Compensation and Social Benefits

In addition to their fixed base salary (which includes vacation and Christmas bonuses), WACKER employees usually also receive some variable compensation – a voluntary payment to employees on both the standard and above-standard pay scales. This payment comprises a profit-sharing amount and a personal-performance component. Variable compensation payments totaled €61.7 million groupwide in 2015 and €69.3 million in 2016.

IG BCE (the German mining, chemicals and energy labor union) and chemical-industry employers agreed on a new 17-month collective-bargaining agreement in March 2015. The standard pay scale increased by 2.8 percent, and it was agreed to raise the demographic sum per standard-pay-scale employee to €550 as of 2016 and to €750 as of 2017. A 24-month follow-on collective-bargaining agreement was introduced in June 2016. The first stage of the agreement saw the standard pay scale increase by 3 percent on September 1, 2016. Effective October 1, 2017, it will rise by a further 2.3 percent. WACKER raised the minimum salary bracket values for above-standard-pay-scale employees by 2.5 percent in July 2015, and by a further 2.7 percent in July 2016.

We believe that it is important to treat temporary workers fairly. At minimum, we pay a wage that is in accordance with the German collective-bargaining agreement on industry supplements for temporary employment in the chemical industry (TV BZ Chemie). This is supplemented by workplace, shift and other voluntary allowances that vary depending on the specific plant facility and site involved. WACKER furthermore meets the requirements for equal pay as per German Law on Temporary Employment (“AÜG”; German-language version only).

Other important aspects, alongside salaries, include the company’s social-insurance contributions. Based on what competitors offer and based on local market conditions, these benefits include supplementary sick pay, subsidized company restaurants, and our company cars.

Company Pension Plan

A WACKER company pension is an important compensation component and is available at most of our German and non-German sites – except for regions where the statutory pension appears sufficient or legal provisions are inadequate.

In Germany, the WACKER company pension has two components: the basic pension and a supplementary pension. 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. In addition, employees have the opportunity to enlist in a private plan that minimizes their tax burden while saving for retirement. WACKER matches supplementary contributions as provided for by the collective wage agreements. For the base amount, employees receive a 28-percent match called “Chemieförderung I”; additional contributions receive the 13-percent “Chemieförderung II” match.

Wacker Chemie AG’s pension fund – Pensionskasse der Wacker Chemie VVaG (a mutual insurance company) – provides a company pension to employees in Germany. The fund has some 17,000 members and provides pension payments to around 8,200 retirees. The average pension paid in the period under review was €650 per month. WACKER paid in up to four times its employees’ annual pension contributions, with the exact amount being determined by the individual contribution rate.

The WACKER pension fund achieved a satisfactory result during the 2015/2016 period. Following a difficult year in 2015, where fund assets only grew by around €8 million to €1.98 billion, assets grew by some €200 million in 2016 to €2.18 billion. Despite the difficult capital-market environment, marked by ongoing low interest rates, the WACKER pension fund achieved a market-value return of 1.8 percent in 2015, and 6.9 percent in 2016. The fund has prepared itself well for the coming years with a broad investment portfolio, security mechanisms and continual risk evaluation. The fund again passed all the stress tests required by Germany’s Financial Supervisory Authority (BaFin).

Additionally, WACKER contributes to guaranteed minimum incomes in countries without national mandatory health insurance or pension programs. We make sure that our compensation and social benefits are fair and competitive worldwide. At the very least, they correspond to local legislation 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 and relocation assistance. Lower-paid employees, too, are in a position to 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.

Good social benefits, competitive compensation and motivating tasks make WACKER an attractive employer. This explains our high level of employee loyalty. The average length of service in Germany (permanent staff) is 18.8 years (2015: 18.4 years). On average, executive personnel remain at the company for 21 years.

WACKER holds a regular celebration to honor its employees who have been with the company for many years. In 2016 alone, 342 employees based in Germany were recognized for 25 or 40 years of service, respectively.

Employee Survey at German Sites

WACKER conducted an employee survey in Germany in 2015. The goal was to identify the organization’s strengths and areas for potential improvement. The survey is also intended as a tool for assisting managerial employees in improving performance in their areas of responsibility. The evaluation of all German site results showed that WACKER employees identify with their employer to a large degree.

80 percent of the respondents are proud to work for WACKER and 82 percent would recommend WACKER as an employer. 78 percent are willing to exert themselves and carry out tasks above and beyond what is required of them to contribute toward the Group’s success. In addition, employees gave the Group a better-than-average rating for customer focus. 92 percent emphasized the fact that their tasks and what was expected of them were clearly defined. 90 percent responded that they are given work commensurate with their knowledge and abilities.

Employees felt that there was room for improvement regarding acknowledgment of their accomplishments and opportunities for personal development. At the plants in particular, the employees expressed the wish to be included more in change processes and to learn together from mistakes.

Popular Employer

According to its own managerial employees, WACKER ranks among the top three most popular employers in the German chemical and pharmaceutical industries. In the member satisfaction survey conducted every year by Germany’s Association of Chemical-Industry Executives (VAA), WACKER came third in 2016. The average score for all of the 24 participating companies was unchanged from the year before at 3.1 (with 1 being the highest and 6 the lowest). With a score of 2.63, WACKER performed better than average and, at the same time, made the largest jump of any of the participating companies. WACKER ranked eighth in the 2015 survey, up from twelfth place in 2014.

The strategy pursued by WACKER Greater China’s HR department makes it one of the 100 best employers for Human Resource Management in China. In 2015, the subsidiary won China’s most prestigious “100 Best Human Resource Management (HRM) Companies” award – sponsored by the Chinese recruitment agency “51job” – for the third consecutive year. A year later, “51job” conferred its “Employer Excellence China” and “Role Model of Corporate Training” awards on WACKER Greater China.