In the 2020 financial year, the Supervisory Board revised the compensation system for the members of the Executive Board on the basis of the Act Implementing the Second Shareholders' Rights Directive (ARUG II) and the new version of the German Corporate Governance Code (GCGC) dated December 16, 2019. The current compensation system for the Executive Board was submitted to the Annual General Meeting on May 19, 2021 under agenda item 6 for approval. The Annual General Meeting approved the compensation system with a majority of 94.22%.
The Board of Management compensation system at LANXESS meets regulatory requirements, fulfills the demands of various stakeholders, is appropriate, and matches the market standard. Taking particular account of LANXESS’s sustainable and strategic alignment, significant changes were implemented in the new compensation system adopted by the Supervisory Board in fiscal year 2020 and effective from 2021. In particular, both the short-term variable compensation (the Board of Management’s APP) and the long-term variable compensation (Long-Term Incentive – LTI) will each be based on two measurable targets. In addition, the proportions of short- and long-term variable compensation will in the future be determined such that the long-term compensation components outweigh the short-term ones. Another change relates to payments in the event of a change of control (CoC). The new compensation system is explained in detail below.