|
| | | | | | | |
NAME | FISCAL YEAR | ANNUAL INCENTIVE COMPENSATION(a) ($) |
| LONG-TERM INCENTIVE COMPENSATION(b) ($) |
| TOTAL ($) |
|
John J. Donahoe II | 2020 | — |
| — |
| — |
|
Mark. G Parker | 2020 | — |
| — |
| — |
|
| 2019 | 4,091,695 |
| — |
| 4,091,695 |
|
| 2018 | — |
| 1,295,000 |
| 1,295,000 |
|
Matthew Friend | 2020 | — |
| — |
| — |
|
Andrew Campion | 2020 | — |
| — |
| — |
|
| 2019 | 1,266,925 |
| — |
| 1,266,925 |
|
| 2018 | — |
| 277,500 |
| 277,500 |
|
Hilary K. Krane | 2020 | — |
| — |
| — |
|
| 2019 | 1,252,850 |
| — |
| 1,252,850 |
|
| 2018 | — |
| 185,000 |
| 185,000 |
|
Monique Matheson | 2020 | — |
| — |
| — |
|
John F. Slusher | 2020 | — |
| — |
| — |
|
| 2019 | 1,123,810 |
| — |
| 1,123,810 |
|
| 2018 | — |
| 185,000 |
| 185,000 |
|
Elliott J. Hill | 2020 | — |
| — |
| — |
|
| 2019 | 1,366,085 |
| — |
| 1,366,085 |
|
Eric D. Sprunk | 2020 | — |
| — |
| — |
|
| 2019 | 1,393,620 |
| — |
| 1,393,620 |
|
| 2018 | — |
| 277,500 |
| 277,500 |
|
| |
(a) | Amounts shown were earned for performance in the applicable fiscal year under our Executive Performance Sharing Plan. |
| |
(b) | Amounts shown were earned for performance during the three-year period ending with the applicable fiscal year under our Long-Term Incentive Plan. |
| |
(5) | For fiscal 2020, includes Company matching contributions to the 401(k) Plan in the amount of $9,375 for Mr. Campion and $14,000 for each of the other Named Executive Officers. For Mr. Donahoe, includes $63,695 in director fees for his service on our Board as a non-employee director through January 12, 2020. The amount for Mr. Donahoe also includes $1,500,000 in charitable matching contributions made by the Company, as well as relocation-related expenses, reimbursement for legal fees and expenses in connection with his offer letter, a security assessment, and Company-related merchandise. For Mr. Parker, includes $10,000 in compensation in recognition of 40 years of service with the Company, and associated tax reimbursement in the amount of $9,399, pursuant to our Valued Service Award Program, under which all employees receive cash awards and associated tax reimbursements in recognition of their significant service anniversaries with the Company. The amount for Mr. Parker also includes $800,000 in charitable matching contributions made by the Company, as well as daily residential security, including monitoring and patrols provided by the Company, and a site-visit gift. The amounts for Mr. Donahoe and Mr. Parker also include $23,515 and $78,618, respectively, in aggregate incremental cost to the Company for personal use of the Company's aircraft and actual cost of chartered flights for travel to and from the board and shareholder meetings of outside companies for which Mr. Donahoe and Mr. Parker serve as directors. The aggregate incremental cost is determined based on the variable operating cost to the Company, including the cost of fuel, maintenance, crew travel expenses, landing fees, parking fees, in-flight food and beverage, and other smaller variable costs associated with each flight. These amounts exclude the aggregate incremental cost to the Company for personal use of the Company’s aircraft for which Mr. Donahoe or Mr. Parker, as applicable, reimbursed the Company in accordance with a time sharing agreement and as allowed under Federal Aviation Regulation 91.501(c) and (d). The amount for Mr. Hill includes financial advisory services, spousal travel to and attendance at Company-sponsored functions, Company-related merchandise, a dinner, and a project-completion gift. |
| |
(6) | Because Mr. Donahoe, Mr. Friend, and Ms. Matheson were only Named Executive Officers for fiscal 2020, and Mr. Hill was only a Named Executive Officer for fiscal 2020 and fiscal 2019, no disclosure is included as to Mr. Donahoe, Mr. Friend, and Ms. Matheson for fiscal 2019 or fiscal 2018, or as to Mr. Hill for fiscal 2018. |
