Our different remuneration components encourage our employees to identify with the company’s long-term, strategic objectives. This mix includes target- and performance-related remuneration for managers as well as a global performance management system that ensures regular feedback between employees and line managers. Variable remuneration components are indexed to the company’s success in reaching targets as well as the performance of the individual manager. In 2011, we adapted the structure of employee salaries in Germany, aligning the variable component more closely with these factors.
Our employees are paid on the basis of their role, qualifications and performance. We do not differentiate payment based on gender. Our global performance management system includes assessments of all management positions. These evaluations focus on transparency, equality and fair-market-value remuneration. We benchmark remuneration levels internally and externally to ensure payments are appropriate and in keeping with established market practice. The remuneration of the Executive Board and the Supervisory Board is disclosed in our financial report in compliance with the recommendations of the German Corporate Governance Code.
We offer our employees various benefit plans beyond their salaries. These are organised at local level and vary from location to location. Occupational pension plans are just one example of the types of schemes we provide. We offer around 39,200 employees in over 50 countries company and employee-financed pension schemes and healthcare benefits. Almost 78 percent of the Group-wide workforce is thus covered by company benefit schemes.
Pension plans should be attractive yet fair for every generation. They must also align with the social standards of the country in question. To ensure this is the case, The Linde Group has introduced binding regulations that govern the introduction, closure or modification of pension schemes worldwide (pension governance). Before changes can be made to the local pension schemes, they must first be approved by the Global Pension Committee. The committee consists of the Chief Executive Officer, the Chief Financial Officer and experts from Accounting, Treasury and Human Resources.
The Group’s largest pension plans – which account for around 92 percent of Linde’s global pension obligations – are in the UK, Germany, the US, Australia, the Netherlands, South Africa and Switzerland. Pension plan structures in the UK were overhauled in 2011 to ensure the continued viability of existing defined benefit plans alongside the defined contribution plan available to new employees.
In the 2011 financial year, we spent a total of EUR 190 million (2010: EUR 178 million) on pensions and support. We provided occupational pensions for 28,903 current employees who are active members of schemes. 19,725 former employees have acquired a non-forfeitable entitlement to a company pension (deferred pensions) and 31,112 pensioners drew a Group occupational pension.
Our employees should be given the opportunity to balance personal and professional goals. We help them do this by offering flexible work schemes, childcare support and assistance for employees with family members who are ill or require special care. In addition to flexitime and teleworking options, we offer part-time work models. In 2011, 2 percent of The Linde Group workforce were part-time employees. Also in 2011, we approved a new works agreement on teleworking options for employees in the Engineering Division. In the same year, a total of 714 employees worldwide took parental leave. 129 of these were men.
Further company benefits are usually organised at regional or local level. Our employees in Germany have free access to a professional service finder, for instance, to help locate care options for children and dependent family members. We also offer a number of day-care places in and around Munich. To meet rising demand, we increased the number of places from 20 to 37 in 2011. Beyond the Munich area, we offer financial childcare subsidies for employees living in Germany. We also offer employees in the US consultation and service finder support to help locate care options for children and dependent family members. Australian Linde Group member BOC extended the period of parental leave available to its employees to 21 weeks, which is now 3 weeks longer than the statutory entitlement.
Our employees work in countries with varying requirements governing hours of work per week. These standards are based on national regulations and collective wage agreements. As a rule, contracts for full-time employees stipulate a maximum working week of 48 hours worldwide.
We maintain good working relationships with employee representatives and unions. In 2011, 53.5 percent of our employees were employed under collective wage agreements (2010: 54.9 percent). In Germany, the Works Constitution Act (BetrVG) regulates cooperation between company management and employee representatives. Employee representation at Linde is two-tiered, consisting of decentralised works councils in the individual units and a central works council for the Group as a whole. In Germany, one of the main outcomes of talks between employee representatives and the company was a works agreement regarding variable remuneration, which was agreed during the period under review.
We have also maintained a European Works Council for several years now. Currently with 28 members, the Council promotes communication between employee representatives across national borders. In 2011, we launched a project to further strengthen collaboration between individual regional companies, management and the European Works Council. In this context, the European Works Council met another two times in addition to its three regular annual meetings in 2011. The project is supported by the European Union and is scheduled to finish in summer 2012.
Honest employee feedback is crucial for our HR activities. In 2010, we carried out a global voluntary employee survey for the first time. 73 percent of forms were completed and returned, confirming a high level of interest among employees. The survey provided us with valuable information on how to further increase employee satisfaction. For instance, our employees would welcome improvements in the areas of personnel management and talent development as well as communication to support this.
Following evaluation of the survey results, team meetings were held in all lines of business in 2011 to assess the current status and plan binding improvement action plans. By the end of 2011, over 70 percent of the teams had already implemented the planned measures. A range of issues were discussed, including the introduction of teleworking options, a new promotion guideline and team spirit training. Linde is planning a follow-up survey in 2012 to assess the status of measures implemented thus far together with employee satisfaction levels.