Reebok 2014 Annual Report Download - page 34

30
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 LTIP Bonus serves – in line with sustainability-oriented corporate planning – as compensation
for the long-term performance of the Executive Board based on the Long-Term Incentive
Plan 2012/2014 (LTIP 2012/2014) measured over a three-year period. It is determined by the
Supervisory Board in a two-stage process:
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In determining the LTIP 2012/2014 at the beginning of the 2012 financial year, the Supervisory
Board defined the performance criteria, linked to clear targets and oriented towards the
sustainable growth of the company, and also defined the individual amount of the LTIP Bonus
target amount for each Executive Board member, based on a target achievement of 100%
(LTIP target amount).
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At the end of the 2014 financial year, the Supervisory Board examined the precise target
achievement of each Executive Board member and determined the amount of Performance
Bonus to be paid, depending on the degree of actual target achievement. Payout will be
effected after the 2014 consolidated financial statements are approved.
The Supervisory Board determined the following performance criteria for the LTIP 2012/2014:
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increase in net income attributable to shareholders,
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increase in operating free cash flow,
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increase in adidas NEO Label sales, and
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development of the adidas AG share price.
In calculating the amount of the LTIP 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 development of the individual performance criteria over
the three-year period from 2012 to 2014 is decisive for the assessment of target achievement.
The sum of the weighted degrees of target achievement of the performance criteria is multiplied
by the individual LTIP target amount for each Executive Board member.
For the ultimate evaluation of the Executive Board’s performance, qualitative criteria determined
by the Supervisory Board when establishing the LTIP 2012/2014 were taken into account, such as
developing an HR reporting system in alignment with GRI (Global Reporting Initiative) guidelines.
The LTIP Bonus is capped at a maximum of 150% of the individual LTIP target amount. If the
overall degree of target achievement lies at or below 50%, the Executive Board member is not
entitled to the LTIP Bonus. If an Executive Board member takes or leaves office during the term of
the LTIP 2012/2014, the LTIP Bonus is calculated on a pro rata basis. There is no claim to payout
if an Executive Board member resigns from office or voluntarily terminates his employment
relationship during the term of the LTIP 2012/2014, nor in the event of termination of the service
contract by the company.
A compensation component resulting from a management share option plan does not exist and is not
planned. The development of the adidas AG share, however, provides one of the four performance
criteria for the LTIP 2012/2014.