GRANTS OF PLAN-BASED AWARDS IN FISCAL 20202023
The following table sets forth information concerning the performance-based annual cash incentive opportunities performance-based long-term cash incentive opportunities, restricted stock and RSU awards,PSUs, RSUs, and stock options granted to the Named Executive Officers in fiscal 2020.2023.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | ESTIMATED FUTURE PAYOUTS UNDER NON-EQUITY INCENTIVE PLAN AWARDS(1) | | ESTIMATED FUTURE PAYOUTS UNDER EQUITY INCENTIVE PLAN AWARDS(2) | ALL OTHER STOCK AWARDS: NUMBER OF SHARES OF STOCK OR UNITS(3) | ALL OTHER OPTION AWARDS: NUMBER OF SECURITIES UNDERLYING OPTIONS(4) | EXERCISE OR BASE PRICE OF OPTION AWARDS | GRANT DATE FAIR VALUE OF STOCK AND OPTION AWARDS(5) |
| | | THRESHOLD | TARGET | MAXIMUM | | THRESHOLD | TARGET | MAXIMUM |
NAME | GRANT DATE | APPROVAL DATE | ($) | ($) | ($) | | (#) | (#) | (#) | (#) | (#) | ($/SH) | ($) |
John Donahoe II | | | 1,500,000 | 3,000,000 | 4,500,000 | | | | | | | | |
| 8/1/2022 | 6/22/2022 | | | | | 18,328 | 73,312 | 146,624 | | | | 10,250,484 |
| 8/1/2022 | 6/22/2022 | | | | | | | | 25,984 | | | 2,969,971 |
| 8/1/2022 | 6/22/2022 | | | | | | | | | 225,564 | 114.30 | 7,247,371 |
Matthew Friend | | | 750,000 | 1,500,000 | 2,250,000 | | | | | | | | |
| 8/1/2022 | 6/10/2022 | | | | | 4,640 | 18,560 | 37,120 | | | | 2,595,059 |
| 8/1/2022 | 6/10/2022 | | | | | | | | 12,992 | | | 1,484,986 |
| 8/1/2022 | 6/10/2022 | | | | | | | | | 75,188 | 114.30 | 2,415,790 |
Andrew Campion | | | 750,000 | 1,500,000 | 2,250,000 | | | | | | | | |
| 8/1/2022 | 6/10/2022 | | | | | 4,640 | 18,560 | 37,120 | | | | 2,595,059 |
| 8/1/2022 | 6/10/2022 | | | | | | | | 12,992 | | | 1,484,986 |
| 8/1/2022 | 6/10/2022 | | | | | | | | | 75,188 | 114.30 | 2,415,790 |
Heidi O'Neill | | | 750,000 | 1,500,000 | 2,250,000 | | | | | | | | |
| 8/1/2022 | 6/10/2022 | | | | | 4,640 | 18,560 | 37,120 | | | | 2,595,059 |
| 8/1/2022 | 6/10/2022 | | | | | | | | 12,992 | | | 1,484,986 |
| 8/1/2022 | 6/10/2022 | | | | | | | | | 75,188 | 114.30 | 2,415,790 |
Mark Parker | | | — | — | — | | | | | | | | |
| 8/1/2022 | 6/10/2022 | | | | | — | — | — | | | | — | |
| 8/1/2022 | 6/10/2022 | | | | | | | | — | | | | — | |
| 8/1/2022 | 6/10/2022 | | | | | | | | | 71,608 | 114.30 | 2,300,765 |
|
| | | | | | | | | | | | | | | | | | | |
| | ESTIMATED FUTURE PAYOUTS UNDER NON-EQUITY INCENTIVE PLAN AWARDS | | ESTIMATED FUTURE PAYOUTS UNDER EQUITY INCENTIVE PLAN AWARDS |
| | ALL OTHER STOCK AWARDS: NUMBER OF SHARES OF STOCK OR UNITS(4) |
| | ALL OTHER OPTION AWARDS: NUMBER OF SECURITIES UNDERLYING OPTIONS(5) |
| EXERCISE OR BASE PRICE OF OPTION AWARDS |
| GRANT DATE FAIR VALUE OF STOCK AND OPTION AWARDS(6) |
|
| | THRESHOLD | | TARGET | | MAXIMUM | TARGET | | |
NAME | GRANT DATE | ($) | | ($) | | ($) | | (#) | | (#) |
| | (#) |
| ($/SH) |
| ($) |
|
John J. Donahoe II | 1/13/2020 | 1,500,000 | (1) | 3,000,000 | (1) | 4,500,000 | (1) | | | | | | | |
| 1/13/2020 | 2,500,000 | (2) | 5,000,000 | (2) | 10,000,000 | (2) | | | | | | | |
| 9/19/2019 | | | | | | | | | 1,996 |
| | | | 175,049 |
|
| 1/13/2020 | | | | | | | | | 35,239 |
| | | | 3,600,016 |
|
| 1/13/2020 | | | | | | | | | 171,300 |
| | | | 17,500,008 |
|
| 1/13/2020 | | | | | | | | | | | 236,843 |
| 102.16 |
| 5,480,547 |
|
| 1/13/2020 | | | | | | | 767,544 |
| (3) | | | | 102.16 |
| 17,760,968 |
|
Mark G. Parker | 6/19/2019 | 1,700,000 | (1) | 3,400,000 | (1) | 5,100,000 | (1) | | | | | | | |
| 6/19/2019 | 2,500,000 | (2) | 5,000,000 | (2) | 10,000,000 | (2) | | | | | | | |
| 8/1/2019 | | | | | | | | | 48,124 |
| | | | 4,000,067 |
|
| 8/1/2019 | | | | | | | | | | | 302,268 |
| 83.12 |
| 5,540,572 |
|
Matthew Friend | 6/19/2019 | 525,000 | (1) | 1,050,000 | (1) | 1,575,000 | (1) | | | | | | | |
| 6/19/2019 | 500,000 | (2) | 1,000,000 | (2) | 2,000,000 | (2) | | | | | | | |
| 8/1/2019 | | | | | | | | | 4,813 |
| | | | 400,057 |
