We believe it is crucial for the success of our company to have a diverse workforce comprised of individuals with different ideas, strengths, interests and cultural backgrounds. We see a great benefit in the diversity of our employees, as this helps us to better fulfill the wishes and multi-faceted demands of our consumers around the world. All our employees are appreciated – regardless of gender, nationality, ethnic origin, religion, world view, disability, age, sexual orientation or identity.
At our company’s headquarters in Herzogenaurach, Germany, we have
portfolio of internal and external activities as well as memberships. Throughout the company we continue to support our Employee Resource Groups – specific networks that give employees from various walks of life a voice. We have women’s networks in North America, Latin America, Europe and Asia, LGBTQ networks in North America and Europe as well as a network to connect people with different ethnic backgrounds in North America, and an experienced generation network in Europe.
The Executive Board and senior management teams are provided with quarterly diversity reporting to support decision making and target setting, and we continue to invest in diversity and gender intelligence training across the organization.
In 2018, functional and local market teams continued to develop dedicated action plans to invest in a stronger female talent pipeline, data analysis on gender balance and a more balanced organization in terms of gender, age and origin. As an example, Latin America saw a notable increase in the female leadership ratio throughout the year as a result of intensified efforts in driving a set of initiatives. This included a significant increase in the number of employees receiving gender intelligence training, the initiation of senior leadership mentoring with a balanced 50:50 ratio, as well as the launch of ‘Lean In’ learning circles, a concept and reference tied to our partnership with the 'Lean In' organization.
To inspire action outside of our company, we are active members in both ‘Charta der Vielfalt’ (‘Diversity Charter’) and the Diversity and Inclusion in Asia Network (DIAN), that allow us to promote communication and the sharing of best practices and insights. adidas is also listed in the genderdax Nationalities at
HQ in Germany
ADIDASANNUAL REPORT 2018
083
Gender intelligence training
We continued the delivery of our global ‘BIG Deal’ gender intelligence training, with 300 senior managers upskilled in 2018, resulting in a total of over 600 employees since the launch of the training in 2016. ‘BIG’ stands for Balanced, Inclusive, Gender Intelligent, and is a one-day workshop designed to give participants new insights and practical tools that support them in building an inclusive company culture.
Participants are challenged to re-visit and think critically about some of their key thoughts and beliefs around diversity, stereotyping and bias in the workplace. BIG Deal training will become part of the Director Development Experience.
Moreover, we have made the move to internalize the delivery of the BIG Deal training with a Train the Trainer program to increase the roll-out speed and scope. Thus far, a total of almost 30 internal facilitators have been upskilled – with training delivered to around 900 colleagues in North America in 2018. Our headquarter-based facilitators in Germany will initiate delivery of BIG Deal training in 2019.
Mixed leadership teams
At adidas, we believe in mixed leadership teams as a competitive advantage and driver of success. A prerequisite for increasing the number of women at the highest levels of management is the general promotion of women within the company worldwide at all levels of management. We have various initiatives in place, e.g. with members of the Executive Board agreeing to mentor female talents as well as an equal gender split in our Global High Potential program to guarantee that our succession pipeline is balanced. In addition, our women’s network is also working on mentoring circles to foster the professional development of junior colleagues.
Already in 2011, adidas proactively set itself the goal of increasing the number of women in management positions globally. By the end of 2018, the company had recorded a
total of 33% of women globally in management positions (2017: 31%), exceeding the 2020 target of 32%.
↗ ADIDAS-GROUP.COM/S/EMPLOYEES Pursuant to the German ‘Law on Equal Participation of Women and Men in Leadership Positions in the Private and Public Sector’, the adidas AG Supervisory Board determined target figures for the percentage of female representation on the Executive Board, including corresponding deadlines for their achievement, and the Executive Board determined such target figures for the first two management levels below the Executive Board, including deadlines for their achievement, for adidas AG.
SEE CORPORATE GOVERNANCE REPORT INCLUDING THE DECLARATION ON CORPORATE GOVERNANCE, P. 35
CULTURE
It is our goal to develop a culture that cherishes creativitiy, collaboration and confidence (the 3Cs) as well as high performance – the behaviors we deem crucial to the successful delivery of our corporate strategy. In fact, our culture and people serve as the foundation and a key enabler of the Creating the New strategy.
Performance management
To drive high performance within the company, in 2018 we replaced our performance management approach called ‘The Score’ with ‘#MYBEST’, which is a new and holistic performance development approach combining monthly high-quality conversations between the employee and the line manager as well as regular upward and peer feedback options with quarterly target setting and performance evaluation.
The approach is based on the evaluation of multiple dimensions:
— Target achievement: qualification of how well an employee has delivered upon established quarterly objectives
— Behaviors: qualification of how well an employee is living the company Leadership Framework and 3C behaviors
— Peer and upward feedback: employees can request and incorporate feedback from colleagues and direct reports in their overall assessment for a more holistic review.
Wages, benefits and incentives
We are committed to rewarding our employees with compensation, benefit and incentive programs that are competitive in the marketplace and are aligned with our performance culture. Remuneration throughout the company comprises fixed and variable monetary compensation, non-monetary rewards as well as other intangible benefits. The cornerstone of our rewards program is our Global Salary Management System, which is used as a basis for establishing and evaluating the value of employees’ positions and salaries in a market-driven and performance-oriented way.
