Share-based payment plans

Employee share plan

Since 2001, Henkel has offered an employee share plan ‏(ESP) enabling its employees to acquire Henkel shares. In 2024 again, Henkel added 33 eurocents for each euro invested by an employee ‏(limited to 4 percent of salary up to a maximum of 4,992 euros per year). Around 13,000 employees in 59 countries purchased Henkel preferred shares under this program in 2024. At year-end, some 16,500 employees held a total of around 3.1 million shares in the ESP securities accounts, representing 1.7 percent of total preferred shares outstanding. The lock-up period for newly acquired ESP shares is three years.

Investing in Henkel shares through long-term participation in our ESP has proven to be beneficial for our employees in the past. Employees who invested 100 euros each month in Henkel shares since the program was first launched held portfolios valued at 93,531 euros at the end of 2024 ‏(assuming reinvestment of the dividends before tax deduction), which equates to a total return of 65,931 euros or 339 percent of the cumulative investment.

Global Long Term Incentive Plan 2023

The Global LTI Plan 2023 was introduced on January 1, 2023, to replace the Global LTI Plan 2020+. The Global LTI Plan 2023 provides for variable cash remuneration over a performance and measurement period of three years. At the start of each cycle, the performance indicators of relevance are specified by the Management Board at the start of the fiscal year.

Employees are awarded an opportunity defined as a fixed percentage derived from their individual annual base salary. At the end of the three-year cycle, it is multiplied by the average target achievement over the measurement period of defined performance indicators and paid out to the employees. One exception from these general conditions relates to eligible employees at the highest level of the hierarchy, to whom a percentage of the Incentive is awarded as virtual shares.

The number of virtual shares awarded is determined at the start of each three-year performance measurement period – usually January 1 – by dividing their cycle opportunity by the average price of Henkel preferred shares over the first 15 stock exchange trading days in January of the first fiscal year of the performance measurement period.

The value of a virtual share on the settlement date equates to the average price of Henkel preferred shares over the first 15 stock exchange trading days in January of the year following the three-year performance measurement period. The dividends attributable to the virtual shares during the performance measurement period are reinvested in virtual shares. At the end of the three-year performance measurement period, the virtual shares are paid to the employees in cash. The remuneration under the Global LTI Plan 2023 is payable on condition that members of the plan were employed for three years by Henkel AG & Co. KGaA or one of its subsidiaries in a position senior enough to qualify for participation and that they were not under notice during that period. This minimum period of employment pertains to the calendar year of the award and the two subsequent calendar years.