Corporate Governance – Compensation Report

Comparative Presentation of Annual Changes in Compensation and Earnings

The following is the presentation of the annual changes in compensation awarded and due to current and former Board of Management and Supervisory Board members compared with the company’s earnings performance and the average compensation of employees (FTEs) from fiscal years 2017 to 2021 as required by Section 162, Paragraph 1, Sentence 2, No. 2 .

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Five-year comparison of compensation awarded and due to Board of Management members (AktG)1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2017

 

2018

 

2019

 

2020

 

2021

 

 

€ thou­sand

 

€ thou­sand

 

in %

 

€ thou­sand

 

in %

 

€ thou­sand

 

in %

 

€ thou­sand

 

in %

Board of Management members as of December 31, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dr. Markus Steilemann (Chair)

 

2,364

 

3,458

 

+46.3

 

3,168

 

–8.4

 

1,643

 

–48.1

 

4,285

 

>100

Sucheta Govil (since August 1, 2019)

 

–

 

–

 

 

 

320

 

 

 

693

 

+116.6

 

2,108

 

>200

Dr. Klaus Schäfer

 

2,284

 

1,724

 

–24.5

 

2,462

 

+42.8

 

985

 

–60.0

 

2,236

 

>100

Dr. Thomas Toepfer (since April 1, 2018)

 

–

 

3,329

 

0.0

 

1,014

 

–69.5

 

849

 

–16.3

 

2,719

 

>200

Former Board of Management members

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Patrick Thomas (until May 31, 2018)

 

4,493

 

2,266

 

–49.6

 

3,260

 

+43.9

 

597

 

–81.7

 

202

 

–66.2

Frank H. Lutz (until June 2, 2017)

 

1,562

 

–

 

0.0

 

2,111

 

0.0

 

148

 

–93.0

 

–

 

0.0

Total

 

10,703

 

10,777

 

+0.7

 

12,335

 

+14.5

 

4,915

 

–60.2

 

11,550

 

>100

1

Percentage changes always refer to the change from the respective previous year.

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Five-year comparison of compensation awarded and due to Supervisory Board members (AktG)1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2017

 

2018

 

2019

 

2020

 

2021

 

 

€ thou­sand

 

€ thou­sand

 

in %

 

€ thou­sand

 

in %

 

€ thou­sand

 

in %

 

€ thou­sand

 

in %

Supervisory Board members as of December 31, 2021

 

–

 

–

 

0.0

 

–

 

0.0

 

–

 

0.0

 

–

 

0.0

Dr. Christine Bortenlänger

 

105

 

105

 

0.0

 

106

 

+1.0

 

111

 

+4.7

 

126

 

+13.5

Lise Kingo (since April 2021)

 

–

 

–

 

0.0

 

–

 

0.0

 

–

 

0.0

 

84

 

0.0

Petra Kronen (Vice Chair)

 

162

 

160

 

–1.2

 

160

 

0.0

 

152

 

–5.0

 

152

 

0.0

Irena Küstner

 

135

 

134

 

–0.7

 

134

 

0.0

 

127

 

–5.2

 

127

 

0.0

Dr. Ulrich Liman (since January 2018)

 

–

 

127

 

0.0

 

128

 

+0.8

 

121

 

–5.5

 

129

 

+6.6

Prof. Dr. Rolf Nonnenmacher

 

159

 

159

 

0.0

 

159

 

0.0

 

153

 

–3.8

 

153

 

0.0

Dr. Richard Pott (Chair)

 

313

 

310

 

–1.0

 

309

 

–0.3

 

302

 

–2.3

 

302

 

0.0

Petra Reinbold-Knape (since January 2020)

 

–

 

–

 

0.0

 

–

 

0.0

 

141

 

0.0

 

147

 

+4.3

Regine Stachelhaus

 

127

 

125

 

–1.6

 

126

 

+0.8

 

129

 

+2.4

 

142

 

+10.1

Marc Stothfang

 

95

 

105

 

+10.5

 

106

 

+1.0

 

101

 

–4.7

 

107

 

+5.9

Patrick Thomas (since July 2020)

 

–

 

–

 

0.0

 

–

 

0.0

 

53

 

0.0

 

132

 

+149.1

Frank Werth

 

106

 

105

 

–0.9

 

106

 

+1.0

 

101

 

–4.7

 

102

 

+1.0

Former Supervisory Board members

 

–

 

–

 

0.0

 

–

 

0.0

 

–

 

0.0

 

–

 

0.0

Ferdinando Falco Beccalli (until April 2021)

 

105

 

104

 

–1.0

 

106

 

+1.9

 

102

 

–3.8

 

29

 

–71.6

Johannes Dietsch (until July 2020)

 

156

 

155

 

–0.6

 

154

 

–0.6

 

86

 

–44.2

 

–

 

 

Peter Hausmann (until December 2019)

 

154

 

153

 

–0.6

 

153

 

0.0

 

–

 

 

 

 

 

 

Dr. Thomas Fischer (until December 2017)

 

128

 

–

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sabine Wirtz (until February 2017)

 

11

 

–

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

1,756

 

1,742

 

–0.8

 

1,747

 

+0.3

 

1,679

 

–3.9

 

1,732

 

+3.2

1

Percentage changes always refer to the change from the respective previous year.

