4. Remuneration Structure for Management

The total remuneration structure is highly performance- and success-oriented to ensure that shareholder and management interests are aligned. As part of Clariant’s remuneration philo­sophy, performance-based Short-Term and Long-Term Incentives in relation to total compensation increase with increasing responsibility/ management level (see exhibit Global Pay Mix Figure 001). While Long-Term and Short-Term Incentives are based on Group Performance Indicators only (details are disclosed in chapter 5), individual performance – measured through a consistent, global Performance Management System – is a determining factor in career development and the annual salary review process. Within the Global Performance Management System, each manager’s or employee’s performance is assessed and discussed on a yearly basis. Clariant has practiced a calibration process of individual performance ratings for all management levels since 2017. In 2021, Clariant held calibration sessions covering over 90 % of the population participating in the performance management process. In conjunction with other factors, such as internal and external market conditions, this results in transparent and consistent salary decisions. In general, Clariant applies a four-eyes principle, which includes involving the line manager and the next-level supervisor, in addition to obtaining guidance from global or local Human Resources professionals.

graphic: Clariant Culture: global pay mix (relative structure) in % of total compensation

The total compensation for the Chief Executive Officer (CEO) and the members of the Executive CommitteeExecutive CommitteeManagement body of joint stock companies; at Clariant the Executive Committee currently comprises four members.View entire glossary (EC) was reviewed during the year 2020. The remuneration levels and structure were compared against a peer group of twelve companies within the chemical industry headquartered in Europe. The review led to the decision to reduce the overall remuneration level for the newly appointed CEO and the EC members as well as to amend the pay-mix structure, focusing on STI and LTI. The changes became effective 1 January 2021.