment

 

35

Long Term Incentive Plan/Long Term Stock Performance Plan

 

20

Long Term Performance Bonus

 

14

 

 

100