|
| 8/1/2019 | | | | | | | | | | | 36,095 |
| 83.12 |
| 661,621 |
|
Andrew Campion | 6/19/2019 | 660,000 | (1) | 1,320,000 | (1) | 1,980,000 | (1) | | | | | | | |
| 6/19/2019 | 500,000 | (2) | 1,000,000 | (2) | 2,000,000 | (2) | | | | | | | |
| 8/1/2019 | | | | | | | | | 13,956 |
| | | | 1,160,023 |
|
| 8/1/2019 | | | | | | | | | | | 87,658 |
| 83.12 |
| 1,606,771 |
|
Hilary K. Krane | 6/19/2019 | 660,000 | (1) | 1,320,000 | (1) | 1,980,000 | (1) | | | | | | | |
| 6/19/2019 | 500,000 | (2) | 1,000,000 | (2) | 2,000,000 | (2) | | | | | | | |
| 8/1/2019 | | | | | | | | | 13,956 |
| | | | 1,160,023 |
|
| 8/1/2019 | | | | | | | | | | | 87,658 |
| 83.12 |
| 1,606,771 |
|
Monique Matheson | 6/19/2019 | 660,000 | (1) | 1,320,000 | (1) | 1,980,000 | (1) | | | | | | | |
| 6/19/2019 | 500,000 | (2) | 1,000,000 | (2) | 2,000,000 | (2) | | | | | | | |
| 8/1/2019 | | | | | | | | | 13,956 |
| | | | 1,160,023 |
|
| 8/1/2019 | | | | | | | | | | | 87,658 |
| 83.12 |
| 1,606,771 |
|
John F. Slusher | 6/19/2019 | 660,000 | (1) | 1,320,000 | (1) | 1,980,000 | (1) | | | | | | | |
| 6/19/2019 | 500,000 | (2) | 1,000,000 | (2) | 2,000,000 | (2) | | | | | | | |
| 8/1/2019 | | | | | | | | | 13,956 |
| | | | 1,160,023 |
|
| 8/1/2019 | | | | | | | | | | | 87,658 |
| 83.12 |
| 1,606,771 |
|
Elliott J. Hill | 6/19/2019 | 720,000 | (1) | 1,440,000 | (1) | 2,160,000 | (1) | | | | | | | |
| 6/19/2019 | 500,000 | (2) | 1,000,000 | (2) | 2,000,000 | (2) | | | | | | | |
| 8/1/2019 | | | | | | | | | 15,641 |
| | | | 1,300,080 |
|
| 8/1/2019 | | | | | | | | | | | 98,237 |
| 83.12 |
| 1,800,684 |
|
Eric D. Sprunk | 6/19/2019 | 720,000 | (1) | 1,440,000 | (1) | 2,160,000 | (1) | | | | | | | |
| 6/19/2019 | 500,000 | (2) | 1,000,000 | (2) | 2,000,000 | (2) | | | | | | | |
| 8/1/2019 | | | | | | | | | 15,641 |
| | | | 1,300,080 |
|
| 8/1/2019 | | | | | | | | | | | 98,237 |
| 83.12 |
| 1,800,684 |
|
| |
(1) | These amounts represent the potential performance-based annual cash incentive awards payable for performance during fiscal 2020(1)These amounts represent the potential performance-based annual cash incentive awards payable for performance during fiscal 2023 under our PSP. Under this plan, the Compensation Committee approved target awards for fiscal 2020 based on a percentage of the executive’s base salary paid during fiscal 2020 as follows: Mr. Donahoe, 200%; Mr. Parker, 200%; Mr. Friend, 120%; Mr. Campion, 120%; Ms. Krane, 120%; Ms. Matheson, 120%; Mr. Slusher 120%; Mr. Hill, 120%; Mr. Sprunk, 120%. The Compensation Committee also established a series of performance targets based on our Adjusted |
EBIT for fiscal 2020 (earnings before interest2023 based on a percentage of the executive's base salary paid during fiscal 2023 as follows: Mr. Donahoe, 200%; Mr. Friend, 120%; Mr. Campion, 120%; Ms. O'Neill, 120%; and taxes, excluding the effect of acquisitions, divestitures, accounting changes, restructurings, unanticipated exchange rate fluctuationsMr. Parker, 0%. Fiscal 2023 PSP awards are earned between 0% and other extraordinary, unusual, or infrequently occurring items) corresponding to award payouts ranging from 50% to 150% of the target awards. The fiscal 2020 Adjusted EBIT required to earn the 50% threshold payout level, 100% target payout level, or 150% maximum payout level was $4,736 million, $5,263 million, or $5,789 million, respectively. Participants receive a payout at the percentage level at which the performance target is met, subject to the Compensation Committee’s discretion to reduce or eliminate any award based on Company or individual performance.performance on three equally-weighted metrics—Adjusted Revenue, Adjusted Digital Revenue, and Adjusted EBIT—during fiscal 2023. Actual award payouts earned in fiscal 20202023 and paid in fiscal 20212024 are shown in footnote 4 to the Non-Equity Incentive Plan Compensation column in the Summary Compensation Table.
