Reebok 2014 Annual Report Download - page 40

36
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
As a variable compensation component with long-term incentive effect, our Executive Board will be
granted a new Long-Term Incentive Plan, also covering a three-year period, as of the 2015 financial
year.
Payments to former members of the Executive Board and their surviving
dependants
In 2014, pension payments to former Executive Board members or to their surviving dependants
amounted to € 3.458 million (2013: € 3.421 million). As at December 31, 2014, the provisions for
pension entitlements of this group of persons totalled € 45.900 million (2013: € 41.454 million). The
increase can mainly be attributed to a lowering of the underlying interest rate from 3.7% to 2.1%.
There are further pension commitments towards three former Executive Board members
who resigned after December 31, 2005, which are covered by a pension fund or a pension fund
in combination with a reinsured pension trust fund. From this, indirect obligations amounting
to € 13.576 million (prior year: € 6.859 million) arise for adidas AG, for which no accruals were
established due to financing through the pension fund and pension trust fund. This increase is
attributable to the resignation of Erich Stamminger and a lowering of the underlying interest rate.
The dynamisation of the pensions paid to former Executive Board members is effected in accordance
with statutory regulations or regulations under collective agreements, unless a surplus from the
pension fund is used for an increase in pension benefits after pension payments have already begun.
Review of Executive Board compensation
In 2014, the Supervisory Board had the Executive Board compensation system reviewed with regard
to appropriateness by an independent external compensation expert. In doing so, the individual
overall target annual compensation of the Executive Board members was examined in detail. The
review found that the compensation meets the requirements of the German Stock Corporation Act,
but that, compared to other companies, there is a need for action especially concerning the pension
plans of the Executive Board members and that there is therefore room for a moderate increase, in
order to thus ensure competitive compensation.
Compensation of the Supervisory Board
The compensation of the Supervisory Board members is regulated by § 18 of the company’s
Articles of Association and is linked to the size of the company and to the responsibility and scope
of activities of the Supervisory Board members. After the end of the respective financial year,
the members receive a fixed compensation amount for their function as well as compensation
for the chairmanship of or membership in committees, in accordance with the Code. Variable
compensation is not granted in addition. Supervisory Board members who have not been members
of the Supervisory Board for the entire financial year receive a pro-rated amount of compensation.
For the 2014 financial year, each individual member of the Supervisory Board received € 40,000 as
fixed annual compensation; three times this amount was paid to the Chairman of the Supervisory
Board and twice this amount was paid to each Deputy Chairperson. Members of the General
Committee and of the Finance and Investment Committee received additional compensation of
€ 20,000 and members of the Audit Committee received additional compensation of € 40,000. In
addition to the fixed compensation, the Chairman of the General Committee and of the Finance