Adidas 2003 Annual Report Download - page 114

SUPERVISORY BOARD REMUNERATION IN 2003 /// The
remuneration of the individual Supervisory Board members is
defined in § 18 of the adidas-Salomon Articles of Association,
resolved upon by our shareholders. Accordingly, each Super-
visory Board member receives fixed annual compensation (in
addition to reimbursement for out-of-pocket expenses) in the
amount of € 21,000. The Chairman receives € 42,000, and the
two Deputy Chairmen each receive compensation in the
amount of € 31,500, so that the total compensation paid to the
members of the Supervisory Board in 2003 was € 294,000.
Supervisory Board members who are members for a portion
of the year receive compensation on a pro rata basis. In order
to ensure their independent judgment, Supervisory Board
members receive solely fixed remuneration that is not linked
to the Group’s financial performance. Further, no additional
compensation is paid for chairmanship or membership of
Supervisory Board committees as we do not believe that it
would further improve the commitment to committee work.
In addition, we consider it to be a good compromise between
ensuring transparency and respecting privacy to state the
aggregate payments made for advisory and consultancy work
as well as the number of members rendering such work. In
2003, two members of the Supervisory Board received a total
of € 0.5 million for advisory services. No members of the
Supervisory Board were granted loans by adidas-Salomon
in 2003.
COMPLIANCE WITH THE GERMAN CORPORATE GOVER-
NANCE CODE /// Our corporate governance working group,
consisting of members of the Executive and Supervisory
Boards, examined the Code, the existing deviations from the
Code as well as the amendments made to the Code in May
2003. We decided to maintain the existing deviations that we
reported in the Declaration of Compliance of April 2003 and
not to follow all new recommendations of the Code as we
consider some of them to be inappropriate for our Group. For
instance, we will continue to dispense with an age limit for
our Board members as we believe it would narrow the rights
of the shareholders to elect their representatives to the Super-
visory Board. Likewise, it could potentially restrict the Super-
visory Board in its responsibility to appoint the best qualified
candidates to the Executive Board. Additionally, alongside the
fact that a deductible is not common outside Germany, we do
not regard D&O liability insurance with a deductible for Board
members as appropriate, since adidas-Salomon senior man-
agers, both in and outside Germany, are covered by a Group
insurance policy. It does not seem appropriate to differentiate
between Board members and other high-level personnel. In
light of the amendments made to the Code in May 2003, the
Executive and Supervisory Boards issued an updated Declara-
tion of Compliance on February 10, 2004.
2004 DECLARATION OF COMPLIANCE /// The Executive Board
and the Supervisory Board of adidas-Salomon AG issued the
previous Declaration of Compliance in accordance with § 161
of the German Stock Corporation Act on April 7, 2003. During
the period between April 7, 2003 and May 21, 2003, the date of
publication of the amendments of the German Corporate
Governance Code, adidas-Salomon AG has complied with all
recommendations of the “Government Commission German
Corporate Governance Code” with the exceptions stated
below. Since May 21, 2003, the Corporation has complied with
the German Corporate Governance Code with the additional
and respectively marked exceptions:
>adidas-Salomon’s D&O liability insurance does not include
a deductible for Executive Board and Supervisory Board
members (Article 3.8).
>Compensation of Executive Board members is reported in
total (Article 4.2.4).1)
>Stock options granted to Executive Board members in
connection with the management stock option plan (MSOP)
do not provide a possibility of limitation (cap) for extraordi-
nary, unforeseeable developments. The compensation
report does not include information on the value of stock
options (Article 4.2.3).1)
>adidas-Salomon does not specify age limits for Executive
Board members and Supervisory Board members (Articles
5.1.2 and 5.4.1).
>The compensation of the Supervisory Board members
consists only of a fixed compensation component and does
not consider the membership in Supervisory Board com-
mittees. Compensation paid to the members of the Super-
visory Board for advisory or agency services rendered is
reported in total (Article 5.4.5).
110 REPORTING CORPORATE GOVERNANCE /// CORPORATE GOVERNANCE OVERVIEW