28.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, or are controlled by a related person or close family member of such a person. They include nonconsolidated subsidiaries, joint ventures, associated companies and other related companies and persons.
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Dec. 31, 2020 |
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Dec. 31, 2021 |
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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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3 |
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8 |
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– |
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6 |
Associates accounted for using the equity method |
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6 |
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– |
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19 |
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– |
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2020 |
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2021 |
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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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33 |
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46 |
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48 |
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67 |
Associates accounted for using the equity method |
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14 |
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493 |
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31 |
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835 |
The goods and services provided by associated companies mainly result from the ongoing operating business with PO JV, LP, Houston, Texas (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.
The services purchased from other related companies and persons comprise consulting services for Supervisory Board and Works Council elections priced at arm’s length. In the 2021 reporting year, services amounting to €175 thousand (previous year: €0 thousand) were purchased, and liabilities totaled €23 thousand (previous year: €0 thousand) as of December 31, 2021.
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 corporate officers of Covestro AG in fiscal 2021 amounted to €17,023 thousand (previous year: €9,163 thousand), including the compensation of the Supervisory Board amounting to €1,732 thousand (previous year: €1,679 thousand).
This compensation is shown below:
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2020 |
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2021 |
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€ thousand |
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€ thousand |
Total short-term compensation |
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5,277 |
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12,661 |
Total share-based compensation (long-term incentive) |
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2,443 |
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2,188 |
Service cost for pension entitlements earned in the respective year |
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1,443 |
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2,174 |
Aggregate compensation (IFRSs) |
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9,163 |
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17,023 |
Aggregate compensation of the members of the Board of Management (according to the German Commercial Code (HGB)) amounted to €15,102 thousand (previous year: €6,947 thousand).
Since 2016, the members of the Board of Management have been entitled to participate in the Prisma long-term share-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 share-based compensation (Prisma) granted to the Board of Management in fiscal 2021 was €4,176 thousand (previous year: €3,349 thousand).
Provisions of €12,808 thousand (previous year: €3,883 thousand) were recognized for the short-term and long-term variable cash compensation for the members of the Board of Management serving during the 2021 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 €12,594 thousand (previous year: €12,095 thousand). Provisions of €202 thousand (previous year: €1,015 thousand) were recognized for long-term share-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 €7,696 thousand (previous year: €8,270 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 €667 thousand (previous year: €652 thousand). Pension obligations for employee representatives on the Supervisory Board amounted to €3,698 thousand (previous year: €3,798 thousand).
There were no advances or loans to members of the Board of Management or the Supervisory Board outstanding in fiscal 2021 or the previous year.