| |
(2) | These amounts represent the potential performance-based long-term cash incentive awards payable for performance during the three-year period consisting of fiscal 2020-2022 under our LTIP. Under this plan, the Compensation Committee approved target awards for the performance period and also established a series of performance targets and corresponding award payouts, which were modified by the Compensation Committee in June 2020 in response to the COVID-19 pandemic. The participants will receive a payout based on the Company's total shareholder return ("Absolute TSR") for fiscal 2020-2022 relative to total shareholder return over the same period for the other companies in the S&P 500 ("Relative TSR"). This payout is subject to a cap of 100% of the target award if Absolute TSR for the performance period is negative. To earn the 25% threshold payout level, 100% target payout level, or 200% maximum payout level, the Company's fiscal 2020-2022 Relative TSR must be at the 25th percentile, 55th percentile, or 85th percentile, respectively. Fiscal 2020-2022 LTIP awards will be paid in August 2022, provided that the participant is employed by the Company on the last day of the performance period. |
| |
(3) | Represents performance-based stock options granted under our Stock Incentive Plan which vest based on (a) a 20% increase in the value of our Class B Stock from the value on the grant date (based on a 30-trading day average closing price divided by the closing price of a share on the grant date) and (b) continued employment, generally for three years from the grant date. The award has a maximum term of ten years, subject to earlier termination in the event of termination of employment. |
| |
(4) | For Mr. Donahoe, the amount represents grants under our Stock Incentive Plan of (a) restricted stock granted in connection with his service as a non-employee director, which vests on the first anniversary of the grant date (or the date of the next annual meeting of shareholders, if earlier) and (b) RSUs which vest in three equal installments on the first three anniversaries of the grant date. For each other Named Executive Officer, the amount represents grants of RSUs under our Stock Incentive Plan which vest in three equal installments on the first three anniversaries of the grant date. Vesting of RSUs will be accelerated in certain circumstances as described in the section below titled "Potential Payments Upon Termination or Change-in-Control". Dividends are payable on RSUs only upon vesting. |
| |
(5) | Amounts reported in this column represent stock options granted under our Stock Incentive Plan which become exercisable in four equal installments on the first four anniversaries of the grant date. Options may otherwise become fully exercisable in certain circumstances as described in the section below titled "Potential Payments Upon Termination or Change-in-Control". Each option has a maximum term of 10 years, subject to earlier termination in the event of the optionee’s termination of employment. |
| |
(6) | For stock awards, represents the value of restricted stock and RSUs granted based on the closing market price of our Class B Stock on the grant date. For option awards, represents the grant date fair value of stock options granted based on a value of $18.33 per share for the August 1, 2019 grants and $23.14 per share for the January 13, 2020 grants, calculated using the Black-Scholes option pricing model. These are the same values for these equity awards used under accounting guidance applicable to stock-based compensation. The assumptions made in determining option values are disclosed in Note 11 of Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended May 31, 2020. |
(2)These amounts represent grants of PSUs under the SIP which are earned between 0% and 200% of target based on Relative TSR for fiscal 2023 – 2025, subject to a cap of 100% of target if Absolute TSR for the performance period is negative. If Relative TSR is at or above the threshold performance goal, the Compensation Committee may adjust the earnout upwards or downwards by up to 20 percentage points based on a holistic assessment of the Company's performance during the three-year performance period with respect to employee engagement and inclusion, representation of diverse individuals in leadership positions, and sustainability. Earned PSUs will vest in August 2025 and are generally subject to continued employment through the vesting date. Vesting will be accelerated in certain circumstances as described below in the section "Potential Payouts Upon Termination or Change-in-Control". The PSUs accumulate cash dividend equivalents that are paid only when, and to the extent, they vest.
(3)Amounts reported in this column represent grants of RSUs under the SIP which vest in three equal installments on the first three anniversaries of the grant date. Vesting will be accelerated in certain circumstances as described below in the section "Potential Payouts Upon Termination or Change-in-Control". The RSUs accumulate cash dividend equivalents that are only paid upon vesting.
(4)Amounts reported in this column represent stock options granted under the SIP which become exercisable in four equal installments on the first four anniversaries of the grant date. Options become exercisable in certain circumstances as described below in the section "Potential Payouts Upon Termination or Change-in-Control". Each option has a maximum term of 10 years, subject to earlier termination in the event of the optionee's termination of employment.
(5)For stock awards, represents the grant date fair value of (a) RSUs based on the closing market price of our Class B Stock on the grant date and (b) PSUs based on a value of $139.82 per share computed using a Monte Carlo simulation based on the probable outcome of the performance condition as of the grant date. The Monte Carlo simulation was performed using the remaining performance period of 2.83 years and assuming an expected volatility of 34.97% and risk-free interest rate of 2.79%. The expected volatility was based on an analysis of the historical volatility of the Class B Stock on the grant date for 2.83 years. The risk-free interest rate corresponding with the remaining performance period was calculated using the U.S. Treasury (constant maturity) risk-free rates in effect on the grant date for a 2- and 3-year period. For option awards, represents the grant date fair value of stock options granted based on a value of $32.13 per share, calculated using the Black-Scholes option pricing model. The assumptions made in determining option values are disclosed in Note 9 to Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended May 31, 2023. Stock and option award values were computed in accordance with accounting guidance applicable to stock-based compensation.
