Lanxess links executive pay to sustainability targets

Cologne, Germany –  Lanxess is embedding sustainability “more firmly” into its corporate strategy through the recent introduction of a new compensation system for its board of management, the polymers and chemicals company said 4 March. 

Around a third of the variable compensation has now been linked to Lanxess’ sustainability performance, with performance in the areas of climate protection and occupational health and safety factored into the system for 2021.

This, it said, means that 80% of the short-term variable compensation now depends on the operating result (EBITDA pre exceptionals) and 20% on occupational health and safety, as measured in terms of lost-time injuries. 

Some 60% of the long-term variable compensation is based on the performance of Lanxess stock price relative to the MSCI World Chemical Index and about 40% on the reduction of greenhouse gas emissions. 

In 2019, Lanxess, which includes the Rhein Chemie rubber chemicals business in its portfolio, set itself the goal of becoming climate-neutral by 2040.

The new compensation system will be proposed to LANXESS stockholders for approval at the annual stockholders' meeting on 19 May.

Lanxess has also assigned the topic of sustainability directly to the members of its management board. 

This covers climate protection and energy, occupational health and safety, environmental protection, products and circular value chains, employees and corporate culture, and transparent reporting on achievement of sustainability. 

And, through a newly created ‘sustainability committee’, all members of the board of management will make joint decisions on major sustainability projects.

“We are very aware of our corporate responsibility, which is why sustainability is a guiding principle of our actions,” said Lanxess chairman Matthias Zachert. “But it is also increasingly becoming a competitive advantage - with customers, talents and on the capital market.”