8. Incentive Systems

The company discloses how target agreements and remuneration schemes for executives and employees are also geared towards the achievement of sustainability goals and how they are aligned with long-term value creation. It discloses the extent to which the achievement of these goals forms part of the evaluation of the top managerial level (board/managing directors) conducted by the monitoring body (supervisory board/advisory board).

There is a Group-wide compensation strategy that provides for variable compensation systems for the executives of the respective companies in order to set the best possible incentives for successful business. Within the scope of the individual target agreements, it is possible to link pay with the long-term value creation of the company, individual areas or even specific sustainability indicators. The annual target agreements with management involve both immediate economic and financial targets, as well as qualitative ones. These are not necessarily sustainability objectives in a narrow sense; the intention behind the qualitative targets, however, is to promote and more effectively anchor sustainable economic activity. In addition, the company is considering the introduction of an additional compensation component for a larger number of management staff that is oriented towards the long-term value creation of the company.

A catalog of objectives is used to define targets and comprises the following categories: Quality and hygiene audits, reduction of average fuel consumption, occupational safety goals, contributory work in HR processes for the steady improvement of employee satisfaction, innovation objectives (e.g. provision of suggestions for improvement and proof that these are being tracked, etc.). Our HR business partners advise management on the transition to specific, traceable target agreements and remain in close contact with the HR competence center, whose Compensation & Benefits department is, among other things, responsible for the conceptualization and development of group-wide incentive systems.

The attainment of the targets is monitored and reviewed by the respective managers or management teams. The amount of variable compensation is dependent on the degree of target attainment, which is measured based on the parameters defined in the target agreements.