OUTSTANDING EQUITY AWARDS AT MAY 31, 20202023
The following table sets forth information concerning outstanding stock options, and unvested restricted stockPSUs, and RSUs held by the Named Executive Officers at May 31, 2020.2023.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| OPTION AWARDS | | STOCK AWARDS |
NAME | NUMBER OF SECURITIES UNDERLYING UNEXERCISED OPTIONS EXERCISABLE (#) | NUMBER OF SECURITIES UNDERLYING UNEXERCISABLE OPTIONS (#)(1) | OPTION EXERCISE PRICE ($) | OPTION EXPIRATION DATE | | NUMBER OF SHARES OR UNITS OF STOCK THAT HAVE NOT VESTED (#)(2) | MARKET VALUE OF SHARES OR UNITS OF STOCK THAT HAVE NOT VESTED ($) | EQUITY INCENTIVE PLAN AWARDS: NUMBER OF UNEARNED SHARES, UNITS OR OTHER RIGHTS THAT HAVE NOT VESTED (#)(3) | EQUITY INCENTIVE PLAN AWARDS: MARKET OR PAYOUT VALUE OF UNEARNED SHARES, UNITS OR OTHER RIGHTS THAT HAVE NOT VESTED ($) |
John Donahoe II | 177,633 | 59,210(4) | 102.160 | 1/13/2030 | | | | | |
| 767,544 | — | 102.160 | 1/13/2030 | | | | | |
| 119,788 | 119,787(5) | 97.610 | 8/1/2030 | | | | | |
| 38,210 | 114,629(6) | 167.510 | 8/1/2031 | | | | | |
| — | 225,564(7) | 114.300 | 8/1/2032 | | 55,536 | 5,845,719 | 177,428 | 18,676,071 |
Matthew Friend | 23,000 | — | | 57.870 | 7/15/2026 | | | | | |
| 30,000 | — | | 59.100 | 7/20/2027 | | | | | |
| 35,000 | — | | 77.540 | 8/1/2028 | | | | | |
| 27,072 | 9,023(8) | 83.120 | 8/1/2029 | | | | | |
| 38,599 | 38,598(5) | 97.610 | 8/1/2030 | | | | | |
| 10,918 | 32,751(6) | 167.510 | 8/1/2031 | | | | | |
| — | 75,188(7) | 114.300 | 8/1/2032 | | 52,022 | 5,475,836 | 43,281 | 4,555,758 |
Andrew Campion | 75,000 | — | | 57.870 | 7/15/2026 | | | | | |
| 75,000 | — | | 59.100 | 7/20/2027 | | | | | |
| 80,000 | — | | 77.540 | 8/1/2028 | | | | | |
| 65,744 | 21,914(8) | 83.120 | 8/1/2029 | | | | | |
| 38,599 | 38,598(5) | 97.610 | 8/1/2030 | | | | | |
| 12,737 | 38,210(6) | 167.510 | 8/1/2031 | | | | | |
| — | 75,188(7) | 114.300 | 8/1/2032 | | 72,936 | 7,677,243 | 43,281 | 4,555,758 |
Heidi O'Neill | 25,000 | — | | 77.540 | 8/1/2028 | | | | | |
| 46,020 | 15,340(8) | 83.120 | 8/1/2029 | | | | | |
| 38,599 | 38,598(5) | 97.610 | 8/1/2030 | | | | | |
| 12,737 | 38,210(6) | 167.510 | 8/1/2031 | | | | | |
| — | 75,188(7) | 114.300 | 8/1/2032 | | 52,843 | 5,562,254 | 43,281 | 4,555,758 |
Mark Parker | 110,000 | — | | 31.675 | 7/19/2023 | | | | | |
| 330,000 | — | | 38.760 | 7/18/2024 | | | | | |
| 330,000 | — | | 56.400 | 7/17/2025 | | | | | |
| 165,000 | — | | 57.870 | 7/15/2026 | | | | | |
| 165,000 | — | | 59.100 | 7/20/2027 | | | | | |
| 175,000 | — | | 77.540 | 8/1/2028 | | | | | |
| 226,701 | 75,567(8) | 83.120 | 8/1/2029 | | | | | |
| 133,098 | 133,096(5) | 97.610 | 8/1/2030 | | | | | |
| 12,131 | 36,390(6) | 167.510 | 8/1/2031 | | | | | |
| — | 71,608(7) | 114.300 | 8/1/2032 | | — | | — | | — | | — | |
(1)Stock options generally become exercisable in four equal installments on each of the first four anniversaries of the grant date.
