Sustainable Conduct – Commitment to Employees and Society

Creating Attractive Working Conditions

Competitive compensation and variable pay

Our compensation system combines a basic salary reflecting performance and responsibility with elements based on the company’s success, plus extensive additional benefits. Adjustments based on continuous benchmarking make our compensation internationally competitive. This includes, among other things, the uniform evaluation of all managerial positions throughout the Group.

We attach great importance to equal pay for men and women, providing fair compensation and informing our employees transparently about the overall structure of their compensation. Bayer voluntarily pays employees on both permanent and temporary employment contracts in excess of the statutory minimum wage in many of the countries in which we operate.

Online Annex: A 1.4.1.1-7

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Binding and transparent compensation structures

At Bayer, individual salaries are based on each employee’s personal and professional abilities and the level of responsibility assigned to them. At the managerial level, this is based on uniform evaluation of all positions throughout the Group using the internationally recognized Hay method. In areas of the Group and jobs that fall within the scope of a binding collective bargaining agreement, there are no differences in pay based on gender either. This also applies for the compensation of apprentices. In the Emerging Markets and developing countries, compensation levels are aligned to local market conditions. In the majority of cases, full- and part-time employees at our Significant locations of operation A selection of countries that accounted for more than 80% of total Bayer Group sales in 2017 (United States, Germany, China, Brazil, Japan, France, Canada, Italy, Mexico, U.K., India, Spain, Australia, Russia, Switzerland, Poland, Turkey and Argentina) receive the same rates of pay. The situation differs with regard to employees on temporary contracts as they are not entitled to long-term compensation components such as pension plans in some countries.

Our compensation concept also includes variable one-time payments. Approximately €640 million is earmarked for bonus awards to employees for 2017 under the Group-wide Short Term Incentive program (STI program) is the variable income component for all managerial staff. Employees taking part in the program share in the company’s success of the past year in line with a uniform model that applies across the Group. program (2016: approximately €1,070 million for employees in Continuing operations Sales and earnings reporting for continuing operations pertains only to business operations that are expected to remain in the company’s portfolio for the foreseeable future; opposite of discontinued operations. ). In many countries, employee stock programs enable our staff to purchase Bayer shares at a discount. We also offer senior managers throughout the Group “Aspire,” a uniform long-term compensation program based on the development of the share price.

Our personnel expenses for continuing operations amounted to €9,528 million in 2017 (2016: €9,459 million). The change was mainly due to expenses related to compensation adjustments, while bonus payments were considerably lower.

Alongside attractive compensation for their work, Bayer contributes to the financial security of its present and former employees after their retirement. Personnel expenses in 2017 included pension expenses of €933 million. Payments of €1,051 million were made in 2017 to current retirees. The value of total pension obligations at the end of 2017 was €24,492 million.

Personnel Expenses and Pension Obligations

 

 

2016

 

2017

 

 

€ million

 

€ million

2016 figures restated

1

Present value of defined benefit obligations for pensions and other post-employment benefits as at December 31; including Covestro until December 31, 2016

2

Including Covestro until deconsolidation

Personnel expenses

 

9,459

 

9,528

of which pension expenses

 

880

 

933

Pension obligations1

 

28,995

 

24,492

Pension benefits paid2

 

1,041

 

1,051

Work-life balance

We offer our employees flexible working hours and support in child care and caring for close relatives. In many countries our commitment in this area goes beyond the statutory requirements.

In 2017, the Bayer Group had some 9,100 part-time employees, primarily in Europe. This figure represents 9% of the total number of employees.

Online Annex: A 1.4.1.1-8

limited assurance
Percentage of Part-Time Employees by Region and Gender

 

 

Women

 

Men

 

Total

 

 

2016

2017

 

2016

2017

 

2016

2017

 

 

%

%

 

%

%

 

%

%

2016 figures restated

Europe / Middle East / Africa

 

22.9

23.2

 

10.1

10.8

 

15.4

16.0

North America

 

1.1

1.0

 

0.1

0.1

 

0.5

0.5

Asia / Pacific

 

3.0

3.4

 

0.2

0.3

 

1.3

1.5

Latin America

 

0.1

0.1

 

0.0

0.0

 

0.1

0.1

Total

 

13.1

13.5

 

5.2

5.7

 

8.4

8.9

Bayer enables both men and women to take parental leave. Since national parental leave regulations vary widely from country to country, we only compile data for our significant locations of operation. 1,639 women and 950 men at these locations took parental leave in 2017. By the end of the year, 1,977 employees on parental leave had returned to work.

Online Annex: A 1.4.1.1-9

limited assurance

The next table shows the number of employees who have returned after selecting either the standard statutory parental leave program of up to three years per child or Bayer’s more far-reaching “Family & Career” model (up to six years), using Germany as an example. By the end of 2017, 60.9% had returned to work. 43.0% of women and 83.0% of men who have taken parental leave since 2015 have returned to work.