The various variable compensation and benefits components we offer our employees include:
— Bonus program – Short Term Incentive (STI) program
— Profit participation program – ‘Champions Bonus’
(Germany)
— Long-Term Incentive (LTI) Plan for senior management and Executive Board members
— 401-K Retirement Plan (USA) and adidas Pension Plan (Germany)
— adidas Stock Purchase Plan.
We are continuously improving our remuneration approach and are therefore investing in a number of projects and initiatives to increase the significance of our remuneration programs, as well as to ensure we are investing in the right people at the right level. One of the improvements we conducted was the initiation of a new compensation adjustment approach. The approach was introduced in Germany and the US in 2017 and 2018, and is designed to Women in
management positions
ADIDASANNUAL REPORT 2018
084
minimize salary differences and, more importantly, inequity of employees on the same positions and grades. It is based on a higher level of detail for external market data and addresses internal pay gaps – also helping to ensure that we pay equally at the same level for female and male employees.
Furthermore, we developed a monitoring approach to identify potential pay gaps and work continuously to improve and close these gaps on a country-by-country basis. To further enhance our efforts and transparency on this topic we support initiatives such as ‘Lean In’ and will also in 2019 put a strong emphasis on continuously closing potential gaps.
In addition, we improved transparency and governance for senior management remuneration. Analytics for our global management population provided higher transparency about actual remuneration as well as internal and external positioning of compensation and benefits packages. The aim was to ensure objective decision making for management remuneration, and to continue standardizing our pay structures. In 2017, we rolled out a global Long-Term Incentive Program for senior management. This program provides Restricted Stock Units (RSU), linked to our Earnings per Share (EPS) targets and to our share price performance. It closely links the goals of our senior management with those of our shareholders – sustainable success and long-term growth – and fosters a company ownership mentality. SEE NOTE 28, P. 189
Our subsidiaries also grant a variety of benefits to employees, depending upon locally defined practices and country-specific regulations and norms.
Stock Purchase Plan
Participation in the Stock Purchase Plan is provided to
By the end of 2018, approximately 4,800 employees (2017:
3,600) participated in the program.
Work-life integration
We aim to harmonize the commercial interests of the company with the professional, private and family needs of our employees. Our Work-Life Integration initiatives and programs include the provision of flexible working times and place, people development and leadership competence related to work-life integration, as well as family-oriented services.
In addition to providing flexible working opportunities such as teleworking, sabbaticals and parent/child offices, we have two day-care facilities at our headquarters in Herzogenaurach, Germany. After opening our first full-time care center ‘World of Kids I’ that offers places for 130 children aged three months to school entry age in 2013, an outdoor group with 20 additional places for kindergarten children was added in 2017, as well as the second facility ‘World of Kids II’ in 2018, providing 138 spots for nursery and kindergarten children. In 2019, this will be complemented by 15 ad hoc places to support all parents in emergency situations or during short-term assignments.
On-site, our external partners are upskilled and trained on an educational approach that is based on our company values such as creativity, diversity and inclusion, democracy, health and movement. Additionally, World of Kids is among 100 digital leading model childcare centers in Germany and has been supported with technical equipment (e.g. iPads or cameras for kids). Other global locations also offer various forms of benefits and support services to ensure that our employees are able to access and secure quality childcare.
With the ongoing expansion of our infrastructure and childcare offering, we as a company emphasize our commitment to a
For parental leave and re-entry, programs are in place to provide employees with advice early on and options for their return to work, also taking into consideration flexible working hours and work locations. In Germany, we guarantee our employees on parental leave their positions, which are only filled temporarily. In the US, in addition to regular parental leave for new parents (up to 10 weeks at home, 70% of their salary), adidas offers an extra two weeks’ paid parental leave for parents. Furthermore, adidas’ special parental bonding leave provides parents with the possibility to stay home for up to six months within the first twelve months after the child’s birth or placement. While unpaid, it offers parents the opportunity to stay home longer and take care of their new arrival and new life together.
Continuing in Germany in 2018, every employee with an adidas AG contract whose working tasks can be carried out independently of campus facilities, campus equipment or personal interaction on-site is eligible to work 20% of their total working time off-campus. This new policy and agreement is based on our belief that results can be achieved in the same quality and quantity, regardless of people’s location. Over the course of the year we evaluated our off-campus working approach in Germany. Approximately 3,400 employees took part in a survey, and based on the positive feedback we decided to roll out the off-campus working approach globally.
Our North America market implemented the concept in November, and additional markets will begin the implementation process in 2019.
In line with the expansion efforts at the headquarters campus in Herzogenaurach, in 2018 we opened HalfTime, a 14,000m² event center with integrated employee restaurant that is
ADIDASANNUAL REPORT 2018
085
called Arena will become the company’s new main office with capacity for around 2,000 employees, centralizing most of the employees in Herzogenaurach on the World of Sports campus.
Continuing the successes of our newly established workplace spaces (called BASE, Pitch 1 and Pitch 2), we are integrating the activity-based working concept, which means that employees no longer have assigned desks and instead choose from a variety of rooms and spaces, dependent on their needs.