Reebok 2008 Annual Report Download - page 33

adidas Group Annual Report 2008 029
Recommendations and suggestions of the German Corporate Governance Code
fulfi lled to a large extent
In the year under review, the Executive Board and Supervisory Board were informed regularly by
our Corporate Governance Offi cer on the latest corporate governance developments and devoted
particular attention to fulfi lling the provisions of the German Corporate Governance Code (Code),
especially the latest provisions of June 6, 2008. As a result of these consultations, the Executive
Board and Supervisory Board issued an updated Declaration of Compliance on February 11, 2009,
pursuant to § 161 of the German Stock Corporation Act (Aktiengesetz – AktG). The exact wording
together with all past Declarations of Compliance can be found at and downloaded from www.
adidas-Group.com /corpor ate_gover nance.
Until August 8, 2008, the Declaration refers to the Code as amended on June 14, 2007 and subse-
quently to the Code as currently applicable. All recommendations of the Code have been and are
fulfi lled to a large extent. We deviate from the recommendations with regard to a few points only:
— Section 3.8 of the Code recommends including an appropriate deductible in the directors’
and offi cers’ (D&O) liability insurance concluded by the company for the Executive Board and
Supervisory Board. The D&O liability insurance policy for our Executive Board and Super visory
Board members does not provide for a deductible as this is not common practice outside of
Germany. In addition, it is a group insurance for a large number of executives in Germany and
abroad for which a differentiation between Executive Board and Supervisory Board members
and other executives does not seem appropriate.
— Section 4.2.3 of the Code recommends that a severance payment cap for the premature
termination of the contract without serious cause be agreed when concluding employment
contracts with the Executive Board. The contracts that are currently to be newly concluded do
not provide for a formal severance payment cap due to the three-year term of the contract. We
believe that the contract term agreed already offers suffi cient protection from inappropriate
severance payments.
— Section 5.4.1 of the Code recommends setting an age limit for Supervisory Board members.
We do not set an age limit for Supervisory Board members as this is, in our opinion, an unneces-
sary limitation of the rights of our shareholders and employees when electing their representa-
tives to the Supervisory Board.
— Section 5.4.6 of the Code recommends that Supervisory Board members receive performance-
oriented compensation in addition to their fi xed compensation. The members of our Supervisory
Board do not receive any performance-oriented compensation in order to allow for the inde-
pendent supervisory functions of the Supervisory Board.
Our Executive Board and Supervisory Board have decided to comment not only on the deviations
from the recommendations of the Code but, in addition, also on the non-binding suggestions.
At present, adidas AG complies with the suggestions of the Code with one exception: Pursuant
to section 3.6 of the Code, Supervisory Board meetings should be prepared separately by the
Supervisory Board members representing the shareholders and by those representing the
employees. The members of our Supervisory Board do not meet for such preparation meetings
as standard practice but only if required.
More information on corporate governance
All adidas AG corporate governance documents are available on our website at www. adidas-
Group.com /cor porate_ governance.