Reebok 2006 Annual Report Download - page 72

› Structure and StrategyGroup Management Report ›
068 ANNUAL REPORT 2006 › adidas Group ›
Performance at Core of Remuneration System
Our Global Salary Management System sets employees’
salaries in a clear, understandable and measurable way. It
relates to performance evaluation and uses a clearly defined
system for setting salaries in line with market requirements
and performance levels. Managers and the HR department
can evaluate where each employee currently is within the sys-
tem based on his/her current salary and where he/she should
be. We also offer various attractive variable compensation
components:
» Pay for Performance bonus program: More than 20% of
all employees receive this variable salary component with an
average of 20% of their remuneration linked directly to indi-
vidual and Group performance.
» Long-Term Incentive Programs (LTIP): These include
brand- or business-specific three-year plans for senior man-
agers that are based on the achievement of financial as well
as compliance targets (see Compensation Report, p. 30).
» Management Share Option Plan (MSOP): Beneficiaries
of the MSOP (members of Executive Board and senior man-
agement) may exercise stock options granted to them in five
tranches since 1999 if at least one of two performance criteria
is met (see Note 33, p. 178).
» Other benefits include our 401-K pension plans in the USA
and the PP 2000 pension plan for our employees in Germany.
In 2006, 1,154 employees participated in the latter, which rep-
resents an increase of 7% compared to the previous year.
Successful Retention Efforts
To ensure we retain our key employees, we strive to have a
happy, highly-motivated workforce. We offer our employees
a challenging, fun and financially rewarding working envi-
ronment, where fair competition and a responsible attitude
towards the environment and our internal and external busi-
ness relationships are encouraged. Through our Work-Life
Balance Program we aim to harmonize the Group’s com-
mercial interests with the private and family needs of our
employees, because we are convinced that every employee’s
quality of life should be improved by working for the adidas
Group. This program includes family-oriented services, flex-
ible work time and place, people development and leadership
competence related to work-life balance. Additionally, we
offer our employees a wide range of sports activities at our
major sites.
Significant Progress in Reebok Integration
Bringing together colleagues from Reebok and the adidas
Group, managing the change process, ensuring a fair and
transparent appointment process for the leadership positions
in the new Group and harmonizing people and performance
management-related topics were major focus points in 2006.
We completed an extensive appointment process (over 1,000
new appointments) partnering with an external consultant to
assure fairness and consistency. In addition, we have aligned
our Human Resources systems and enabled Reebok employ-
ees to participate in the Group’s personnel development pro-
grams, giving them access to a wider range of career oppor-
tunities. Our regular “pulse check” that measures employee
alignment and engagement in the integration process under-
scores that our employees are growing together in an environ-
ment of trust, willingness to change and passion to perform.
Managers Ensure Compliance with Code of Conduct
In 2006, a multi-cultural team from various functions and
geographies within the Group developed and established
our new Global Code of Conduct (see Corporate Governance
Report, p. 26). All managers with personnel responsibility
are now accountable to ensure compliance with the Code.
Employees who violate the law or the Code of Conduct while
conducting Group business will be subject to disciplinary
measures up to and including termination of employment.