Twelve million euros in severance pay, 3.6 million euros in compensation and around 300,000 euros in residual salary will cost the sporting goods manufacturer Adidas the replacement of their CEO Kasper Rorsted.
The 61-year-old’s contract was only extended by five years in 2021. Adidas announced in the summer that Rorsted would have to leave the group.
Adidas is meanwhile in crisis: For the first time in decades, the operating result could be up to 700 million in the red.
Because CEO Kasper Rorsted has to leave Adidas almost four years before the end of the contract, it costs the sporting goods manufacturer almost 16 million euros. In addition to a severance payment of twelve million euros, the 61-year-old Dane will receive around 3.6 million euros in compensation for not being allowed to hire with an industry competitor in the next 18 months. He was also paid the remaining salary for November and December 2022: another 300,000 euros. This emerges from an annual report published on Wednesday.
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In the summer of 2022, Adidas announced that Rorsted would leave the Dax group in 2023. The Dane and the supervisory board had agreed on this, it said. Rorsted’s contract was only extended by five years in 2021. At the beginning of the year, Rorsted was replaced by the Norwegian Björn Gulden as CEO.
There is a risk of losses of up to 700,000 euros
Europe’s largest sporting goods manufacturer Adidas remains in crisis mode for the time being. The head of the group, Gulden, who has changed from competitor Puma, expects a drop in currency-adjusted sales in the high single-digit percentage range for the current year, partly because of the political and economic uncertainties. The need to reduce high inventories also contributes to this. A few weeks ago, Gulden had to issue a profit warning because of the loss of business with Yeezy products, which were created in collaboration with scandal rapper Kanye West.
The operating result could be up to 700 million in the red for the first time in decades. The operating result could be up to 700 million in the red for the first time in decades. “2023 will be a transitional year to lay the foundation for 2024 and 2025,” said Gulden when presenting the annual figures on Wednesday.
Adidas lost 600,000 euros to Kanye West
After the slump in profits last year, shareholders have to adjust to a significantly lower distribution. They are to receive a dividend of EUR 0.70 per share after EUR 3.30 in the previous year, as Adidas further announced. In 2022, the group struggled with high inflation and problems in China. Adidas has been more successful there for years than industry leader Nike and local rival Puma.
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In addition, the cooperation with Kanye West was terminated, among other things, because of anti-Semitism allegations against the rapper. West’s Yeezy products contributed 1.2 billion euros to sales and 500 million euros to profits. Profit from continuing operations collapsed from almost 1.5 billion to 254 million euros. The sporting goods manufacturer thus confirmed the preliminary figures it had already presented.
In the fourth quarter there was even a loss of 482 million euros after a profit of 123 million euros a year earlier. With the end of the Yeezy cooperation, Adidas lost around 600 million euros in sales, which rose by a total of one percent to 5.2 billion euros. Currency-adjusted, Adidas posted a minus of one percent. The Yeezy issue will also weigh on the group in the current year.
kit with material from the dpa