Reebok 2006 Annual Report Download - page 33

029
Corporate Governance Report ›
Compliance with German Corporate Governance Code
Our Executive and Supervisory Boards were regularly
informed on the latest developments in corporate governance
and the current aspects of good company management by our
Corporate Governance Officer. After in-depth discussion of rel-
evant matters, the Executive and Supervisory Boards issued an
updated Declaration of Compliance in accordance with § 161
of the German Stock Corporation Act on February 16, 2007,
according to which we comply with all new recommendations
introduced by the Government Commission in 2006. We also
comply with the majority of the Code’s non-binding sugges-
tions. A summary of the current Declaration of Compliance is
provided here, the full text version is available on our website at
www.adidas-Group.com/corporate_governance together with
all past Declarations of Compliance.
adidas AG has been and will continue to be in compliance with
all recommendations of the German Corporate Governance
Code dated June 12, 2006, with the following exceptions:
» The D&O liability insurance for our Executive and Super-
visory Board members does not include a deductible as this
is not common practice outside Germany. Furthermore, we
believe that it is not appropriate for our Group’s insurance
policy, which covers a large number of high-level executives
in Germany and abroad, to differentiate between Executive
and Supervisory Board members and other executives.
» The structure and level of the Executive Board compensa-
tion is reviewed and determined by the Supervisory Board’s
General Committee instead of the entire Supervisory Board.
The General Committee informs the Supervisory Board as
a whole on the respective results. This system has proven
successful over time.
» Stock options granted to the Executive Board within the
scope of the Management Share Option Plan (MSOP) do
not provide a possibility of a retroactive limitation (cap) for
extraordinary, unforeseen developments as all stock options
were granted before this Corporate Governance Code recom-
mendation was introduced in May 2003. However, should we
decide to initiate a new stock option plan in the future, we will
comply with this recommendation.
» Supervisory Board members are not subject to an age
limit as we believe that this would unnecessarily narrow the
rights of our shareholders and employees to elect their rep-
resentatives to the Supervisory Board.
» Supervisory Board compensation does not include a
variable component linked to the Group’s performance. We
believe this is essential to ensure the independent supervi-
sion required. Furthermore, there is no additional compen-
sation for membership in Supervisory Board committees. We
are, however, planning a new compensation structure, which
will incorporate the recommendations of the German Corpo-
rate Governance Code.
» Ownership of adidas AG shares or related financial instru-
ments by Executive and Supervisory Board members is
reported if it reaches, exceeds or falls below the applicable
notification thresholds provided in the German Securities
Trading Act and if adidas AG is notified of this fact. Since Ger-
man legislation has achieved increased transparency through
the revision of § 21 and § 25 of the German Securities Trading
Act, we also regard these thresholds as appropriate and suf-
ficient for adidas AG.
More Information about Corporate Governance
All documents related to corporate governance at adidas AG
are available on our website at www.adidas-Group.com/
corporate_governance.