Reebok 2011 Annual Report Download - page 56

adidas Group
2011 Annual Report
TO OUR SHAREHOLDERS
52
2011
01.7 Compensation Report
01.7
pensionable income. Pension payment commences upon reaching
the age of 65. In the case of occupational disability, or of survivor’s
benefits in case of death, different provisions apply.
– In the event of occupational disability of an Executive Board
member prior to reaching the retirement age, he receives a
disability pension amounting to the pension entitlements achieved
up to this point.
– If an Executive Board member dies during the term of his service
contract or after reaching retirement age, survivor’s benefits
provide a pension for his spouse amounting to 50% of the pension
entitlements, and a half-orphan’s pension of 15% or an orphan’s
pension of 30% for each dependent child. Total survivor’s benefits
amount to a maximum of 100% of the pension entitlements. If
an Executive Board member dies during the term of his service
contract, his spouse receives or, alternatively, any dependent
children additionally receive the pro-rata annual fixed salary for
the month of death and the following three months but no longer
than until the agreed end date of the service contract.
From the second year of pension payments, the current pension
payments will increase on the anniversary of the initial pension
payment by at least 1% of the amount of the prior year pension and
additionally by any income from the pension trust fund allocable to
the respective Executive Board member.
In the event that an Executive Board member leaves the company
prior to reaching the retirement age, the non-forfeiture of the
pension entitlement will be in line with the legal provisions.
– Commitments to Executive Board members upon premature
termination of tenure
In the case of premature termination of tenure by mutual consent
and without good cause, the service contracts of Glenn Bennett,
Robin J. Stalker and Erich Stamminger do not provide for severance
payment caps due to the relatively short contractual terms of up to
three years; i.e. a compensatory payment is made in the amount of
the payment claims for the remaining period of the service contract.
The service contract of Herbert Hainer, on the other hand, which
has a contractual term of more than three years, does provide for
a severance payment of a maximum of twice the overall annual
compensation (Severance Payment Cap), limited to payment claims
for the remaining period of his service contract. In this respect,
the overall annual compensation means the overall compensation
paid to him, as outlined in the compensation report, for the last
full financial year prior to his resignation from the Executive Board
while considering the expected total compensation for the current
financial year. If the service contract is terminated due to a change
of control, a possible severance payment is limited to 150% of the
Severance Payment Cap.
– Commitments to Executive Board members upon regular
termination of tenure
In case of regular termination of the service contract, i.e. in case of
non-renewal of the service contract or termination due to reaching
retirement age, the respective Executive Board member is entitled
to a follow-up bonus as individually agreed. This bonus amounts
to 75% for Glenn Bennett, 100% for Robin J. Stalker, and 125%
each for Herbert Hainer and Erich Stamminger and is based on
the Perform ance Bonus granted to the respective Executive Board
member for the last full financial year. The follow-up bonus is
payable in two tranches, 12 and 24 months following the end of the
contract.
Other benefits and additional commitments to the
Executive Board
– Except for the other benefits listed in the table, the Executive Board
members did not receive any additional payments.
– The Executive Board members did not receive any additional
compensation for mandates within the adidas Group.
– The Executive Board members did not receive any loans or advance
payments from adidas AG.
– adidas AG maintains a consequential loss and liability insurance
for Board members of the adidas Group (D&O Insurance). It covers
the personal liability in the event of claims raised against Executive
Board members for indemnification of losses incurred in connection
with their acts and omissions. For cases of damage occurring
as of July 1, 2010, there is a deductible in accordance with the
statutory provisions and recommendations of the German Corporate
Governance Code. This deductible amounts to 10% of the damage up
to a maximum of one and a half times the fixed annual salary for all
cases of damage within one financial year.
Payments to former members of the Executive Board and
their surviving dependants
In 2011, pension payments to former Executive Board members or
to their surviving dependants amounted to € 3.261 million (2010:
€ 3.235 million). As at December 31, 2011, the provisions for pension
entitlements of this group of persons totalled € 46.150 million (2010:
€ 45.884 million). The dynamisation of the pension payments is
made in accordance with statutory regulations or regulations under
collective agreements unless a surplus from the pension fund is used
after the commencement of retirement for an increase in retirement
benefits.