UPDATE 2-Adidas CEO faces down investor unrest over Nike advance

Thu May 8, 2014 9:00am EDT

* CEO's contract recently extended until 2017

* 2015 targets could take longer to achieve

* Big shareholder critical of CEO's leadership

* Majority of shareholders back management

* CEO shakes up management, to set new goals for 2020 (Adds more comments, vote results)

By Jörn Poltz

FUERTH, Germany, May 8 (Reuters) - The long-serving chief executive of German sportswear company Adidas sought to rebuff criticism of his leadership from shareholders on Thursday, as the firm struggles to stop the advance of market leader Nike .

The world's second-biggest sportswear firm has been losing market share in its home territory of western Europe to Nike, which is challenging the German company's dominance in the soccer market ahead of the World Cup in Brazil next month.

Herbert Hainer, who has been Adidas CEO since 2001 and recently had his contract extended until 2017, admitted the company had made "a few executional mistakes" but said a revamped executive team had the talent to revive performance.

"A high-quality management team knows how to tackle challenges. And believe me, we have all the insight, character and determination to do exactly this," Hainer told the company's annual general meeting in the Bavarian town of Fuerth.

"We will achieve most, if not all, of our 'Route 2015' operational targets. However, it might take a little longer than we originally anticipated," the 59-year-old added.

Adidas, which reported weak first-quarter results on Tuesday, had already warned in March that weakening emerging market currencies, notably the Russian rouble, would hurt 2014 results and pose a risk to its 2015 targets.

MANAGEMENT SHOULD BE MEASURED LIKE ATHLETES

Ingo Speich, a fund manager at Union Investment which has a 0.89 percent stake in Adidas and is its tenth-biggest investor, called on shareholders to refuse to grant the customary endorsement of management's actions.

"Even on the German football field, Nike is increasingly sidelining Adidas," Speich told the AGM. "Athletes are measured by whether they achieve their goals - that should also apply to managers in the sporting goods industry."

Speich said Adidas shares had underperformed Nike by about 16 percent in the last 12 months, which Hainer countered by showing a chart which showed Adidas rising more over five years.

"We're going to work on regaining your confidence," he said, inviting Speich to speak to him in person about his concerns.

Despite Speich's comments, a majority of shareholders voted to endorse the executive and supervisory boards.

Nike extended its lead to take 15 percent of the global sportswear market in 2013 compared with 10.8 percent for Adidas, according to data from Euromonitor, a market research firm.

Hainer, who joined Adidas in 1987 as a sales director, is the longest-serving boss among German blue-chip companies and in March also took over as chairman of soccer club Bayern Munich after Uli Hoeness was convicted for tax evasion.

He said he would be defining a new long-term strategy for the period up to 2020 in coming months and pursing the generation change he has already started among management.

At the AGM, he presented Roland Auschel and Eric Liedtke, the recently appointed heads of global sales and global brands, and also noted that Mark King will take over as new head of the struggling North America business in June. (Reporting by Joern Poltz, writing by Emma Thomasson; Editing by Thomas Atkins and William Hardy)

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