Henkel Annual Report 2019 53

Performance-related components
The Company

Shares and bonds Variable annual cash remuneration (Short Term Incentive, STI)

Corporate governance 21
Overview STI
Combined management report Components Basis for assessment / Parameters Weighting Lower threshold 100 % target achievement Upper threshold
Financial targets (bonus) Organic sales growth 1 (OSG) 50 % Minimum OSG OSG target Maximum OSG
Consolidated financial statements
(50 % OSG target amount) (100 % OSG target amount) (150 % OSG target amount)

Further information Adjusted earnings per preferred share 50 % 80 % of the prior-year figure 100 % of the prior-year figure 120 % of the prior-year figure
(EPS) 2 (50 % EPS target amount) (100 % EPS target amount) (150 % EPS target amount)
Individual multiplier • Individually agreed targets
• Absolute and relative performance
compared to market / competition Multiplier ranging from 0.8 to 1.2
• Personal contribution to general
Henkel goals

Performance period Fiscal year (remuneration year)

Cap 3 150 % of the STI target amount (= 3,000,000 euros 4)

1 Figures derived from financial ambitions.

2 At constant exchange rates, versus prior year (actual-to-actual comparison).
3 Including individual multiplier.
4 Remuneration paid to a Management Board member, given a functional factor of 1.

The performance parameters for the annual variable cash
remuneration (STI) are the achieved financial targets for each
fiscal year (“remuneration year”) – the so-called bonus – and
the individual performance of each Management Board mem-
ber, to which a multiplier ranging from 0.8 to 1.2 is applied.
Bonuses are determined on the basis of achievement of the
following additively linked financial targets in the respective
remuneration year, each with a 50-percent weighting: organic
sales growth (OSG) (i.e. sales growth adjusted for foreign
exchange and acquisitions / divestments) and earnings per
preferred share (EPS) adjusted for one-time charges / gains,
restructuring expenses and foreign exchange.
The OSG target is derived from our financial ambitions. EPS
performance is measured on the basis of actual-to-actual com-
parison, i.e. the EPS at constant exchange rates in the year of
payment is compared to the EPS from the previous year.
An appropriate remuneration scale has been established for
both key financials. Thresholds have also been defined;
payment is withheld if the minimum targets are not met,
and capped if they are exceeded. If adjusted EPS at constant
exchange rates in the year of payment is more than 20 percent
above or below the comparable prior-year figure as a result of
extraordinary events, the Supervisory Board of Henkel Man-
agement AG may, at its discretion and after due consideration,
decide to adjust the target, or may determine a new reference
value for measuring performance in the following year.