In addition to the /net loss of Covestro AG (which is legally required to be reported), earnings performance includes the key figures of the Covestro Group underlying short-term variable compensation (, , and ) as well as . The latter will replace core volume growth as a key management indicator for growth starting in fiscal 2022.

Employee compensation was calculated by dividing personnel expenses (wages and salaries plus social expenses and expenses for pensions and other benefits) disclosed in the annual report for the relevant period by the number of employees expressed as full-time equivalents (FTEs) as of the reporting date.

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Five-year comparison of earnings figures (AktG)1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2017

 

2018

 

2019

 

2020

 

2021

 

 

€ million

 

€ million

 

in %

 

€ million

 

in %

 

€ million

 

in %

 

€ million

 

in %

Net income/net loss Covestro AG

 

488

 

496

 

+1.6

 

623

 

+25.6

 

–45

 

–107.2

 

648

 

.

Core volume growth2

 

+3.4%

 

+1.5%

 

 

 

+2.0%

 

 

 

–5.6%

 

 

 

+10.0%

 

 

Free operating cash flow3

 

1,843

 

1,669

 

–9.4

 

473

 

–71.7

 

530

 

+12.1

 

1,429

 

>100

EBITDA4

 

3,435

 

3,200

 

–6.8

 

1,604

 

–49.9

 

1,472

 

–8.2

 

3,085

 

>100

ROCE5

 

+33.4%

 

+29.5%

 

 

 

+8.4%

 

 

 

+7.0%

 

 

 

+19.5%

 

 

1

Percentage changes always refer to the change from the respective previous year.

2

Core volume growth refers to the core products in the Performance Materials and Solutions & Specialties segments. It is calculated as the percentage change in externally sold volumes compared with the prior year. Covestro also takes advantage of business opportunities outside its core business, for example the sale of precursors and by-products such as hydrochloric acid, sodium hydroxide solution, and styrene. These transactions are not included in core volume growth. Retroactive calculation based on the definition of the core business as of March 31 of each subsequent year.

3

Free operating cash flow: cash flows from operating activities less cash outflows for additions to property, plant, equipment, and intangible assets.

4

EBITDA: Adjusted operating result (EBIT) plus depreciation, amortization, and impairment losses; less impairment loss reversals on intangible assets and property, plant and equipment.

5

ROCE: The return on capital employed is calculated as the ratio of EBIT after taxes to capital employed. The indicator is calculated as a ratio of the adjusted operating result (EBIT) after imputed income taxes to capital employed. Capital employed is the capital used by the company. It is the sum of noncurrent and current assets less noninterest-bearing liabilities such as trade accounts payable.

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Five-year comparison of employee compensation (AktG)1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2017

 

2018

 

2019

 

2020

 

2021

 

 

€ million

 

€ million

 

in %

 

€ million

 

in %

 

€ million

 

in %

 

€ million

 

in %

Personnel expenses (in € million)

 

1,915

 

1,958

 

+2.2

 

1,762

 

–10.0

 

1,723

 

–2.2

 

2,298

 

+33.4

Employees2

 

16,176

 

16,770

 

+3.7

 

17,201

 

+2.6

 

16,501

 

–4.1

 

17,909

 

+8.5

Personnel expenses per FTE (€ thousand)

 

118

 

117

 

–1.4

 

102

 

–12.3

 

104

 

+1.9

 

128

 

+22.6

1

Percentage changes always refer to the change from the respective previous year.

2

The number of permanent or temporary employees is stated in full-time equivalents (FTEs). Part-time employees are included on a pro-rated basis in line with their contractual working hours. The figures do not include employees in vocational training.
AktG/German Stock Corporation Act
Stipulates the legal provisions pertaining to German stock corporations.
Net income
Income after income taxes that is attributable to Covestro AG shareholders.
Core volume growth
Core volume growth refers to the core products in the Performance Materials and Solutions & Specialties. It is calculated as the percentage change in externally sold volumes compared with the prior year. Covestro also takes advantage of business opportunities outside its core business, for example the sale of precursors and by-products such as hydrochloric acid, sodium hydroxide solution, and styrene. These transactions are not included in core volume growth.
FOCF/free operating cash flow
Operating cash flows (pursuant to IAS 7) less cash outflows for additions to property, plant, equipment and intangible assets
ROCE/return on capital employed
Ratio of operating result after imputed income taxes to the capital employed
EBITDA/earnings before interest, taxes, depreciation and amortization
EBIT plus depreciation and amortization of property, plant, equipment, and intangible assets