It’s a classic case of “no good deed goes unpunished.” Adidas, the iconic sports brand, may have reported a record-breaking profit for 2020, but their ex-CEO Kasper Rorsted will receive €9mn in compensation while the company decides to reduce its dividend. The news has raised eyebrows among investors and consumers alike, leaving many wondering what happened behind closed doors at Adidas. In this blog post, we’ll explore the details of this story and try to make sense of it all. So hold onto your adidas sneakers folks – we’re about to unravel this mystery!
Adidas Ex-CEO to Receive €9mn in Compensation
Adidas’ outgoing CEO, Kasper Rorsted, is set to receive a €9 million ($10.4 million) compensation package, even as the company reduces its dividend payout to shareholders.
Rorsted, who is stepping down after eight years at the helm of the German sportswear giant, will receive a €3 million severance payment and a €6 million pension payout, Adidas said in its annual report on Wednesday.
The news comes as a surprise to many, given that Rorsted was widely credited with turning around Adidas’ fortunes and steering it through troubled waters in recent years. His tenure saw the company post strong financial results and shareholder returns.
However, the coronavirus pandemic has taken a heavy toll on Adidas’ business, with the company forced to close stores and factories around the world. The pandemic has also hammered the global sporting goods market, which is unlikely to recover fully for several years.
In light of these challenges, Adidas has decided to reduce its dividend payout for 2020 by 50%, from €1.60 per share to €0.80 per share. The company said it would also suspend its share buyback program for the year.
Despite these measures, Rorsted will still walk away with a healthy pay packet when he leaves Adidas later this year. His total compensation for 2020 is €9 million, which includes his salary, bonus, and pension payments.
Adidas announced yesterday that it would be reducing its dividend by 50% in order to save cash and invest in its turnaround plan. This news comes as the company continues to struggle financially, with ex-CEO Herbert Hainer receiving €17 million in compensation last year despite the company’s performance.
The dividend reduction is a sign that Adidas is feeling the pressure financially, and is willing to make sacrifices in order to turn things around. While this may be disappointing news for shareholders, it is clear that the company is committed to getting back on track.
Adidas has been struggling in recent years, but hopes that its turnaround plan will help it get back on track. Part of this plan includes reducing its dividend by 50%. This move will save the company cash which can then be reinvested into the business.
Although this news may be disappointing for shareholders, it is a necessary step if Adidas wants to regain its place as a leading sportswear brand.
Adidas Shares Drop
After a disappointing earnings report, Adidas shares tumbled 10% on Thursday. The German sportswear company cut its dividend for the first time in over 20 years and announced that ex-CEO Herbert Hainer will receive a €24 million golden goodbye.
Investors were clearly unimpressed with Adidas’ performance, sending the stock spiraling downward. The company has been struggling to keep up with rival Nike in recent years, and this latest earnings miss is likely to add more pressure on current CEO Kasper Rorsted.
Hainer’s exit package was certainly not welcomed by shareholders either. While it’s not unusual for departing CEOs to receive sizable payouts, the timing of this particular severance package is highly suspicious. Just last month, Adidas announced that it would be cutting jobs and reducing costs in an effort to improve profitability. And now, less than two weeks later, Hainer walks away with a €24 million windfall.
It’s no wonder shareholders are feeling frustrated. With its share price under pressure and morale at an all-time low, Adidas faces an uphill battle to regain investor confidence.
How This Will Impact Adidas’ Future
1. How This Will Impact Adidas’ Future
The recent news that former Adidas CEO Herbert Hainer will receive €8 million in compensation has caused quite a stir. The amount is significantly higher than what was originally reported, and many are wondering how this will impact the company’s future.
Adidas has been facing some challenges in recent years, including declining sales and margins. This hefty payouts to its former CEO is likely to further reduce the company’s profitability. In addition, the news may damage Adidas’ reputation with shareholders and the general public.
It remains to be seen how this will play out in the long run, but it’s safe to say that Adidas is facing some serious headwinds at the moment.
The news of Adidas’ ex-CEO’s significant compensation package and reduction in dividend payments leaves a lot to be desired. It is an unsatisfactory situation for shareholders, employees, and customers alike who have been affected by the financial hit that Adidas has taken under its leadership changes. However, with new leadership set to take the reins at Adidas, hopefully this will be seen as a lesson learned and will lead to better decisions being made in the future. Only time will tell if these changes result in improved performance from Adidas and more positive long-term results for all stakeholders involved.