|
| | | | | | | | | | | | | | | | | |
| OPTION AWARDS | | STOCK AWARDS |
NAME | NUMBER OF SECURITIES UNDERLYING UNEXERCISED OPTIONS EXERCISABLE (#) |
| NUMBER OF SECURITIES UNDERLYING UNEXERCISABLE OPTIONS (#)(1) |
| | EQUITY INCENTIVE PLAN: NUMBER OF SECURITIES UNDERLYING UNEXERCISED UNEARNED OPTIONS (#) |
| | OPTION EXERCISE PRICE ($) |
| OPTION EXPIRATION DATE | | NUMBER OF SHARES OR UNITS OF STOCK THAT HAVE NOT VESTED (#) |
| | MARKET VALUE OF SHARES OR UNITS OF STOCK THAT HAVE NOT VESTED ($) |
|
John J. Donahoe II | — |
| 236,843 |
| (2) | | | 102.1600 |
| 1/13/2030 | | | | |
| — |
| — |
| | 767,544 |
| (3) | 102.1600 |
| 1/13/2030 | | 208,535 |
| (8) | 20,557,380 |
|
Mark G. Parker | 165,000 |
| — |
| | | | 17.2400 |
| 7/16/2020 | | | | |
| 660,000 |
| — |
| | | | 22.9250 |
| 7/15/2021 | | | | |
| 660,000 |
| — |
| | | | 23.2700 |
| 7/20/2022 | | | | |
| 330,000 |
| — |
| | | | 31.6750 |
| 7/19/2023 | | | | |
| 330,000 |
| — |
| | | | 38.7600 |
| 7/18/2024 | | | | |
| 330,000 |
| — |
| | | | 56.4000 |
| 7/17/2025 | | | | |
| 123,750 |
| 41,250 |
| (4) | | | 57.8700 |
| 7/15/2026 | | | | |
| 82,500 |
| 82,500 |
| (5) | | | 59.1000 |
| 7/20/2027 | | | | |
| 43,750 |
| 131,250 |
| (6) | | | 77.5400 |
| 8/1/2028 | | | | |
| — |
| 302,268 |
| (7) | | | 83.1200 |
| 8/1/2029 | | 333,034 |
| (9) | 32,830,492 |
|
Matthew Friend | 34,700 |
| — |
| | | | 31.6750 |
| 7/19/2023 | | | | |
| 41,000 |
| — |
| | | | 38.7600 |
| 7/18/2024 | | | | |
| 43,000 |
| — |
| | | | 56.4000 |
| 7/17/2025 | | | | |
| 17,250 |
| 5,750 |
| (4) | | | 57.8700 |
| 7/15/2026 | | | | |
|
| | | | | | | | | | | | | | | | | |
| OPTION AWARDS | | STOCK AWARDS |
NAME | NUMBER OF SECURITIES UNDERLYING UNEXERCISED OPTIONS EXERCISABLE (#) |
| NUMBER OF SECURITIES UNDERLYING UNEXERCISABLE OPTIONS (#)(1) |
| | EQUITY INCENTIVE PLAN: NUMBER OF SECURITIES UNDERLYING UNEXERCISED UNEARNED OPTIONS (#) |
| | OPTION EXERCISE PRICE ($) |
| OPTION EXPIRATION DATE | | NUMBER OF SHARES OR UNITS OF STOCK THAT HAVE NOT VESTED (#) |
| | MARKET VALUE OF SHARES OR UNITS OF STOCK THAT HAVE NOT VESTED ($) |
|
| 15,000 |
| 15,000 |
| (5) | | | 59.1000 |
| 7/20/2027 | | | | |
| 8,750 |
| 26,250 |
| (6) | | | 77.5400 |
| 8/1/2028 | | | | |
| — |
| 36,095 |
| (7) | | | 83.1200 |
| 8/1/2029 | | 24,011 |
| (10) | 2,367,004 |
|
Andrew Campion | 80,000 |
| — |
| | | | 38.7600 |
| 7/18/2024 | | | | |
| 120,000 |
| — |
| | | | 56.4000 |
| 7/17/2025 | | | | |
| 56,250 |
| 18,750 |
| (4) | | | 57.8700 |
| 7/15/2026 | | | | |
| 37,500 |
| 37,500 |
| (5) | | | 59.1000 |
| 7/20/2027 | | | | |
| 20,000 |
| 60,000 |
| (6) | | | 77.5400 |
| 8/1/2028 | | | | |
| — |
| 87,658 |
| (7) | | | 83.1200 |
| 8/1/2029 | | 131,007 |
| (11) | 12,914,670 |
|
Hilary K. Krane | 38,500 |
| — |
| | | | 31.6750 |
| 7/19/2023 | | | | |
| 110,000 |
| — |
| | | | 38.7600 |
| 7/18/2024 | | | | |
| 130,000 |
| — |
| | | | 56.4000 |
| 7/17/2025 | | | | |
| 52,500 |
| 17,500 |
| (4) | | | 57.8700 |
| 7/15/2026 | | | | |
| 35,000 |
| 35,000 |
| (5) | | | 59.1000 |
| 7/20/2027 | | | | |
| 20,000 |
| 60,000 |
| (6) | | | 77.5400 |
| 8/1/2028 | | | | |
| — |
| 87,658 |
| (7) | | | 83.1200 |
| 8/1/2029 | | 96,320 |
| (12) | 9,495,226 |
|
Monique Matheson | 16,500 |
| — |
| | | | 23.2700 |
| 7/20/2022 | | | | |
| 22,500 |
| — |
| | | | 31.6750 |
| 7/19/2023 | | | | |
| 38,000 |
| — |
| | | | 38.7600 |
| 7/18/2024 | | | | |
| 40,000 |
| — |
| | | | 56.4000 |
| 7/17/2025 | | | | |
| 15,000 |
| 5,000 |
| (4) | | | 57.8700 |
| 7/15/2026 | | | | |
| 20,000 |
| 20,000 |
| (5) | | | 59.1000 |
| 7/20/2027 | | | | |
| 18,750 |
| 56,250 |
| (6) | | | 77.5400 |
| 8/1/2028 | | | | |
| — |
| 87,658 |
| (7) | | | 83.1200 |
| 8/1/2029 | | 80,218 |
| (13) | 7,907,890 |
|
John F. Slusher | 115,000 |
| — |
| | | | 38.7600 |
| 7/18/2024 | | | | |
| 120,000 |
| — |
