Reebok 2014 Annual Report Download - page 20

16
2014
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01.4
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Supervisory Board Report
To Our Shareholders
adidas Group
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2014 Annual Report
Transactions requiring Supervisory Board approval
In accordance with statutory regulations and the Rules of Procedure of the Supervisory Board, certain transactions and
measures require a formal resolution or the prior approval of the Supervisory Board.
In the context of this requirement, at our meetings in January and February, we discussed in detail the Group’s warehouse
infrastructure and the development of logistics and warehouse costs. In the interest of optimising profitability, we approved
the purchase of the strategically important distribution centre in Spartanburg/South Carolina, USA, which had previously been
leased. At our meeting in March, following detailed discussions, we resolved upon the resolutions to be proposed to the 2014
Annual General Meeting, including the proposal regarding the appropriation of retained earnings for the 2013 financial year
and the candidates for election as shareholder representatives on the Supervisory Board. Another topic of this meeting was the
resolution on the 2014 Budget and Investment Plan presented by the Executive Board.
Composition of the Executive Board
In the year under review, we took important decisions concerning changes on the Executive Board. At our extraordinary
meeting held in January, we dealt with the request of our long-standing Executive Board member Erich Stamminger to release
him from his duties as Executive Board member effective March 5, 2014. After due consideration within the Supervisory Board
as a whole, we approved the termination of his appointment by mutual consent and the termination agreement pertaining to his
Executive Board service contract. As his successor, we appointed Eric Liedtke as member of the Executive Board responsible
for Global Brands effective March 6, 2014 and resolved on the terms of his Executive Board service contract. At our meetings
in March and May, we extensively discussed and resolved to extend the Executive Board mandates and service contracts of
Herbert Hainer, Glenn Bennett and Robin J. Stalker.
With these personnel decisions, the Supervisory Board acknowledges the Executive Board’s performance and strives for
continuity. Notwithstanding the above, in November the members of the General Committee discussed, inter alia, the matter of
long-term succession planning for the Executive Board.
Executive Board compensation
In addition to the financial conditions of the Executive Board service contracts, we dealt at our January meeting with waiving
the competition prohibition that had been agreed with Erich Stamminger and approved the respective contracts. Key topics of
our meeting in February were the approval of the contractual conditions concerning Erich Stamminger’s departure as well as
the in-depth discussion of the performance of the Executive Board members in the year under review, and we resolved upon
the 2013 Performance Bonuses to be granted to them. As required by the German Corporate Governance Code (the ‘Code’),
we examined the appropriateness of Executive Board compensation and, in this context, considered Executive Board target
compensation in relation to the compensation of senior management and employees overall. In consideration of this aspect,
at our meeting in March we comprehensively discussed the targets and key criteria for the 2014 Performance Bonus together
with the individual Performance Bonus target amount determined for each Executive Board member, as well as the adjustment
of Herbert Hainer’s Executive Board service contract, and resolved thereon.
In line with the Code, we commissioned an independent external compensation expert to review the Executive Board
compensation system and the appropriateness of Executive Board compensation. The review found that the compensation
structure is oriented towards sustainable development of the company and that it meets statutory requirements as well as
those of the Code. A comparison with other companies regarding the compensation of individual Executive Board members’
target compensation, however, found that there is a need for action especially concerning the pension benefits granted
to Executive Board members, and that there is room for a moderate increase in the future in order to ensure competitive
compensation. At the meetings of the General Committee and of the Supervisory Board as a whole in May and August, the
members of the Supervisory Board considered in detail the results of the review of Executive Board compensation and
agreed with the assessment of the compensation expert. The Supervisory Board already took the findings of the review into
consideration in its resolutions in August relating to the extension of Glenn Bennett’s and Robin J. Stalker’s Executive Board
service contracts and their pension benefits.