Employees Returning from Parental Leave using Germany as an Example

 

 

Women

 

Men

 

Total

 

 

%

Absolute

 

%

Absolute

 

%

Absolute

1

Includes employees who have left the company due to employer- and employee-driven terminations, severance agreements and expiration of contracts

Employees who have taken parental leave since 2015

 

55.2

1,021

 

44.8

830

 

100.0

1,851

Still on parental leave / with a dormant employment contract

 

51.6

527

 

16.4

136

 

35.8

663

Returned by 2017

 

43.0

439

 

83.0

689

 

60.9

1,128

Terminated1

 

5.4

55

 

0.6

5

 

3.2

60

Bayer has introduced uniform conditions for mobile working (home office) in Germany through a General Works Agreement with the Works Council. Through the “BayZeit” long-term account in Germany, employees can convert part of their salary into free time, which they can later take off to care for children or close family members, or to take part in an advanced training course, for example. In 2017, this program was expanded to include offerings for trainees and family leave.

The General Works Agreement on caring for close relatives helps Bayer employees in Germany to combine working with their role as carers through adapted worktime models and temporary paid leave.

Initiatives to promote health and ensure safe working conditions

In 2017, Bayer adopted a new global framework concept to promote employee health and quality of life (BeWell@Bayer). It expands the core aspect of health into a comprehensive approach, targets further improvements in the daily work environment and is intended particularly to help balance employees’ professional and private lives. We aim to provide employees in all countries with access to affordable and targeted health offerings such as regular medical check-ups, sports programs, rehabilitation and on-site medical care.

Our occupational health management activities include many regular preventive programs, ranging from ergonomic workplaces and stress management to incentive systems to promote healthy behavior. Established offerings such as the program to reduce the workload of older employees have been extended until 2020. Our employee representatives are included in operational health management and are actively involved in its development. We ensure safe working conditions and thus an environment where our employees can work without fear and undertake international business travel without risk.

Online Annex: A 1.4.1.1-10

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Binding agreements at Group level

The Bayer European Forum – which brings together management and employee representatives – has signed the Luxembourg Declaration on Workplace Health Promotion in the E.U. This involves a network of around 200 companies which aims to identify and share best practices and encourages joint measures by employers, employees and society to improve health and well-being at the workplace.

Group-wide initiatives in Germany include the updated General Works Agreements on lifetime working and demographic change and on addressing demographic change at the nonmanagerial level at Bayer. These agreements contain a reduction in employee workloads that was extended to further age groups, as well as measures to ease the return to work of nonmanagerial employees after long-term illness, and an extensive health screening program for all employees. More than 98% of those who were eligible took part in the program to reduce the workload of older employees in 2017.

Social responsibility for employees worldwide

A company pension plan is available to 75%

of Bayer employees.

A company pension plan is available to 75% of Bayer employees worldwide. The benefits provided depend on the legal, fiscal and economic conditions in each country, employee compensation and years of service. Almost 98% of our employees worldwide either have statutory health insurance or can obtain health insurance through the company.

Online Annex: A 1.4.1.1-11

limited assurance
Health Insurance and Pension Coverage

 

 

Health insurance1

 

Pension plans2

 

 

2016

2017

 

2016

2017

 

 

%

%

 

%

%

2016 figures restated

1

Employer-assisted

2

Programs to supplement statutory pension plans

Europe / Middle East / Africa

 

98

98

 

84

85

North America

 

100

100

 

100

100

Asia / Pacific

 

95

95

 

45

46

Latin America

 

100

100

 

56

57

Total

 

98

98

 

74

75

Our social responsibility is also reflected in our approach to restructuring, which includes efforts to take account of our employees’ interests. In Germany, which remains Bayer’s largest operational base with 31,620 employees, business-related dismissals are excluded through the end of 2020 for a large proportion of employees under an agreement with the employee representatives.

Employees at all Bayer sites around the world have the right to elect their own representatives. In 2017, the working conditions for around 63% of our employees worldwide were governed by collective or company agreements. At various country companies, the interests of the workforce are represented by elected employee representatives who have a right to be consulted on certain personnel-related decisions. The contractually agreed working hours of our employees do not exceed 48 hours a week in any country.

Online Annex: A 1.4.1.1-12

limited assurance
Percentage of Collective Agreements by Region1

 

 

2016

 

2017

 

 

%

 

%

2016 figures restated

1

Percentage of employees covered by collective agreements, especially on compensation and working conditions

Europe / Middle East / Africa

 

82

 

84

North America

 

5

 

4

Asia / Pacific

 

53

 

52

Latin America

 

52

 

52

Total

 

62

 

63

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