Agenda
The Supervisory Board approved the Financial Statements prepared by the Board of Executive Directors and the Consolidated Financial Statements of the BASF Group on February 21, 2024. The Financial Statements have thus been adopted according to Section 172 of the German Stock Corporation Act. Therefore, according to the statutory provisions, no resolution by the Annual Shareholders’ Meeting is planned for Item 1 of the Agenda. The documents specified above have been published and can be accessed at www.basf.com/shareholdersmeeting.
The Board of Executive Directors and the Supervisory Board propose to pay a dividend of €3.40 per qualifying share from the profit retained by BASF SE in the financial year 2023 in the amount of €7,434,480,191.81. If the shareholders approve this proposal, a total dividend of €3,034,575,357.60 will be payable on the 892,522,164 qualifying shares as of the date of adoption of the Financial Statements for the financial year 2023 (February 19, 2024).
The Board of Executive Directors and the Supervisory Board propose that the remaining profit retained of €4,399,904,834.21 be allocated to the retained earnings reserve.
In accordance with Section 58(4) sentence 2 of the German Stock Corporation Act, claims to dividends are payable on the third business day following the Annual Shareholders’ Meeting, in this case April 30, 2024.
The Board of Executive Directors and the Supervisory Board propose that formal approval be given to the actions of the members of the Supervisory Board of BASF SE for the 2023 business year.
The Supervisory Board and the Board of Executive Directors propose that formal approval be given to the actions of the members of the Board of Executive Directors of BASF SE for the 2023 business year.
The Supervisory Board proposes – based on the recommendation of its Audit Committee – that Deloitte GmbH Wirtschaftsprüfungsgesellschaft, Frankfurt am Main, be appointed auditor of the Financial Statements and the Group Consolidated Financial Statements of BASF SE and BASF Group for the financial year 2024 as well as auditor for the auditor’s review of the half-year financial report 2024.
The Audit Committee’s recommendation was preceded by a selection procedure carried out in accordance with the EU audit legislation (Regulation (EU) No 537/2014 of the European Parliament and of the Council of April 16, 2014 – EU Audit Regulation). Following this procedure, the Audit Committee recommended to the Supervisory Board that either Deloitte GmbH Wirtschaftsprüfungsgesellschaft, Frankfurt am Main, or Pricewaterhouse-Coopers GmbH Wirtschaftsprüfungsgesellschaft, Frankfurt am Main, be proposed to the Annual Shareholders’ Meeting as auditor of the Financial Statements and the Group Consolidated Financial Statements of BASF SE and BASF Group for the financial year 2024 as well as auditor for the auditor’s review of the half-year financial report 2024. In so doing, the Audit Committee communicated a reasoned preference for Deloitte GmbH Wirtschaftsprüfungsgesellschaft, Frankfurt am Main. The change of auditor as of the financial year 2024 is legally required, as upon completing its audit of the 2023 financial statements, KPMG AG Wirtschaftsprüfungsgesellschaft reached the maximum duration of an audit mandate, which was shortened under the Financial Market Integrity Strengthening Act.
The Audit Committee declared that its recommendation was free from any undue influence by third parties and was not subject to any clauses restricting its choice within the meaning of Article 16(6) of the EU Audit Regulation.
The term of office of all Supervisory Board members will expire at the end of the Annual Shareholders’ Meeting taking place on April 25, 2024. An election of Supervisory Board members is therefore required.
In accordance with Article 40(2) and (3) of Regulation (EC) No. 2157/2001 of the Council of October 8, 2001, on the Statute for a European Company, Section 17 of the SE Implementation Act, Section 21(3) of the SE Participation Act and Article 10 No. 1 sentence 1 of the Statutes, the Supervisory Board is composed of twelve members. Six of the twelve members are elected by the Annual Shareholders’ Meeting. The other six members are elected by the employees in accordance with Article 10 No. 1 sentence 5 of the Statutes in combination with the provisions of the Agreement Concerning the Involvement of Employees in BASF SE of November 15, 2007 (SE Agreement), as amended by the Supplementary Agreement dated November 25, 2015.
Pursuant to Section 17(2) sentence 1 of the SE Implementation Act, the Supervisory Board must consist of at least 30 percent women and at least 30 percent men. The minimum quota is to be fulfilled by the Supervisory Board as a whole unless the shareholder or the employee side objects to joint compliance. The shareholder representative side objected to joint compliance. Consequently, the minimum quota must be fulfilled separately by the shareholder side and the employee side, which must each have at least two women and at least two men. The current composition of the Supervisory Board fulfills this minimum quota as the shareholder side and the employee side each comprise two women and four men.
