Remuneration of the Board Members

Principles of the remuneration system for the board of management members

The remuneration system for the members of the Board of Management of Brenntag described below delivers a key contribution to achieving an ambitious growth strategy by providing effective incentives for growth and increasing profitability. The Board of Management remuneration system is designed to be clear and understandable and supports the long-term and sustainable development of Brenntag. The system is geared towards transparent, performance-related remuneration that is strongly linked to the success of the Company and depends in particular on long-term, but also operational, targets as well as the development of the Brenntag share price.

In designing the remuneration system, the interests of our customers and employees were taken into account. The remuneration system also represents a high degree of harmonization of the interests of the shareholders with those of the Board of Management through a clear share reference in which the return on the Brenntag share is the central performance criterion of the Performance Share Plan. In addition an obligation to acquire and hold Brenntag shares is introduced for the Board of Management.

The provisions of the German Stock Corporation Act (AktG) and the recommendations for the remuneration system for members of the Board of Management in section G of the German Corporate Governance Code (DCGK) provide the regulatory framework for the remuneration system.

Procedure for determining and implementing the remuneration system

The Supervisory Board is responsible for determining, implementing and reviewing the remuneration of the Board of Management. The Presiding and Nomination Committee of the Supervisory Board discusses and reviews the remuneration system for the Board of Management at regular intervals and prepares resolutions on any changes thereto. The rules on dealing with conflicts of interest also apply to the determination, implementation and review of Board of Management remuneration. The remuneration system approved by the Supervisory Board will be submitted to the General Shareholders’ Meeting for approval for the first time at the General Shareholders’ Meeting in 2021. In the future, the remuneration system will be submitted to the General Shareholders’ Meeting for approval in the event of significant changes, but at least every four years. In the event that the General Shareholders’ Meeting does not approve the remuneration system, a revised remuneration system will be put to the vote at the next General Shareholders’ Meeting.

In its decisions on setting the remuneration system, the remuneration and employment conditions of the employees of Brenntag SE were taken into account. In doing so, the Supervisory Board has paid particular attention to the consistency of the incentive effect so that the Board of Management, managers and employees jointly deliver on the long-term Group strategy.

In setting the remuneration, the Supervisory Board pays attention to an appropriate relation- ship to the tasks and performance of the Board of Management members and to the situation of the Company. In addition, consideration is given to the customary nature of the remuneration in comparison with other, comparable companies, as well as vertical appropriateness to the remuneration of senior management and the overall workforce.

Overview of the remuneration system

The following figure shows the remuneration components and further contractual provisions of the remuneration system which are described in more detail.
Overview about the remuneration system

Remuneration structure

The remuneration of the members of the Board of Management comprises fixed remuneration and variable remuneration. The fixed remuneration consists of Annual Base Salary, pension benefits and benefits in kind. The variable remuneration is composed of short-term and long-term variable remuneration components. The remuneration of the Board of Management is geared towards the long-term and sustainable development of Brenntag in that the portion of the long-term variable component (Performance Share Plan) outweighs the portion of the short-term variable component (Annual Bonus). In order to achieve this goal for each Board of Management member, the target amounts of the Performance Share Plan defined in individual contracts always exceed the target amounts of the Annual Bonus.

The remuneration structure of the target total remuneration is very comparable for the Chairman of the Board of Management and for other members of the Board of Management. The ranges for the portions of the remuneration components are therefore shown in one bar in the following chart:

Remuneration structure

Fixed remuneration

Variable remuneration

Other

General information

The provisions of the German Stock Corporation Act (AktG) and the recommendations for the compensation system for members of the Board of Management in accordance with the German Corporate Governance Code provide the regulatory framework for the compensation system.

On 23 December 2020, the Supervisory Board adopted a remuneration system for the members of the Board of Management that complies with the requirements of ARUG II and takes into account the recommendations of the revised version of the German Corporate Governance Code. The remuneration system adopted by the Supervisory Board was approved at the 2021 General Shareholders’ Meeting. The complete overview of the remuneration system for the members of the Board of Management is included in the convening of the General Shareholders’ Meeting 2021.

Remuneration of the Board of Management