Compensation and Social Benefits

At WACKER, employees participate in the company’s ups and downs. That is why fixed base salaries (including vacation and Christmas bonuses) are supplemented by variable compensation – a voluntary payment to standard-payscale and above-standard-payscale employees. It consists of a profit-sharing amount and a personal-performance component.

In response to the economic downturn in 2009, the Executive Board and employee representatives agreed on a number of cost-saving measures. Under the agreement, only 50 percent of the 2008 profit share due to standard-payscale and above-standard-payscale employees and only 50 percent of the bonuses due to the Executive Board and to executive personnel were to be paid out initially. The regular compensation of the Executive Board and top management was reduced temporarily. What’s more, WACKER did not raise the base salaries of above-standard-payscale employees by the planned 3.3 percent as of July 1, 2009. The 3.0-percent “value retention” (salary increase) for executive personnel was suspended.

Since business improved in the course of 2009, WACKER paid out the withheld salary components of employees in November 2009, except for the outstanding 50-percent profit share for 2008. Profit sharing and the personal-performance component were suspended for 2009. Because of the economic recovery, WACKER granted employees at its chemical divisions a lump sum in 2010, amounting to 3.75 percent of their fixed annual salaries. The raise in base salaries, suspended in 2009, was implemented at the beginning of 2010.

Alongside compensation, other important aspects include social and fringe benefits. Based on what competitors offer and on local market conditions, these benefits include supplementary sick pay, subsidized company restaurants, and attractive company cars.

WACKER company pensions are a key component of employee compensation. They are available at nearly every site around the world, with individual pension plans complying with country-specific legislation.

In Germany, the WACKER company pension has two components: the basic pension and a supplementary pension. Additionally, employees have the opportunity to enlist in a private plan that minimizes their tax burden. The basic company pension supplements the statutory pension. In taxation terms, the supplementary company pension positively impacts that proportion of the salary which exceeds the upper limit for the statutory pension and the basic company pension.

The basic company pension is provided by the Wacker Chemie VVaG pension fund, established in 1928. The fund has some 16,100 members and provides pension payments to approximately 7,200 retirees. The average monthly pension was approximately €630 in 2009 and 2010. WACKER contributes up to 2.5 times its employees’ annual pension contributions, with the exact amount being determined by the type of agreement.

The WACKER pension fund, with €1.4 billion on its balance sheet, is one of Germany’s largest company pension funds. The market-value return was 8.8 percent in 2009, and 5.5 percent in 2010; the ratio of hidden reserves was 7.7 percent (2010). Thanks to a special allocation by WACKER in 2008 and the positive development of returns in the subsequent two years, the situation of the pension fund improved quickly after the financial crisis, and the pension fund passed all the stress tests required by Germany’s Financial Supervisory Authority (BaFin).

With company pensions supplementing their statutory pensions, WACKER employees can maintain their accustomed living standards on retirement.

WACKER also contributes to guaranteed minimum incomes in countries without national health insurance or state pension programs. We make sure that our compensation and social benefits are fair and competitive worldwide. At the very least, they correspond to local statutory requirements or industrial codes of practice and, in many cases, they surpass the local minimum. WACKER Greater China, for example, offers its employees a host of additional benefits, such as insurance policies or relocation assistance. Lower-paid employees can cover their own and their families’ living costs.

WACKER’s part-time and fixed-term employees also receive the full range of social benefits. However, participation in some benefits and their full payment, e.g. profit-sharing and the company pension, are dependent on minimum seniority.

With its exemplary social benefits and performance-oriented compensation, WACKER remains an attractive employer for current and future employees. This explains our high level of employee loyalty – the 2010 fluctuation rate was 2.5 percent groupwide, and just 0.6 percent in Germany. On average, employees in Germany remained with the company for 17.2 years.

WACKER holds a regular celebration to honor its employees who have been with the company for many years. In 2010 alone, almost 600 employees were recognized for 25 or 40 years of service.

WACKER is one of the best employers in the German chemical industry, as shown in an annual survey by Germany’s Association of Chemical-Industry Executives (VAA). Targeting 2,000 management employees from 26 chemical companies, the survey ranked WACKER second in 2009 and fifth in 2010. It assessed corporate strategies, culture and working conditions. In recognition of the high satisfaction ratings in this survey, the VAA awarded WACKER the Cologne Chemical-Industry Prize in 2009.

A reputation analysis conducted in 2010 confirmed how strongly our employees identify with WACKER. On a scale of 1 (lowest) to 5 (highest), they awarded WACKER a confidence rating of 4.4. Indeed, 6 out of 10 employees were true ambassadors for WACKER, fully endorsing the Group’s expertise and entrepreneurial strength. Companies like WACKER that stake their reputation on innovation and productivity need a highly committed workforce. A comparison with an annual Gallup poll reveals how good our rating was: only 13 percent of German employees feel they have a strong emotional bond to their employer and are fully committed to their jobs.

WACKER ranks among the best employers in China, too. In 2010, our WACKER Greater China subsidiary was awarded the “Top Employer 2010” certificate by the Corporate Research Foundation (CRF). CRF is an international organization that conducts research to identify the best-performing major employers in human resources management. The selection process focuses on the topics of training and advanced training, personnel development, compensation and social benefits, work environment and corporate culture. Alongside WACKER Greater China, approximately 250 other companies from various industries were considered for selection.