Based on the recommendation of the Nomination Committee, the Supervisory Board nominates
a) Professor Dr. Stefan Asenkerschbaumer (re-election), Stuttgart, Germany
Vice Chairman of the Supervisory Board of BASF SE
Managing Partner of Robert Bosch Industrietreuhand KG (RBIK) and Chairman of the Supervisory Board of Robert Bosch GmbH
b) Dr. Kurt Bock (re-election), Heidelberg, Germany
Chairman of the Supervisory Board of BASF SE
c) Professor Dr. Thomas Carell (re-election), Munich, Germany
Professor for Organic Chemistry at Ludwig Maximilian University Munich
d) Liming Chen (re-election), Beijing, China
Chair of the World Economic Forum Greater China
e) Alessandra Genco (re-election), Rome, Italy
Chief Financial Officer, Leonardo SpA, Italy
f) Tamara Weinert (first election), Fairhope, Alabama, United States
President and Chief Executive Officer of Business Area Americas as well as member of the leadership team of Outokumpu Oyj, Finland
be elected to the Supervisory Board as shareholder representatives, effective upon conclusion of this Annual Shareholders’ Meeting and, in accordance with Article 10 No. 2 of the Statutes, for a term of four years, i.e., until the conclusion of the company’s Annual Shareholders’ Meeting in 2028.
The current shareholder representative Dame Alison J. Carnwath DBE is not standing for re-election.
If the proposed candidates are elected, the legal minimum quota for women and men would continue to be fulfilled on the shareholder side. The Annual Shareholders’ Meeting is not bound to these proposals for the election. In the view of the Nomination Committee, the proposed candidates for election collectively fulfill the principles for the composition of the Supervisory Board as adopted by the Supervisory Board, including the competence profile and diversity concept. The principles for the composition of the Supervisory Board as well as its competence profile and diversity concept are published in the Corporate Governance Report 2023, which is accessible online as part of the BASF Report 2023 at www.basf.com/report.
According to the assessment of the Supervisory Board, all candidates are considered to be independent. Neither of the proposed candidates has business or personal relationships with BASF SE or one of its Group companies, the governing bodies of BASF SE or any significant shareholder in BASF SE, which would constitute a conflict of interest.
The Supervisory Board has established an age limit of 72 for the elections to the Supervisory Board, which should not be exceeded on the date of the election. None of the candidates exceed this age limit.
It is intended, in accordance with the German Corporate Governance Code, to have the Annual Shareholders’ Meeting vote separately on the nominations (individual election).
It is planned that, in the event of his re-election by the Annual Shareholders’ Meeting, Dr. Kurt Bock will be proposed to the new Supervisory Board as a candidate for the chairmanship of the Supervisory Board.
It is also planned that, in the event of his re-election by the Annual Shareholders’ Meeting, Professor Dr. Stefan Asenkerschbaumer will be proposed to the new Supervisory Board as a candidate for the chairmanship of the Personnel Committee.
Further, it is planned that, in the event of her re-election by the Annual Shareholders’ Meeting, Alessandra Genco will be proposed to the new Supervisory Board as a candidate to chair the Audit Committee.
The profiles of the proposed candidates for the election, information about their mandates in supervisory boards and comparable supervisory bodies as well as other information are contained under No. III. and are also published at www.basf.com/shareholdersmeeting, where they can also be accessed during the Annual Shareholders’ Meeting.
The six employee representatives on the Supervisory Board have already been appointed by the competent representative body of the employees, the BASF Europa Betriebsrat (European Works Council), according to the provisions of the SE Agreement. These representatives are:
a) Tatjana Diether, Limburgerhof, Germany
Deputy Chairwoman of the Works Council of BASF SE, Ludwigshafen Site, and member of the BASF European Works Council
b) Sinischa Horvat, Limburgerhof, Germany
Vice Chairman of the Supervisory Board of BASF SE
Chairman of the Works Council of BASF SE, Ludwigshafen Site; Chairman of BASF’s Joint Works Council and of the BASF European Works Council
c) André Matta, Großkarlbach, Germany
Member of the Works Council of BASF SE, Ludwigshafen Site, and of the BASF European Works Council
d) Natalie Mühlenfeld, Düsseldorf, Germany
District Manager of IGBCE (Mining, Chemical and Energy Industries Union), Düsseldorf District
e) Michael Vassiliadis, Hannover, Germany
Chairman of IGBCE (Mining, Chemical and Energy Industries Union)
f) Peter Zaman, Antwerp, Belgium
Deputy secretary of the works council of BASF Antwerpen N.V
The authorization granted to the Board of Executive Directors by the Annual Shareholders’ Meeting on May 3, 2019, to increase, with the consent of the Supervisory Board, on a one-off basis or in portions on a number of occasions, the company’s subscribed capital by up to €470,000,000 by issuing new shares against contributions in cash or in kind and hereby to also exclude the statutory subscription rights of shareholders in certain instances (Authorized Capital 2019) will expire on May 2, 2024. This authorization has not been exercised to date.
