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 which are controlled by a related person or a close family member of such a person. These include unconsolidated subsidiaries, joint ventures and associates, post-employment benefit plans, and other related parties.
| Receivables from and liabilities to related companies | ||||
|---|---|---|---|---|
| Dec. 31, 2023 | Dec. 31, 2024 | |||
| Receivables | Liabilities | Receivables | Liabilities | |
| € million | € million | € million | € million | |
| Nonconsolidated subsidiaries and associates | – | 7 | – | 3 |
| Associates accounted for using the equity method | 7 | 3 | 7 | 5 |
| Post-employment benefit plans | 63 | – | 64 | – |
Receivables from and payables to related companies mainly relate to leases and financing arrangements, supply and service relationships, and other transactions. No impairment losses were recognized on receivables from related companies in the reporting year or in the previous year.
Receivables from pension plans (excluding interest) with a fair value of €64 million as of December 31, 2024 (previous year: €63 million) resulted from initial funding loans granted. Covestro AG has agreed to provide Bayer-Pensionskasse VVaG, Leverkusen (Germany), with an interest-bearing initial funding loan of up to €208 million and Rheinische Pensionskasse VVaG, Leverkusen (Germany), with an interest-bearing initial funding loan of up to €11 million, both at their request. The pension funds are entitled to draw down amounts necessary to meet their regulatory solvency requirements at any time up to the amounts disclosed. The outstanding receivables are subject to a five-year interest rate adjustment mechanism. The loan commitments to the pension funds are recognized as other financial obligations.
| Sales and purchases of goods and services to/from related companies | ||||
|---|---|---|---|---|
| 2023 | 2024 | |||
| Sales of goods and services | Purchases of goods and services |
Sales of goods and services | Purchases of goods and services | |
| € million | € million | € million | € million | |
| Nonconsolidated subsidiaries and associates | 45 | 74 | 44 | 68 |
| Associates accounted for using the equity method | 16 | 689 | 25 | 755 |
The goods and services received from associates accounted for using the equity method mainly resulted from the ongoing business operations 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.
Related persons as defined in IAS 24 include the corporate officers of Covestro AG, who are the members of the Board of Management and Supervisory Board.
The compensation for corporate officers of Covestro AG in fiscal 2024 amounted to €15,932 thousand (previous year: €13,944 thousand), including the compensation of the Supervisory Board amounting to €2,523 thousand (previous year: €2,515 thousand).
This compensation is shown below:
| Compensation of the corporate officers according to IFRSs | ||
|---|---|---|
| 2023 | 2024 | |
| € thousand | € thousand | |
| Total short-term compensation | 7,665 | 7,410 |
| Total share-based compensation (long-term incentive) | 4,915 | 7,046 |
| Service cost for pension entitlements earned in the respective year | 1,364 | 1,476 |
| Aggregate compensation (IFRSs) | 13,944 | 15,932 |
Aggregate compensation of the members of the Board of Management according to the German Commercial Code (HGB) amounted to €8,826 thousand (previous year: €8,430 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 2024 was €3,939 thousand (previous year: €2,899 thousand).
Provisions of €13,038 thousand (previous year: €11,706 thousand) were recognized for short-term and long-term variable cash compensation for the members of the Board of Management serving during fiscal 2024. 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 €7,960 thousand (previous year: €6,499 thousand). For former members of the Board of Management, provisions of €2,699 thousand (previous year: €2,421 thousand) were recognized for long-term share-based cash compensation. The present value of the defined benefit pension obligations for former members of the Board of Management was €11,727 thousand (previous year: €12,060 thousand).
Supervisory Board compensation 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 €671 thousand (previous year: €555 thousand). Pension obligations for employee representatives on the Supervisory Board amounted to €2,258 thousand (previous year: €2,229 thousand). Pension obligations for employee representatives who had left the Supervisory Board and the company totaled €1,108 thousand (previous year: €1,137 thousand).
As in the previous year, the company did not grant any advances or loans to members of the Board of Management or the Supervisory Board in fiscal 2024.