Remuneration System and Process
The remuneration system for the Executive Board valid up to and including 2024 was refined in line with the AktG, as amended by ARUG II, as of January 1, 2025, primarily to align it with the “Win with Care” corporate strategy developed by the Executive Board and adopted in July 2024. The remuneration system was approved by the Annual General Meeting on April 17, 2025, with a majority of around 87% of the votes cast, and is published on the website at www.beiersdorf.com/investor-relations/corporate-governance/remuneration-of-executive-board-and-supervisory-board. The main elements of the remuneration system are also summarized in this remuneration report.
The new remuneration system applies to all current members of the Executive Board. The service agreements currently in force with these members of the Executive Board have been amended, with a particular view to the long-term variable remuneration components.
Link to Strategy and Guiding Principles of the Remuneration System
A passion for skin care is at the heart of Beiersdorf’s vision of being the best skin care company in the world. The “Win with Care” corporate strategy puts more focus than ever on delivering excellent skincare solutions. Beiersdorf is a company full of passion, commitment, and ambition, with a focus on developing innovative skin care products and solutions that make a real difference in consumers’ lives. It always acts responsibly.
The business strategy is rooted in the clear ambition to grow competitively and sustainably, sets strategic priorities, and is characterized by the will to create added value for people and society for the long term. In this way, Beiersdorf aims to expand its position in the skin care market and ensure sustained profitability.
The “Win with Care” strategy is based on the following strategic decisions, with the underlying success factors delivered though the “Care Beyond Skin” corporate purpose:
The structure of the remuneration system and the actual remuneration awarded on the basis of this system give the members of the Executive Board an incentive to pursue and achieve the goals defined in the strategy and thus work toward achieving sustainable and long-term growth of the company’s enterprise value. In 2025, both the short- and long-term variable remuneration therefore included specific performance criteria geared toward the objectives of the “Win with Care” strategy.
Beyond this strategic link, the Supervisory Board is guided by the following additional factors in structuring the remuneration system and determining the amount of remuneration:
Beiersdorf’s situation |
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The remuneration system is based on the company’s operating, financial, and economic situation as well as its successes and outlook for the future. |
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Duties and performance |
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The remuneration system takes into account the duties and performance of the Executive Board as a whole as well as of the individual members. |
Pay for performance |
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The remuneration system defines appropriate performance criteria for determining the performance based variable remuneration, which accounts for the majority of the total remuneration, to ensure that the Executive Board’s performance is appropriately rewarded, while taking due account of any failure to achieve the defined targets (pay for performance). |
Appropriateness |
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The structure and amount of the Executive Board remuneration reflects customary market practice and is competitive. This is ensured by means of regular benchmarking against the relevant peer groups. In addition, the remuneration for the Executive Board is appropriately balanced in relation to the remuneration for the company’s senior management and employees. |
Consistency |
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The remuneration systems for the Executive Board and senior management create comparable incentives and have predominantly uniform objectives (consistency of the remuneration system). In addition, the corporate targets for employees’ variable remuneration are defined on the basis of the corporate goals defined for the remuneration of the Executive Board. This ensures consistent incentives and, hence, a uniform control effect. |
Conformity |
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The remuneration system for the Executive Board is consistent with the German Stock Corporation Act and takes account of the recommendations and suggestions of the German Corporate Governance Code (with the exception of Recommendation G.10 sentence 1). |
Procedure for Determining, Implementing, and Reviewing the Remuneration System
The Supervisory Board has drawn up and approved the remuneration system in accordance with the statutory requirements and in the light of the recommendations and suggestions of the German Corporate Governance Code (except where the company has declared a deviation from that Code, such as for Recommendation G.10 sentence 1). It was advised and supported in this process by external remuneration advisors and by its Presiding Committee, particularly on questions concerning the appropriateness and market conformity of the amount of the remuneration, and by the Personnel Committee, particularly on questions concerning the remuneration structure. When appointing the external advisors, the Supervisory Board ensured their independence from the Executive Board and the company.
The Supervisory Board regularly reviews the remuneration system, particularly with regard to its appropriateness, including in relation to comparable companies (horizontal comparison) and within the company in relation to senior management and the workforce as a whole (vertical comparison). The review of the remuneration system is prepared by the Presiding Committee, which recommends any necessary adjustments to the remuneration system to the Supervisory Board. The Supervisory Board submits the remuneration system for approval by the Annual General Meeting in accordance with § 120a AktG in the event of any material change to the remuneration system and at least every four years. The remuneration system is next scheduled to be submitted to the Annual General Meeting for approval in 2029.
