Integration of Sustainability-Related Performance in Incentive Schemes
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General Disclosures
Achievement of sustainability targets is firmly enshrined in the Beiersdorf remuneration and incentive schemes. This underscores the Executive Board’s responsibility for creating long-term value for people, the environment, and society.
The Supervisory Board is responsible for the determination of the remuneration of the members of the Executive Board. The total remuneration payable to the members of the Executive Board is composed of fixed and variable elements. The fixed remuneration, which is not tied to performance, comprises the base remuneration plus ancillary benefits. The variable, performance-related remuneration is composed of a short-term variable bonus with annual targets (variable bonus) and a long-term variable bonus (LTP). The sustainability and ESG-related targets are integrated into this variable remuneration.
Variable Bonus
The members of the Executive Board receive a variable bonus tied to the performance of the Consumer Business Segment for each financial year. This is paid out after the Annual General Meeting of the year following the financial year in question. The variable bonus is composed of joint and individual performance criteria that are tied to the company’s financial and non-financial performance as well as its strategic and operational development. The specific performance criteria can also be related to sustainability or ESG.
The performance criteria within the individual variable bonus targets in 2024 included (depending on the member) reduction of greenhouse gas emissions, receipt of the Triple-A rating from CDP, NIVEA sustainability projects, gender diversity, internationalization, and other diversity and inclusion targets. The average proportion of sustainability and ESG-related performance criteria in the 2024 variable bonus was 18% of target remuneration.
Long-Term Bonus (LTI)
Executive Board members receive a multi-annual bonus measured, in accordance with the currently valid remuneration system, on the basis of the targets for the achievement of strategic criteria after the expiry of a four-year bonus period from 2021 through 2024 (LTP 2021 – 2024). Climate-related targets accounted for 20% of the weighting of the entire LTP 2021 – 2024 (based on target remuneration). The climate targets were to reduce global Scope 1, 2, and 3 emissions by 20% (vs. 2018) and increase the share of recycled materials in plastic packaging by 20%, both by 2024 (see chapter “ESRS E1 – Climate Change”). Targets relating to diversity and employee development also accounted for 20% of the weighting.
The average proportion of sustainability and ESG-related targets in the entire performance-related variable remuneration for 2024 was 32% of target remuneration.