| | | | 56.4000 |
| 7/17/2025 | | | | |
| 48,750 |
| 16,250 |
| (4) | | | 57.8700 |
| 7/15/2026 | | | | |
| 35,000 |
| 35,000 |
| (5) | | | 59.1000 |
| 7/20/2027 | | | | |
| 18,750 |
| 56,250 |
| (6) | | | 77.5400 |
| 8/1/2028 | | | | |
| — |
| 87,658 |
| (7) | | | 83.1200 |
| 8/1/2029 | | 93,176 |
| (14) | 9,185,290 |
|
Elliott J. Hill | 90,000 |
| — |
| | | | 56.4000 |
| 7/17/2025 | | | | |
| 37,500 |
| 12,500 |
| (4) | | | 57.8700 |
| 7/15/2026 | | | | |
| 25,000 |
| 25,000 |
| (5) | | | 59.1000 |
| 7/20/2027 | | | | |
| 22,500 |
| 67,500 |
| (6) | | | 77.5400 |
| 8/1/2028 | | | | |
| — |
| 98,237 |
| (7) | | | 83.1200 |
| 8/1/2029 | | 118,426 |
| (15) | 11,674,435 |
|
Eric D. Sprunk | 160,000 |
| — |
| | | | 56.4000 |
| 7/17/2025 | | | | |
| 63,750 |
| 21,250 |
| (4) | | | 57.8700 |
| 7/15/2026 | | | | |
| 42,500 |
| 42,500 |
| (5) | | | 59.1000 |
| 7/20/2027 | | | | |
| 22,500 |
| 67,500 |
| (6) | | | 77.5400 |
| 8/1/2028 | | | | |
| — |
| 98,237 |
| (7) | | | 83.1200 |
| 8/1/2029 | | 133,551 |
| (16) | 13,165,458 |
|
(2)Reflects RSUs that vest as described in the table below: | | | | | | | | | | | |
NAME | FISCAL YEAR OF GRANT | NUMBER OF UNVESTED UNITS | VESTING SCHEDULE |
John Donahoe II | 2023 | 25,984 | RSUs subject to three-year pro-rata vesting on 8/1/2023, 8/1/2024, and 8/1/2025 |
| 2022 | 17,249 | RSUs subject to three-year pro-rata vesting; 50% of the remaining units vest on 8/1/2023 and 50% vest on 8/1/2024 |
| 2021 | 12,303 | RSUs subject to three-year pro-rata vesting; 100% of the remaining units vest on 8/1/2023 |
Matthew Friend | 2023 | 12,992 | RSUs subject to three-year pro-rata vesting on 8/1/2023, 8/1/2024, and 8/1/2025 |
| 2022 | 4,928 | RSUs subject to three-year pro-rata vesting; 50% of the remaining units vest on 8/1/2023 and 50% vest on 8/1/2024 |
| 2021 | 30,138 | RSUs subject to four-year pro-rata vesting; 50% of the remaining units vested on 6/1/2023 and 50% vest on 6/1/2024 |
| 2021 | 3,964 | RSUs subject to three-year pro-rata vesting; 100% of the remaining units vest on 8/1/2023 |
Andrew Campion | 2023 | 12,992 | RSUs subject to three-year pro-rata vesting on 8/1/2023, 8/1/2024, and 8/1/2025 |
| 2022 | 5,749 | RSUs subject to three-year pro-rata vesting; 50% of the remaining units vest on 8/1/2023 and 50% vest on 8/1/2024 |
| 2021 | 50,231 | RSUs subject to four-year pro-rata vesting; 50% of the remaining units vested on 6/1/2023 and 50% vest on 6/1/2024 |
| 2021 | 3,964 | RSUs subject to three-year pro-rata vesting; 100% of the remaining units vest on 8/1/2023 |
Heidi O'Neill | 2023 | 12,992 | RSUs subject to three-year pro-rata vesting on 8/1/2023, 8/1/2024, and 8/1/2025 |
| 2022 | 5,749 | RSUs subject to three-year pro-rata vesting, 50% of the remaining units vest on 8/1/2023 and 50% vest on 8/1/2024 |
| 2021 | 30,138 | RSUs subject to four-year pro-rata vesting, 50% of the remaining units vested on 6/1/2023 and 50% vest on 6/1/2024 |
| 2021 | 3,964 | RSUs subject to three-year pro-rata vesting; 100% of the remaining units vest on 8/1/2023 |
(3)Reflects PSUs that vest as described in the table below, assuming performance at the maximum level (200%) for the fiscal 2023 – 2025 PSUs and performance at the target level (100%) for the fiscal 2022 – 2024 PSUs. In each case, PSUs will be earned between 0% and 200% based on Relative TSR over the applicable three-year performance period and subject to the People & Planet modifier. | | | | | | | | | | | |
(1)NAME | Stock options generally become exercisable in four equal installmentsFISCAL YEAR OF PERFORMANCE PERIOD | NUMBER OF UNVESTED UNITS | VESTING SCHEDULE |
John Donahoe II | 2023 – 2025 | 146,624 | Earned units will cliff vest on each of the first four anniversaries of the grant date.8/1/2025 |
| 2022 – 2024 | 30,804 | Earned units will cliff vest on 8/1/2024 |
