30.Related Companies and Persons
Related companies
Related entities as defined in IAS 24 (Related Party Disclosures) are those legal entities that are able to exert at least significant influence on Covestro AG and its subsidiaries or over which Covestro AG or its subsidiaries exercise control or have at least a significant influence. They include nonconsolidated subsidiaries, joint ventures, associated companies and post-employment benefit plans.
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Dec. 31, 2019 |
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Dec. 31, 2020 |
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Receivables |
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Liabilities |
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Receivables |
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Liabilities |
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€ million |
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€ million |
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€ million |
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€ million |
Nonconsolidated subsidiaries and associates |
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– |
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5 |
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3 |
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8 |
Associates |
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3 |
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– |
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6 |
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– |
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2019 |
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2020 |
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|---|---|---|---|---|---|---|---|---|
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Sales of goods and services |
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Purchases of goods and services |
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Sales of goods and services |
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Purchases of goods and services |
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€ million |
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€ million |
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€ million |
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€ million |
Nonconsolidated subsidiaries and associates |
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40 |
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67 |
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33 |
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46 |
Associates |
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11 |
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569 |
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14 |
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493 |
The goods and services provided by associated companies mainly result from the ongoing operating business with PO JV, LP, Delaware (United States). Covestro benefits from fixed long-term supply quotas/volumes of propylene oxide (PO) from this company’s production.
Receivables from and payables to related parties mainly comprise leasing and financing matters, trade in goods and services, and other transactions. No impairment losses were recorded on receivables from related parties either in the reporting period or in the reference period.
Related persons
Related persons as defined in IAS 24 are those natural persons who, on account of their function in the Covestro Group, are responsible for Covestro’s global business operations. These persons include the corporate officers of Covestro AG, who are the members of the Board of Management and Supervisory Board.
Compensation of the corporate officers
The compensation for key management personnel in fiscal 2020 amounted to €9,163 thousand (previous year: €9,486 thousand), including the compensation of the Supervisory Board amounting to €1,679 thousand (previous year: €1,747 thousand).
This compensation is shown below:
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2019 |
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2020 |
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€ thousand |
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€ thousand |
Total short-term compensation |
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5,308 |
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5,277 |
Total stock-based compensation (long-term incentive) |
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2,827 |
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2,443 |
Service cost for pension entitlements earned in the respective year |
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1,351 |
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1,443 |
Total (IFRSs) |
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9,486 |
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9,163 |
Aggregate compensation of the members of the Board of Management (according to the German Commercial Code (HGB)) amounted to €6,947 thousand (previous year: €6,274 thousand).
Since 2016, the members of the Board of Management have been entitled to participate in the Prisma long-term stock-based compensation program, as long as they are employed by the Covestro Group, and acquire for their own account and hold an individually defined number of Covestro shares as specified by the guidelines. The fair value of the long-term stock-based compensation (Prisma) granted to the Board of Management in fiscal 2020 was €3,349 thousand (previous year: €2,724 thousand).
Provisions of €3,883 thousand (previous year: €5,103 thousand) were recognized for the short-term variable cash compensation and long-term stock-based cash compensation for the members of the Board of Management serving during the 2020 reporting period. At the end of the year, the present value of the defined benefit pension obligations for the current members of the Board of Management was €12,095 thousand (previous year: €9,818 thousand). Provisions of €1,015 thousand (previous year: €6,027 thousand) were recognized for long-term stock-based cash compensation for former members of the Board of Management. The present value of the defined benefit pension obligations for former members of the Board of Management was €8,270 thousand (previous year: €7,818 thousand).
The compensation of the Supervisory Board is exclusively non-performance-related. In addition to their compensation as members of the Supervisory Board, those employee representatives who are employees of Covestro Group companies receive compensation unrelated to their service on the Supervisory Board. The total amount of such compensation was €652 thousand (previous year: €883 thousand). Pension obligations for employee representatives on the Supervisory Board amounted to €3,798 thousand (previous year: €3,346 thousand).
There were no advances or loans to members of the Board of Management or the Supervisory Board outstanding in fiscal 2020 or the previous year.