The recognition of individual performance encourages employees to think and act like an entrepreneur and strengthens motivation. Henkel has implemented a globally consistent system of performance-related remuneration for its managerial staff. Corporate, team and individual targets link individual achievement incentives with Henkel’s strategic focus.

This principle also applies to non-managerial employees. Approximately 65 percent of them are covered by a performance-based incentive system that enables them to share in the economic success of the Company and its subsidiaries. The design of these schemes reflects local needs and requirements.

In China, non-managerial employees receive annual bonus payments based on five defined team targets, five personal targets and their work attitude. The latter covers aspects such as acceptance of responsibility, initiative, customer orientation, and teamwork skills.

In the Andean countries Colombia, Ecuador, Peru and Venezuela, all non-managerial employees benefit from a standardized system of performance-related remuneration. Two team targets, derived from the targets of the relevant business unit, are supplemented by three personal targets directly related to the employee’s field of responsibility and influence.

Since the profitability of the Luxembourg production facilities for detergents and household cleaners is vitally dependent on the utilization rate of machine capacity, the quarterly bonus payments are linked to this factor.

The performance-related remuneration system is part of the collective wage agreement of Henkel employees in Italy. Every four years, the Company defines the targets for the "premio di partecipazione." Performance indicators for the individual targets as well as the bonus amounts are determined in consultation with the unions and the works council.

With a view to establishing a modern and market-oriented compensation system for management personnel, the remuneration and benefits system for Henkel companies in the USA was harmonized and realigned in 2006. Following the acquisition of DIAL in 2003, three very different compensation systems had existed in parallel in the three U.S.-based organizations – DIAL, Henkel US and Loctite. Harmonization was carried out with the aim of paying performance-based salaries and benefits, and establishing a platform for transferring staff among the three organizations. The entire compensation system was revised and adapted to the local market standards, without increasing the overall costs for the company.

Since 2001, Henkel has been operating a share ownership plan for all employees worldwide, known as the Employee Share Program (ESP). For each euro invested by an employee (limited to 4 percent of salary up to a maximum of 4,000 euros per year), Henkel added an additional 33 cents in the year under review. The idea is to bind the interests of Henkel employees even more closely to those of the Company, while also giving employees an attractive opportunity to provide individually for their future and their retirement.

The number of participants in this plan increased once again in 2007, with some 11,000 employees in around 50 different countries buying Henkel shares. At year-end, 14,100 employees held a total of 3.3 million shares within the ESP, representing around 1.8 percent of total preferred shares outstanding. The vesting period for newly acquired shares is three years.