Definition of Specific Target Total Remuneration and Determination of the Amount of Remuneration
On the basis of the remuneration system, the Supervisory Board defines the specific target total remuneration for the individual members of the Executive Board comprising all fixed and variable remuneration components for the year including ancillary benefits.
The Supervisory Board defines the performance criteria for all variable compensation components for the financial year ahead at the recommendation of its Presiding Committee within the framework of the remuneration system. When defining the performance criteria, the Supervisory Board also determines the weighting of the individual performance criteria within the specific remuneration component. In addition, it ensures that the target remuneration under the variable remuneration components is generally tied more closely to strategic objectives than to operational ones and that the amount of the target remuneration under long-term remuneration components is higher than that under the short-term remuneration component. For the short-term variable remuneration applicable in 2025, the Supervisory Board set the performance criteria in November 2024 following submission of the multi-year planning prepared by the Executive Board. The target total remuneration for the financial year 2025 was also determined in November 2024.
After the end of the financial year (or, in the case of long-term variable remuneration, after the end of the last financial year of the assessment period), the Supervisory Board determines the specific target achievement at the recommendation of its Presiding Committee. For this purpose, achievement of the financial targets is determined in connection with the preparation and approval of the annual and consolidated financial statements. Achievement of the non-financial targets is determined after detailed consultation derived from a comparison of the target/actual achievement of individual performance criteria. The Supervisory Board sets the variable remuneration and the total remuneration for the previous financial year on the basis of the target achievement. For the 2025 short-term variable annual bonus, the Supervisory Board determined the specific target achievement at its meeting on February 6, 2026 (see also e) in the “Remuneration Structure and Elements” section of this remuneration report). The Supervisory Board did not determine any target achievement under long-term remuneration components for financial year 2025 following the calculation of the long-term variable remuneration for the period ending in 2024 (LTP 2021-2024).
Appropriateness and Market Conformity of the Remuneration/Comparison With Market Environment and Employee Remuneration
In determining remuneration, the Supervisory Board pays particular attention to ensuring that the target remuneration appropriately reflects the duties (including division responsibilities) and performance of the member of the Executive Board. In addition to distinctions based on specific functions, e.g., the position of Chairman of the Executive Board and regional responsibilities, the Supervisory Board may also, at its own due discretion, take account of other criteria such as location, experience, and length of service. The Supervisory Board also ensures that the remuneration of the Executive Board appropriately reflects the company’s net assets, financial position, results of operations, and prospects for the future and does not exceed the customary remuneration without reason.
In assessing appropriateness and market conformity, the Supervisory Board particularly considers the specific competitive situation (horizontal comparison). For this purpose, the Supervisory Board considers relevant peer groups, which are selected on the basis of Beiersdorf’s market position (particularly country, sector, and size). The peer groups comprise companies listed in the German DAX and MDAX equity indexes, on the one hand, and an international sector peer group, on the other, which is composed of the following companies: Colgate-Palmolive, Coty, Estée Lauder, Henkel, Kao, Kenvue, L’Oréal, Procter & Gamble (P&G), Puig, Reckitt Benckiser, Shiseido, and Unilever. The horizontal comparison is also intended to ensure that the Executive Board receives competitive remuneration that conforms to standard market practice.
To ensure appropriate Executive Board remuneration in conformance with standard market practice, the Supervisory Board also considers its relationship to the company’s internal remuneration structure (vertical comparison). To this end, it compares the amount of the average annual target remuneration paid to senior management, comprising the first and second management group of the Consumer Business Segment in Germany below the Executive Board, with the Executive Board remuneration. Moreover, the Executive Board remuneration is compared with the amount of the average annual remuneration across all employees in the Consumer Business Segment in Germany (including senior management). The ratio thus determined is also reviewed over time.
The Supervisory Board has reviewed and confirmed the appropriateness and market conformity of the Executive Board remuneration in setting the specific target remuneration for 2025 with the support of an external remuneration expert as part of the refinement of the remuneration system that has been applicable since 2025.