German giant’s bonus after £ 1 billion bank loan
German chemicals giant BASF pays directors and staff € 360m bonus after borrowing £ 1bn from Bank of England
German chemicals giant BASF paid its directors and staff a bonus of 360 million euros (£ 312 million) after borrowing £ 1 billion from the Bank of England.
The £ 51 billion maker – which operates worldwide and at 11 locations in the UK, including factories in Bradford in West Yorkshire and Alfreton in Derbyshire – said part of the payment was based on a “recognition and appreciation” bonus.
In an optimistic statement on Friday, BASF also said it would pay its investors a final dividend of € 3 billion, the same as last year.
Boost: In an optimistic statement, BASF also said it will pay its investors a final dividend of € 3 billion – the same as last year
He said a “year-end rally” meant sales for the entire year exceeded expectations. However, the disruption earlier in the year meant that the underlying performance targets were not met, so the board changed the payout threshold by special resolution.
BASF’s Bank of England emergency loan, which is guaranteed by the Treasury, was the largest ever given to a company in the heat of the crisis. The Large Business Loans Program allowed foreign companies to apply if they had a physical presence in the UK.
Concerns about companies handing out bonuses and dividends while borrowing cheaply from the central bank prompted the Treasury to tighten rules on taxpayer-guaranteed loan agreements in May.
But loans from the Covid business finance mechanism taken out before that date, including the giant BASF debt, are not covered by the restrictions to reward executives or investors.
The Mail on Sunday revealed last month that Boots’ US owner gave billionaire boss Stefano Pessina a windfall of nearly £ 50million just days after the pharmacy giant withdrew £ 300million of the loan program.
Boots owner Walgreens Boots Alliance last month reported another dividend payment – his biggest quarterly payment ever – bringing the total paid during the crisis to over £ 1 billion.
BASF said it intended to repay its loan next month and stressed that it would not pay the exceptional bonus to staff and directors until May.
Asked about the ‘appreciation’ bonus, BASF said: “This year’s bonus payment is due to a discretionary decision of the Board of Directors in appreciation of the outstanding work of the BASF team around the world.”
BASF President Dr Martin Brudermüller said in a separate statement: “With this bonus, we want to recognize the enormous effort made by the BASF team during the 2020 pandemic year, which has been difficult for everybody.”
He said of the dividend: “A reliable dividend payment is a priority for us, even in difficult times.”