To give the company the continued ability to quickly and flexibly meet its financing needs in the future as well, the Authorized Capital 2019 shall be cancelled and a new authorized capital shall be created against contributions in cash or in kind with the possibility of excluding the subscription right and Article 5 No. 8 shall be amended accordingly (Authorized Capital 2024).
The Board of Executive Directors and the Supervisory Board propose that the following resolutions be adopted:
a) With the entry into force of the Authorized Capital 2024 proposed under b) via its recording in the Commercial Register, the authorization granted under Article 5 No. 8 of the Statutes for the company’s Board of Executive Directors to increase the share capital against contributions in cash or in kind, with the approval of the Supervisory Board, up until the end of May 2, 2024 (Authorized Capital 2019) is nullified.
b) The Board of Executive Directors shall be authorized, with the consent of the Supervisory Board, to increase, up to April 24, 2029, on a one-off basis or in portions on a number of occasions, the company’s subscribed capital by a total of up to €300,000,000 by issuing new registered shares with no par value against contributions in cash or in kind (Authorized Capital 2024). In principle, shareholders are entitled to a subscription right. The new shares can also be taken over by a bank appointed by the Board of Executive Directors with instructions to offer them to the shareholders (indirect subscription right). However, the Board of Executive Directors is authorized, with the consent of the Supervisory Board, to exclude the subscription right of the shareholders within the scope of Article 5 No. 8 of the Statutes mentioned below. To this end, Article 5 No. 8 of the Statutes shall be amended as follows:
“The Board of Executive Directors is authorized, with the consent of the Supervisory Board, to increase, up to April 24, 2029, on a one-off basis or in portions on a number of occasions, the company’s subscribed capital by a total of up to €300,000,000 by issuing new registered shares with no par value against contributions in cash or in kind (Authorized Capital 2024).
In principle, shareholders are entitled to a subscription right. The new shares can be taken over by a bank appointed by the Board of Executive Directors with instructions to offer them to the shareholders (indirect subscription right). However, the Board of Executive Directors is authorized, with the consent of the Supervisory Board, to exclude the subscription right of the shareholders, in particular in the following cases:
a) in the event of capital increases against contributions in kind to acquire companies, parts of companies, or holdings in companies, in return for the transfer of shares in appropriate individual cases,
b) as far as this is necessary to prevent dilution in order to grant the owners of option certificates or the creditors of convertible bonds that are issued by the company or its affiliates in connection with an authorization granted to the Board of Executive Directors by the Annual Shareholders’ Meeting a subscription right to the extent that this would be due to them after exercising the option or conversion right or after fulfilling conversion obligations,
c) to utilize any fractional amounts resulting from the subscription ratio, and
d) if the issue price of the new shares in the case of capital increases against contributions in cash is not substantially lower than the stock market price of the already listed company shares and the total number of shares issued under this authorization is not more than ten percent of the share capital either at the time of the authorization coming into effect or – if this value is lower – at the time that the present authorization is exercised. The proportionate amount of the share capital of those shares that are issued or sold during the term of this authorization in direct or analogous application of Section 186 (3) sentence 4 of the German Stock Corporation Act must be credited against the aforementioned ceiling of ten percent, as well as against shares that are to be issued or granted on the basis of convertible or option bonds granted during the term of this authorization under the exclusion of the subscription right according to Section 186 (3) sentence 4 of the German Stock Corporation Act.
The total shares issued on the basis of the above authorization with the exclusion of the shareholders’ subscription right in the case of capital increases against contributions in cash or in kind must not exceed ten percent of the share capital at the time that this authorization comes into effect or – if this value is lower – at the time of its exercise. The shares that were issued during the term of this authorization based on other capital measures with the exclusion of shareholders’ subscription rights shall be credited against this maximum amount of ten percent.
The Board of Executive Directors is authorized, with the consent of the Supervisory Board, to lay down the further contents of the share rights and the details of the execution of the capital increase.
The Supervisory Board is authorized to adapt the wording of Article 5 of the Statutes in accordance with the particular utilization of the Authorized Capital 2024 and, if the Authorized Capital 2024 has not or not completely been utilized by April 24, 2029, after the expiry of the authorization.”
The report of the Board of Executive Directors on the exclusion of the subscription right in the event of the utilization of the Authorized Capital 2024 in accordance with Article 9 of the SE Regulation in combination with Section 203(2) sentence 2 in combination with Section 186(4) sentence 2 of the German Stock Corporation Act is presented under No. IV. This report can also be found at www.basf.com/shareholdersmeeting and will be accessible there during the Annual Shareholders’ Meeting.
