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Adidas chair Thomas Rabe faces an investor insurrection towards his re-election, with 4 of Germany’s main asset managers set to vote towards him amid considerations over his a number of mandates and a failure to implement a promised succession plan.
DWS, the asset administration arm of Deutsche Financial institution, advised the Monetary Occasions that it might vote towards Rabe’s re-election as chair of the German sportswear firm’s advisory board on the annual assembly on Thursday due to a “repeated breach of expectations”.
Hendrik Schmidt, company governance analyst at DWS, stated the asset supervisor had issued Rabe with a “yellow card” final 12 months as a result of it was involved about his twin position as chief govt of media group Bertelsmann.
DWS determined then to withhold opposition to his reappointment solely after getting assurances {that a} succession plan can be in place by this 12 months’s AGM. It might now vote towards him as a result of that promise was not saved and Rabe had determined to face for one more one-year time period.
Deka and Allianz World Traders are amongst different huge German buyers which have additionally reversed their stance and now plan to oppose Rabe’s re-election. Union Funding, which voted towards him final 12 months, stated it might achieve this once more on Thursday.
Collectively, the 4 asset managers management about 5 per cent of Adidas shares and rank amongst its prime 15 shareholders. Rabe must win the backing of a majority of Adidas’s voting shareholders to be re-elected. Adidas refused to touch upon “hypothesis.”
Rabe has presided over a tumultuous interval that included the collapse of the profitable Yeezy partnership following antisemitic remarks by designer and rapper Ye in 2022. However the firm has since staged a restoration below new chief govt Bjørn Gulden, appointed in 2023.
Proxy advisory agency Institutional Shareholder Providers has additionally really useful voting towards Rabe, citing an “extreme variety of mandates” and “inadequate” gender range at Adidas, which has 4 ladies and twelve males on the supervisory board.
The rising backlash towards Rabe, who has chaired the Adidas advisory board since 2020, highlights a broader shift in Germany towards the observe of boards being chaired by sitting chief executives or former chiefs of the identical firm.
Traders have more and more raised considerations about independence, oversight high quality and board professionalism — prompting a retreat from the observe in recent times.
Rabe, who already confronted criticism for combining the Adidas chair along with his management of Bertelsmann, restricted his time period to at least one 12 months in 2024, when he was re-elected final 12 months with simply 69 per cent of shareholder assist.
That stage of assist was a comparatively low consequence by German requirements and the determine might fall additional this 12 months as key buyers lose persistence.
Bertelsmann declined to remark. Adidas referred to Rabe’s letter to shareholders forward of the AGM, wherein he stated his continued management was “essential to additional guarantee a sustainable turnaround” on the firm.
He stated a “clean handover” would require “intensive preparation and analysis,” justifying one other 12 months within the position earlier than he stepped down “for good”.
“We’re conscious that this modifications our preliminary plan and the choice to take action was not a straightforward one,” he stated within the letter, wherein he additionally pledged to enhance the board’s gender range throughout subsequent 12 months’s elections.
Whereas ISS is urging shareholders to oppose Rabe, rival proxy adviser Glass Lewis stated such a transfer can be “disproportionate,” citing his said intentions and the absence of other candidates.
