Reebok 2014 Annual Report Download - page 33

29
2014
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01.6
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Compensation Report
To Our Shareholders
adidas Group
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2014 Annual Report
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The variable, performance-related compensation consists of the following two components:
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the Performance Bonus measured over a one-year period and
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the LTIP Bonus, which is based on on the Long-Term Incentive Plan 2012/2014 (LTIP
2012/2014) measured over a three-year period, as a compensation component with long-term
incentive effect.
The variable compensation components are designed in such a way that the incentive to achieve the
decisive long-term targets set by the LTIP is significantly higher than the incentive to achieve the
targets decisive for being granted the Performance Bonus. Corresponding contractual regulations
ensure that this weighting will also be maintained in the future. More than 50% of the variable target
compensation component is based upon multi-year performance criteria.
The variable components are structured as follows:
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The Performance Bonus serves as compensation for the Executive Board’s performance in the
past financial year in line with the short-term development of the company. It is determined by
the Supervisory Board in a two-stage process:
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At the beginning of the financial year, the Supervisory Board establishes the differently
weighted performance criteria with their respective clear targets, and determines the
individual amount of the Performance Bonus target amount for each member of the Executive
Board, based on a target achievement of 100% (Bonus target amount).
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At the end of the financial year, the Supervisory Board examines the precise target achievement
of each Executive Board member and determines the amount of Performance Bonus to be
paid, depending on the degree of actual target achievement. The bonus is payable following
approval of the consolidated financial statements of the past financial year.
As criteria for the 2014 Performance Bonus the Supervisory Board established, in addition to the
individual performance of the Executive Board member, the following business-related criteria
(performance criteria):
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increase in currency-neutral net sales
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improvement of operating working capital
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improvement of the operating margin in the Retail segment.
In calculating the amount of the Performance Bonus, the degree of target achievement
determined for each individual performance criterion is weighted according to the percentage
value of the respective performance criterion. The sum of the weighted degrees of target
achievement of the performance criteria is then multiplied by the individual Bonus target amount
for each Executive Board member. The Performance Bonus is capped at a maximum of 150% of
the individual Bonus target amount. If an Executive Board member takes or leaves office during
a financial year, the Performance Bonus is calculated on a pro rata basis.