Reebok 2014 Annual Report Download - page 32

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Compensation Report
To Our Shareholders
adidas Group
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2014 Annual Report
Compensation Report
The Compensation Report outlines the principles of the compensation system and the
level of Executive Board and Supervisory Board compensation in accordance with the
legal requirements and the recommendations of the German Corporate Governance
Code (the ‘Code’) as amended on June 24, 2014. For the adidas Group, transparent and
comprehensible reporting on the compensation of the Executive Board and Supervisory
Board is an essential element of good corporate governance.
Compensation system for the Executive Board
Following preparation by the Supervisory Board’s General Committee, the compensation system
for our Executive Board and the total compensation of each member of the Executive Board
is determined and regularly reviewed by the entire Supervisory Board. The compensation and
personnel topics dealt with by the Supervisory Board and General Committee for the year under
review are described in the Supervisory Board Report.
The compensation system is geared towards creating an incentive for successful, sustainably
value-oriented corporate development and management. In determining the Executive Board
members’ compensation particularly in terms of its appropriateness, such factors as the size
and global orientation, the economic situation, the success and outlook of the company are taken
into consideration, as well as the common level of the compensation in comparison with peer
companies and with the compensation structure applicable for other areas of the company. To this
end, the relation between the Executive Board compensation and that of senior management and
employees overall is taken into account, also in terms of its development over time. In addition,
the tasks and contribution of each Executive Board member to the company’s success, their
individual performance as well as the overall performance of the Executive Board are considered
when determining the compensation of the Executive Board. It aims to appropriately remunerate
exceptional performance, while diminishing variable compensation when targets are not met. Thus,
in the Supervisory Board’s opinion, an appropriate level of compensation can be ensured.
The compensation system for the members of the Executive Board which has been applicable since
the 2012 financial year was adopted by a large majority at the Annual General Meeting on May 10,
2012.
In 2014, a review of the compensation system was conducted by an independent external
compensation expert. The review came to the conclusion that the compensation system meets the
requirements of the German Stock Corporation Act (Aktiengesetz – AktG) and the recommendations
of the German Corporate Governance Code.
Components of the Executive Board compensation
The total compensation of the Executive Board members – in the case of 100% target achievement – is
made up of around one-third fixed compensation and two-thirds variable, i.e. performance-related
compensation components:
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The fixed compensation consists of the annual fixed salary, which is based on the tasks and
responsibilities of the individual Executive Board member. It is paid in twelve equal monthly
instalments and basically remains unchanged for three years during the term of the service
contract.
see Supervisory Board Report, p. 14
1) This Compensation Report is a component of the
Group Management Report and is also part of
the Corporate Governance Report including the
Declaration on Corporate Governance.
1)