LANXESS has established a fair remuneration policy that is linked to the long-term success of the company and offers employees worldwide a transparent, market-rate compensation system. Collective bargaining agreements provide the main basis for the compensation of non-managerial staff in Germany and numerous other countries. The fixed salaries of managerial staff, and of some non-managerial staff, are supplemented by performance-based compensation components that are linked, on the one hand, to the attainment of the Group’s defined EBITDA targets and, on the other, to employees’ individual performance.
In 2013, our employees around the world shared in the company’s success in 2012 with a payout totaling €111 million. Our managers are also able to reward outstanding employee performance quickly and unbureaucratically. All employees worldwide are entitled to such rewards on the basis of a prompt assessment of their performance. In fiscal 2013, this resulted in payments of €9.1 million worldwide for outstanding individual performance.
We again offered an employee stock plan in 2013. All LANXESS Group employees in Germany were given the opportunity to buy LANXESS shares at a 50% discount. The shares were purchased at an average price of €44.59 on the Frankfurt Stock Exchange. The participation rate of 76% represented a renewed increase over the prior year. At the reporting date, our employees and Board of Management members held around 1% of LANXESS shares through stock plans.
For some time now, we have also offered a long-term incentive program for managers in Germany and similar programs in the United States, Canada, India and China. The plan for the period from 2008 to 2010 compared the performance of LANXESS stock against the Dow Jones STOXX 600 ChemicalsSM Index.
For the period 2010 to 2013, the Board of Management introduced a comparable long-term compensation component to replace LANXESS’s Long-Term Incentive Plan (LTIP). The Long-Term Stock Performance Plan 2010-2013 (LTSP) comprises four tranches, one commencing each year. This plan compares the performance of LANXESS stock against the Dow Jones STOXX 600 ChemicalsSM Index over a period of four years. Since participants make a personal investment and there is the chance that the stock will increase in value, these programs are an attractive long-term incentive and a means of boosting employee loyalty. The participation rate is 89%.