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More Henkel Corporate Reporting 2015
Recognition of individual performance on the part of our employees through fair compensation in line with market practices is a fundamental component of our corporate culture. There is no systematic difference between the compensation received by male and female employees.
To reward personal performance, the salaries of around 10,400 employees in managerial positions worldwide include success-related components. The annual individual performance assessment, which is always done in the context of our vision and our corporate values, has a significant influence on these bonus payments. This includes contributions to the Henkel sustainability strategy and targets, if they fall within the sphere of influence of the employee concerned and have a clear bearing on business performance. The incentive systems for non-managerial employees take local requirements and existing collective agreements into account.
Globally uniform compensation system for managers and executives
Our people make all the difference; they provide the foundations for our corporate success. They rightly expect their efforts to be recognized and rewarded. In 2010, we revised our assessment and compensation system to reflect the increased demands of our markets. On the basis of our vision and values, we now encourage achievement orientation and the will to succeed through a globally consistent remuneration system for our managerial staff. It consists of the following elements:
Locally adapted compensation systems
The incentive systems for our non-managerial employees take local requirements and existing collective agreements into account. Bonus systems differ depending on the region, for example, and whether an employee works in sales, research or production. Almost 100 percent of non-managerial employees have access to variable compensation.
|China||In China, non-managerial employees receive annual bonus payments based on five defined team targets, five personal targets and their work attitude. The latter covers aspects such as acceptance of responsibility, initiative, customer orientation, and teamwork skills.|
|South America||In the Andean countries Colombia, Ecuador, Peru and Venezuela, all non-managerial employees benefit from a standardized system of performance-related remuneration. Two team targets, derived from the targets of the relevant business unit, are supplemented by three personal targets directly related to the employee’s field of responsibility and influence.|
|Germany||In Germany, all non-managerial receive a success-related bonus payment, as soon as the objectives specified for the German companies are achieved.|
|Italy||The performance-related remuneration system is part of the collective wage agreement of Henkel employees in Italy. Every four years, the Company defines the targets for the “premio di partecipazione.” Performance indicators for the individual targets as well as the bonus amounts are determined in consultation with the unions and the works council.|
Possibility for Henkel employees to benefit from corporate success
Since 2001, Henkel has been operating a share ownership plan for all employees worldwide, known as the Employee Share Program (ESP). The idea is to bind the interests of Henkel employees even more closely to those of Henkel, while also giving employees an attractive opportunity to provide individually for their future and their retirement. And the employee’s investment (limited to percent of salary up to a maximum of 5,000 euros per year) pays, too: Henkel augments each employee purchase of three shares by an additional share.
The high percentage of employees (30 percent) taking advantage of our share program demonstrates the program’s success and our employees’ confidence in their employer. At year-end, some 14,500 employees held a total of close to 2.7 million shares, representing approximately 1.5 percent of total preferred shares outstanding. The lock-up period for newly acquired ESP shares is three years.
Our contribution to social security
Our employees benefit worldwide from a high level of social insurance provisions. In countries where no state social insurance system exists or such a system covers only basic needs, we organize our own measures and initiatives to supplement state health and pension insurance provisions. In terms of health insurance, our employees are covered either by public health insurance plans or have the option of participating in programs offered by the company. For example, in the United States, where public health insurance arrangements are only just being introduced, we offer all employees the opportunity to participate in private health insurance plans. Furthermore, in countries where state pension systems do not provide sufficient coverage, Henkel has established programs allowing employees to participate in company pension provision plans.