Henkel Annual Report 2019
The Company
Shares and bonds
Corporate governance
Combined management report
Consolidated financial statements
Further information
Remuneration report
This remuneration report provides an outline of the objectives,
principles and fundamental structure of the compensation
system for the Management Board, the Supervisory Board and
the Shareholders’ Committee of Henkel AG & Co. KGaA, and
for Henkel Management AG as the Personally Liable Partner
and its own supervisory board; it also explains the level and
structure of the remuneration paid.
The report takes into account the recommendations of the
German Corporate Governance Code (GCGC) as amended on
February 7, 2017 (GCGC 2017) and as adopted by the government
commission on December 16, 2019 (GCGC 2019), and contains
all disclosures and explanations pursuant to the provisions of
the German Commercial Code [HGB] and the appropriate prin-
ciples of German Accounting Standard No. 17 [DRS 17], and
as required by International Financial Reporting Standards
(IFRSs). In some parts of the report, the requirements of the
German Act implementing the Second Shareholders’ Rights
Directive [Gesetz zur Umsetzung der zweiten Aktionärsrech-
terichtlinie, ARUG II] have already been taken into account. The
remuneration report forms part of the combined management
report for Henkel AG & Co. KGaA and the Group, which has been
audited by the external auditor; the associated information has
not been additionally disclosed in the notes to the consolidated
financial statements (Sections 289a (2), 315a (2) HGB).
1. General objectives and principles of the remuneration
systems
Henkel is committed to corporate governance that is responsi-
ble, transparent and aligned to the sustainable and long-term
development of the corporation. We want to create sustainable
value – for our customers and consumers, for our people, for
our shareholders, as well as for the communities in which we
operate.
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Accordingly the remuneration system that Henkel has put in
place for the Management Board, Supervisory Board and
Shareholders’ Committee takes account of the relevant duties
and responsibilities, and is designed to drive implementation
of our corporate strategy and to offer incentives for successful
and sustainable business performance over the long term. The
following principles play a key role in the definition of the
specific relevant remuneration:
General:
• Remuneration and its individual elements must be consis-
tent with regulatory / statutory requirements and the princi-
ples of good corporate governance.
• Remuneration must be consistent with market levels, com-
petitive, and commensurate with the size and international
nature of the corporation’s business, its economic and finan-
cial position, its success, and its prospects for the future.
Management Board:
• Total remuneration is aligned to sustainable long-term busi-
ness performance and corresponding stakeholder targets.
• Remuneration consists of non-performance-related compo-
nents and a substantial portion of variable, performance-
related components.
• A large portion of the variable, performance-related remu-
neration is tied to future performance spanning several years.
• For the variable, performance-related components of remu-
neration, challenging financial performance indicators
reflecting the corporation’s strategy and objectives exist
alongside non-financial individual targets. The financial
performance indicators are weighted more heavily, and are
based on quantitative criteria.
• Reasonable account is taken of the remuneration and
employment policy applied to the corporation’s staff.
• Individual performance is rewarded appropriately.