Two Adidas shareholders ask questions about new board chief, diversity
Two major shareholders of Adidas AG have criticized the selection of the new chairman of the sportswear company’s supervisory board, saying he already holds a full-time position at the head of another company.
Thomas Rabe, who joined Adidas ‘supervisory board last year, is expected to replace longtime chairman Igor Landau as the supervisor after Tuesday’s annual shareholders’ meeting. Rabe is also Managing Director of German media company Bertelsmann SE. This makes him unfit to lead the adidas supervisory board, “because they’re two full-time jobs,” said Vanda Heinen, analyst at Union Investment, in an emailed statement.
Shareholders also raised concerns over Bodo Uebber, which joined Adidas’ supervisory board last year. He is a member of two boards of directors affiliated with Bertelsmann – as well as a partner of a third entity linked to this company. This creates the possibility of conflicts of interest between Uebber and Rabe, said Ingo Speich, head of corporate governance at Deka Investment in Frankfurt.
On Tuesday, Deka plans to vote against exonerating Adidas’s supervisory board from liability for its actions last year, a rare reprimand in German companies from a major shareholder.
The new 16-member supervisory board would include four people who are CEOs of other companies. “It is doubtful whether these people will have enough time” for the Adidas board, Speich said in a statement, “or whether the work there will be a minor issue.”
Adidas did not immediately respond to a request for comment on the investor statements. Bertelsmann did not immediately respond to a request for comment from Rabe or Uebber.
Union Investment owns 1.3% of the capital of Adidas, making it the 11th shareholder, according to data compiled by Bloomberg. Deka holds a 0.6% stake, making it the 17th largest.
Union and Deka have slammed the Adidas management team, including CEO Kasper Rorsted, who has just signed a five-year contract extension. The company’s management came under increased scrutiny following the resignation of chief human resources officer Karen Parkin on June 30 following criticism from black employees that she described the concerns of the staff regarding racial “noise” disparities.
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While saying progress has been made in promoting diversity, investors both called for more concrete plans. Still, the two plan to vote in favor of Rorsted’s squad.
This contrasts with the recommendation of the influential advisory group Glass Lewis & Co., which called on shareholders not to support the management team, while supporting the supervisory board. High-profile diversity issues could cause Adidas to lose talented customers and workers, Glass Lewis said.
“Adidas condemns discrimination in all its forms,” the company said in a statement on the Glass Lewis recommendations. “Over the past few months, our Board of Directors has taken decisive action by taking action to create a diverse and inclusive workplace and fight racism.”
On Thursday, Rorsted said he had been in listening sessions with employees around the world since taking over as head of human resources in recent weeks and had heard about the discomfort of some workers facing Adidas’ management of diversity issues. The CEO is committed to fixing the situation.
Rorsted’s message won him praise from some quarters.
The company “is going in the right direction with diversity,” said John Kernan, New York-based analyst at Cowen, in an email.