A top Adidas executive received a “final warning” last year over repeated “inappropriate and unacceptable” remarks about diversity at the sportswear group, according to people familiar with the matter.
Chief sales officer Roland Auschel was the subject of a compliance probe after a string of complaints by Adidas employees, these people told the Financial Times. While he was rebuked by the supervisory board, he nonetheless received a 26 per cent increase in his bonus in the same year and a contract extension in early 2022.
The revelation of the probe, which started in late 2020 and closed last year, comes as Adidas grapples with allegations that it mishandled and downplayed racism.
In October, the sportswear group cut ties with rapper and fashion designer Kanye West following global outrage over his antisemitic comments. In 2020, top human resources executive Karen Parkin resigned after telling employees that discussions about racism were “noise”.
Last week, Adidas said it would launch an investigation into allegations of misconduct against West after the company was accused of turning a blind eye to the artist’s inappropriate behaviour during their Yeezy trainers tie-up.
Asked about the Auschel allegations, Adidas told the FT that “a reputable law firm” investigated complaints about “potential breaches of internal conduct guidelines” in a “comprehensive and independent” probe. People familiar with the matter added that the investigation, which was overseen by the supervisory board, was triggered by several anonymous employees who turned to the group’s whistleblower hotline.
Eight people who worked with Auschel, one of Adidas’s most senior and best-paid executives, told the FT that a number of employees have been offended by remarks that they found derogatory, discriminatory and racist, leading to various complaints to the chief executive and the human resources department.
In one incident, which was investigated in the compliance probe, Auschel told more than 200 managers at meeting at the brand’s headquarters in 2019 that the promotion of a black manager was Adidas’s “contribution to diversity”. Some Adidas employees were furious at the suggestion the manager was chosen for his ethnicity rather than his skills.
“It was completely inappropriate,” said one person who was present, adding that at the behest of other senior managers, a video of his speech was not published on the Adidas intranet, as would have been typical. Multiple Adidas insiders who worked underneath Auschel said it was not an isolated incident.
Auschel did not respond to a request for comment. Adidas chair Thomas Rabe, chief executive of German media giant Bertelsmann, declined to comment.
The law firm concluded in a lengthy report that Auschel’s conduct was not grave enough to fire him under Germany’s labour laws, Adidas said. “There have been no further indications of possible misconduct since then,” the company said in a statement, adding it was part of the group’s diversity and inclusion efforts “to recognise sincere efforts to bring about positive change”.
The supervisory board was also keen to avoid the departure of another top executive after losing its head of global brand, Eric Liedtke, in late 2019 and Parkin in 2020, according to a person familiar with the matter, who said Auschel’s more than 30 years with the company also played a part in the response.
“The investigation revealed a training need for the executive in question in the areas of communication and diversity, equity and inclusion,” Adidas said, adding that its “expectation to comply with the conduct guidelines” was “emphatically addressed”. Auschel subsequently “underwent several months of coaching in 2021”.
Auschel was rebuked by a member of the supervisory board in personal meetings, who told the 59-year-old that his remarks were unacceptable and inappropriate for the company and had to stop immediately. “Auschel received a final warning, he was given a last chance,” said one person familiar with the matter.
“He does not mean his remarks in the way that many people understand them,” the person added.
The board’s sanctions against the executive did not include any financial penalty. He received a 26 per cent increase in his variable pay in 2021, lifting his total remuneration to €3.6mn.
Adidas has been struggling to deal with diversity and racism since the protests erupted over the George Floyd killing in 2020. The group’s main competitor, Nike, spearheaded condemnations, launching an influential campaign with the tagline “For once, Don’t do it”. Adidas employees petitioned senior executives to come out with a strong anti-racism statement, but the company retweeted its rival’s campaign instead.