20 Giants! Summary of 2024 Financial Results from Global Chemical Industry Leaders

As of March 1, global chemical industry giants have released their 2024 financial results—including BASF, Dow, Covestro, Arkema, DuPont, Huntsman, Lanxess, Celanese, Syensqo, Trinseo, INEOS, Honeywell, Clariant, Eastman, SABIC, Chemours, LyondellBasell, ExxonMobil, LG Chem, and Avient—totaling 20 companies. Given market conditions in 2024, several giants announced a series of cost-reduction measures. Specifically: BASF On February 28, BASF published its full-year 2024 results. Total sales amounted to €65.3 billion (approx. RMB 49.649 billion), down €3.6 billion year-on-year from €68.9 billion in 2023. EBITDA stood at €6.7 billion, a decrease of €500 million compared to €7.2 billion in 2023; EBIT was €2.0 billion, down €206 million year-on-year; net income reached €1.3 billion, significantly exceeding €225 million in 2023. By the end of 2024, BASF had incurred approximately €900 million in one-time costs related to its cost-savings program. Dow On January 30, Dow Inc. released its latest financial report: full-year 2024 net sales totaled $43.0 billion, down $1.6 billion from $44.6 billion in 2023; GAAP net income was $1.2 billion, up from $660 million in 2023; operating EBIT was $2.6 billion, down from $2.8 billion in 2023. Operating cash flow from continuing operations amounted to $2.9 billion, lower than $5.2 billion in 2023. The report indicated that Dow is implementing measures to cut costs by $1 billion, including eliminating 1,500 positions globally. Covestro On February 26, Covestro released its fiscal 2024 results: sales declined 1.4% to €14.2 billion (€14.4 billion in the prior year), primarily due to lower selling prices; EBITDA remained stable, dipping only 0.8% to €1.1 billion—broadly in line with expectations; net profit was -€266 million (vs. -€198 million in the prior year); free operating cash flow stood at €89 million (vs. €232 million in the prior year). In Q4 2024 alone, Covestro’s sales rose 0.9% year-on-year to approx. €3.4 billion; EBITDA surged 44.7% year-on-year to €191 million; free operating cash flow jumped 246.6% year-on-year to €253 million. Arkema On February 28, Arkema released its full-year 2024 results: sales totaled €9.5 billion, stable year-on-year; volume increased by 2.4%, driven by growth in Asia’s specialty materials business. EBITDA reached €1.532 billion, with an EBITDA margin of 16.1%, slightly up year-on-year. Recently, Arkema has invested in several major growth initiatives—including acquiring PIAM’s polyimide business, acquiring Ashland’s and Dow’s adhesives businesses, and adding new capacity within its Advanced Materials division—to serve attractive markets such as bio-based consumer goods, new energy, electrification, 3D printing, and sports.

Must-Read for Founders: The Optimal Equity Incentive Model—Deferred Payment

Income earned by grantees under a deferred payment plan consists of two components. For example, suppose a manager achieves the performance target for variable (risk-based) compensation and receives a stock award of 100,000 shares, priced at €10 per share—yielding a notional value of €1 million—payable after a five-year deferral period. Five years later, the manager’s actual gain comprises two parts: (1) the market value of those 100,000 shares at the time of payout; and (2) any appreciation in the company’s stock price over the five-year period. Specifically, if the share price rises to €15 after five years, the manager’s total gain equals €1 million + €500,000 = €1.5 million; conversely, if the share price falls, the manager incurs a corresponding loss (e.g., €500,000). Thus, deferred payment plans exhibit the following characteristics: • Balanced Incentive and Constraint: Aligns the grantee’s interests tightly with those of shareholders and the company. • Stronger Constraint Than Stock Options: Under stock options, if the share price declines, the grantee may simply forfeit the option—suffering only the opportunity cost. Under deferred payment, however, any decline in share price directly reduces the grantee’s realized gain; only sustained effort to improve corporate performance—and thereby prevent share price erosion—can safeguard the grantee’s interests. • Longer Lock-Up Period: Deferred payment periods are typically set at five years in China, and sometimes extend to retirement age in the U.S.—effectively curbing short-term managerial behavior. • Milder Incentive Strength Compared to Stock Options: Since awards are granted in shares payable only upon deferral, the number of shares awarded tends to be relatively modest, resulting in comparatively weaker incentive intensity. • Broad Applicability: Deferred payment can serve as a flexible design principle—readily combinable with other equity incentive models to create hybrid or customized schemes. 【Case Analysis】E Company’s Deferred Payment Plan E Company is an A-share listed enterprise in China. Its board of directors designed the following executive compensation structure: base salary + annual bonus + risk-based income. Base salary is determined annually by the board based on the prior year’s operational performance and paid monthly in cash. The annual bonus is paid in a single cash disbursement upon achievement of pre-defined annual bonus targets. Risk-based income refers to an additional performance tier above the annual bonus target: once executives meet this higher threshold, they receive further incentives—30% in immediate cash and 70% in company stock payable via deferred payment. Whether E Company’s executives ultimately receive risk-based income depends on their degree of achievement against the pre-set risk-income target: • A minimum performance threshold of 70% of the target applies—if performance falls below this level, no risk-based income is awarded, and previously accrued deferred stock awards are forfeited. • If performance reaches 70–100% of the target, executives receive a proportionate share of the risk-based income—for instance, achieving 75% of a €1 million target yields €750,000 in risk-based income. • If performance exceeds the target, executives receive 120% of the target amount—i.e., €1.2 million for a €1 million target.

Eastman Chemical Director Linnie M. Haynesworth Acquires 480 Phantom Stock Units via Deferred Compensation Plan

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Eastman Chemical Co director Linnie M. Haynesworth acquired 480 phantom stock units through the Directors' Deferred Compensation Plan on October 7, 2026, increasing her total beneficial ownership to 6,405 units.

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