The base salary ensures an appropriate standard of living for employees. This constitutes the fixed, predictable component of their compensation package. Non-managerial employees receive the wages and salaries stipulated in collective bargaining agreements, and the apprentice allowance applies to apprentices. These may be subject to considerable variation depending on the specific collective bargaining district in the relevant German state. We have also developed standards for our senior managers, which are based on external market standards and on the base salaries determined by the VAA German association of chemical industry executives. Furthermore, we apply the Hay method to evaluate management responsibilities, and we classify contracts according to internal Bayer salary bands.

Base Salary for Non-Managerial Employees

The salary of non-managerial employees at Bayer is based on the wages and salaries stipulated in collective bargaining agreements. These are regulated by the national collective bargaining agreement for the chemical industry, or by company-specific collective bargaining agreements. Central to this is the salary grade index comprising 13 pay categories. All non-managerial employees are grouped according to their function.

Included in the salary is the annual supplementary payment, also known as the Christmas bonus or 13th month’s salary as well as the vacation pay. The supplementary payment generally amounts to 95 percent of the agreed monthly salary and is received by all non-managerial employees at the end of November. During periods of leave, their normal base salary is paid as vacation pay. The additional vacation allowance based on collective agreements is generally paid in April.

Base Salary for Managers

Bayer uses the Hay method to evaluate all management positions. Employee classification is based on contract levels, which are in turn allocated to salary bands. To ensure that salaries are competitive, we take part in regular market research, as well as conducting our own benchmarking.

Our employees’ base salaries are supplemented by various components related to their achievements and the company’s success. These reward employees’ ability to challenge the status quo and be forward-thinking.

STI (Short Term Incentive)

Our STI system rewards the success and achievements of our managers. This focus on performance incentivizes them to ensure that we meet, or ideally exceed, our targets for the current year. Performance is measured against three factors: firstly, the individual’s performance against their personal targets for the year; secondly, the financial results of the division in question; thirdly, the overall success of the Bayer Group.

VEZ (Variable One-Time Payment)

VEZ is the performance-related salary component for our non-managerial employees, and is the counterpart to STI. The value of the VEZ component and the lack of an individual performance assessment element differentiate it from STI. VEZ comprises three, equally-weighted components: “Group performance,” “Divisional performance,” and “Overall performance of non-managerial employees.” The payment is usually made in April. The amount of the VEZ payment depends on the success of the business and therefore varies from year to year. The better the company’s financial performance, the higher the VEZ payment.

LTI (Long Term Incentive)

Our LTI compensation program – known as “Aspire” – is a global, share-based cash plan, which has a four-year term. The plan is available to employees above a specified contract level, regardless of whether they are a manager or an expert.

IPA (Individual performance award)

Bayer recognizes special contributions of individual employees or teams through the IPA. The IPA is bound to a specific achievement and aims to recognize outstanding performance in as timely a manner as possible.