In accordance with Section 120a(1) of the German Stock Corporation Act, the Annual Shareholders’ Meeting of a publicly listed company is to adopt a resolution approving the system of compensation for the members of the Board of Executive Directors as proposed by the Supervisory Board each time a significant change to the compensation system is made, or at least every four years. The Annual Shareholders’ Meeting of BASF SE last adopted a resolution of this kind on June 18, 2020, so at this interval the adoption of a new resolution is required. As part of the regularly scheduled presentation of the compensation system to the Annual Shareholders’ Meeting 2024, the Supervisory Board reviewed the compensation system for the members of the Board of Executive Directors and, based on the preliminary work conducted by the Personnel Committee, decided to further develop the compensation system. In the compensation system for members of the Board of Executive Directors of BASF SE adopted as of January 1, 2024, changes and new definitions relate in particular to the relevant performance indicators for the one-year and multi-year variable performance-related compensation elements as well as the structure and the relative proportions of the individual compensation elements compared to the total compensation.
In the view of the Supervisory Board, the main motivation for further developing the compensation system for the Board of Executive Directors was that the BASF Group reviewed its longstanding steering model and identified potential for refinement as of the 2024 business year.
In further developing the compensation system for the Board of Executive Directors, the Supervisory Board accordingly also made the new performance indicators the basis for the variable compensation of the Board of Executive Directors. In addition to the adjustment to the new financial performance indicators, the short-term incentive will in the future be based on an additive bonus formula customary in the market, which makes the results of each individual target more transparent. At the same time, the relative proportions of the individual compensation elements in the total compensation will be adapted to a structure customary on the market. Within the non-performance-related compensation, the proportion of the company pension benefits will be reduced and the amount of the reduction will be transferred into the fixed compensation. In the performance-related variable compensation, the target amount for the long-term incentive will be increased for the first time since 2020. Overall, the proportion of performance-related (especially the multi-year) variable compensation will thus rise in the total compensation.
The Supervisory Board proposes – based on the recommendation of its Personnel Committee – that the compensation system for members of the Board of Executive Directors of BASF SE as adopted by the Supervisory Board with effect from January 1, 2024, be approved.
The compensation system for the members of the Board of Executive Directors in the adopted version effective January 1, 2024 – including an overview of the significant changes compared to the previous system of compensation for the members of the Board of Executive Directors – is described under No. V. This description can also be found at www.basf.com/ shareholdersmeeting and can be accessed there during the Annual Shareholders’ Meeting.
According to Section 113(3) of the German Stock Corporation Act, at a publicly listed stock corporation, a resolution must be adopted on the compensation of the Supervisory Board at least every four years.
The compensation of the Supervisory Board of BASF SE is set out in Article 14 of the Statutes and was defined by a resolution of the Annual Shareholders’ Meeting on May 12, 2017, as a purely fixed compensation with an additional obligation of Supervisory Board members to use part of the fixed compensation to acquire shares in the Company and to hold these shares until the member leaves the Supervisory Board. By resolution of the Annual Shareholders’ Meeting of June 18, 2020, the most recent amendments included, in particular, a change to the timing of the payment of the compensation and the stipulation of appropriate reimbursement of expenses.
Members of the Audit Committee currently receive €50,000 as additional compensation on top of their fixed annual compensation. In view of the increased responsibility and duties of the members of the Audit Committee due to the more extensive monitoring and control obligations under the Financial Market Integrity Strengthening Act (Finanzmarktintegritätsstärkungsgesetz) and the German Corporate Governance Code, taking into account the development of compensation at comparable companies, and in light of the competition for suitable candidates for the Audit Committee, it appears the amount of the current additional compensation is no longer appropriate. It is therefore planned to increase the annual further compensation for members of the Audit Committee from €50,000 to €75,000 annually.
The Board of Executive Directors and the Supervisory Board therefore propose, with effect from January 1, 2024, to change the compensation system for members of the Supervisory Board as presented under No. VI. and amend Article 14 No. 2 sentence 2 of the Statutes as follows:
“For members of the Audit Committee, the further compensation shall be €75,000.”
Article 14 is otherwise unchanged.
The wording of the provisions on compensation in accordance with Article 14 of the Statutes in the current version dated July 2023 is contained under No. VI. These provisions on compensation can also be found at www.basf.com/shareholdersmeeting and can be accessed there during the Annual Shareholders’ Meeting.
The Board of Executive Directors and Supervisory Board are obligated by Section 162 of the German Stock Corporation Act to prepare a report on the compensation paid and owed to the members of the Board of Executive Directors and the Supervisory Board in the financial year 2023, which is to be presented to the Annual Shareholders’ Meeting for approval in accordance with Section 120a(4) of the German Stock Corporation Act. The Compensation Report for the financial year 2023 and the auditor’s report on the audit of this Compensation Report can be found under No. VII. of this invitation. It can also be found at www.basf.com/compensationreport and can be accessed there during the Annual Shareholders’ Meeting.
The Board of Executive Directors and the Supervisory Board propose that the Compensation Report for the 2023 business year be approved.