Other benefits and additional commitments
The Executive Board members receive other minor benefits which are individually taxed as required. These may include, for example, entertainment expenses, contributions to pension insurance as well as non-monetary benefits resulting from the provision of a company car. They do 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.
Pension commitments
All members of the Executive Board have individual contractual pension commitments which essentially include the following provisions:
The pensions which our active Executive Board members receive upon reaching the age of 65 are based on a percentage of their individual pensionable income. This currently equals the individual fixed annual salary stated in the table. Starting from a base amount totalling 10% of the pensionable income, a module of 2% of the pensionable income is formed for each full year of tenure as an Executive Board member. The pension payable to an Executive Board member can reach a maximum level of 40% of the pensionable income.
Herbert Hainer and Erich Stamminger, who belonged to the group of senior executives of adidas AG prior to their Executive Board appointments, will at the time of their retirement receive additional payments from the “Supplementary Retirement Provisions for Senior Executives”. Until their appointment as Executive Board members, adidas AG had contributed pension components for Herbert Hainer and Erich Stamminger under these supplementary provisions which were introduced for all senior executives of the company in 1989.
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.
Survivor's benefits provide a pension for the spouse or partner amounting to 50% of the pension entitlements up to this point, and 15% or 30% for each dependent child as half-orphan or orphan; it amounts to a maximum of 100% of the pension entitlements. If an Executive Board member dies during the term of his service contract, his spouse or partner 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.
In the event of the retirement of an Executive Baord member prior to reaching the retirement age, the non-forfeiture of the pension entitlement will be in line with legal provisions.
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.
Commitments to Executive Board members upon premature termination of tenure
Executive Board service contracts are usually agreed with a contractual term of three years. This term will be shortened accordingly if the Executive Board member reaches the age of 65 prior to expiration. In the case of premature termination of tenure by mutual consent and without good cause, the following shall apply:
The Executive Board members Glenn Bennett, Robin J. Stalker and Erich Stamminger each receive a compensatory payment in the amount of the payment claims for the remaining period of service contract. Due to the relatively short contractual terms of up to three years, a severance payment cap is not provided.
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, limited to payment claims for the remaining period of his service contract (Severance Payment Cap). In this respect, the overall annual compensation means the overall compensation paid to the Executive Board member, as outlined in the compensation report, for the last full financial year prior to resignation from the Executive Board while considering the expected total compensation for the current financial year. If Herbert Hainer's service contract is terminated due to a change of control, a possible severance payment is limited to 150% of the Severance Payment Cap.
In case of regular termination of the service contract, i.e. in the 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 Performance 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.
Payments to former members of the Executive Board and their surviving dependants
In 2012, pension payments to former Executive Board members or to their surviving dependants amounted to € 3.336 million (2011: € 3.261 million). As at December 31, 2012, the provisions for pension entitlements of this group of persons totalled € 50.826 million (2011: € 46.150 million). The dynamisation of the pension payments to former Executive Board members is made in accordance with statutory regulations or regulations under collective agreements unless a surplus from the pension fund for former Executive Board members is used after the commencement of retirement for an increase in retirement benefits.