(2)Matthew Friend | 25% of these options2023 – 2025 | 37,120 | Earned units will cliff vest on January 13, 2021, 25%8/1/2025 |
| 2022 – 2024 | 6,161 | Earned units will cliff vest on January 13, 2022, 25%8/1/2024 |
Andrew Campion | 2023 – 2025 | 37,120 | Earned units will cliff vest on January 13, 2023, and 25%8/1/2025 |
| 2022 – 2024 | 6,161 | Earned units will cliff vest on January 13, 2024.8/1/2024 |
Heidi O'Neill | 2023 – 2025 | 37,120 | Earned units will cliff vest on 8/1/2025 |
| |
(3)2022 – 2024 | Subject to satisfaction of the performance vesting condition based on a 20% increase in the value of our Class B Stock from the value on the grant date (based on a 30-trading day average closing price divided by the closing price of a share on the grant date), 33.3% of these options6,161 | Earned units will cliff vest on January 13, 2021, 33.3% will vest on January 13, 2022, and 33.3% will vest on January 13, 2023. If the performance vesting condition has not been satisfied as of a tranche's vesting date, that tranche will instead vest upon satisfaction of the performance vesting condition.8/1/2024 |
| |
(4) | 100% of these options vested on July 15, 2020. |
(4)100% of these options will vest on January 13, 2024.
(5)50% of these options will vest on August 1, 2023 and 50% will vest on August 1, 2024.
(6)33.3% of these options will vest on August 1, 2023, 33.3% will vest on August 1, 2024, and 33.3% will vest on August 1, 2025.
(7)25% of these options will vest on August 1, 2023, 25% will vest on August 1, 2024, 25% will vest on August 1, 2025, and 25% will vest on August 1, 2026.
(8)100% of these options will vest on August 1, 2023.
20202023 PROXY STATEMENT 4748
| |
(5) | 50% of these options vested on July 20, 2020 and 50% will vest on July 20, 2021. |
| |
(6) | 33.3% of these options will vest on August 1, 2020, 33.3% will vest on August 1, 2021, and 33.3% will vest on August 1, 2022. |
| |
(7) | 25% of these options will vest on August 1, 2020, 25% will vest on August 1, 2021, 25% will vest on August 1, 2022, and 25% will vest on August 1, 2023. |
| |
(8) | 1,996 of these restricted shares will vest on September 17, 2020. 68,848 of these RSUs will vest on January 13, 2021, 68,846 of these RSUs will vest on January 13, 2022, and 68,845 of these RSUs will vest on January 13, 2023. |
| |
(9) | 19,740 of these restricted shares vested on July 20, 2020. An additional 21,494 of these RSUs will vest on August 1, 2020 and 21,494 of these restricted shares will vest on August 1, 2021. 16,042 of these RSUs will vest on August 1, 2020, and 16,041 of these RSUs will vest on August 1, 2021, and 16,041 of these RSUs will vest on August 1, 2022. An additional 222,182 of these RSUs vested on June 30, 2020. Includes 0 RSUs in respect of the performance-based RSUs that were earned at 0% based on fiscal 2016-2020 revenue growth and EPS growth and would have vested on June 30, 2020. |
| |
(10) | 1,128 of these restricted shares vested on July 20, 2020. 2,354 of these RSUs will vest on November 15, 2020. 13,352 of these RSUs will vest on June 10, 2021. 1,182 of these RSUs will vest on August 1, 2020, and 1,182 of these RSUs will vest on August 1, 2021. 1,605 of these RSUs will vest on August 1, 2020, 1,604 of these RSUs will vest on August 1, 2021, and 1,604 of these RSUs will vest on August 1, 2022. 15,070 of these RSUs will vest on June 1, 2021, 15,070 of these RSUs will vest on June 1, 2022, 15,069 of these RSUs will vest on June 1, 2023, and 15,069 of these RSUs will vest on June 1, 2024. |
| |
(11) | 5,640 of these restricted shares vested on July 20, 2020. 101,523 of these RSUs vested on July 20, 2020. 4,944 of these RSUs will vest on August 1, 2020, and 4,944 of these RSUs will vest on August 1, 2021. 4,653 of these RSUs will vest on August 1, 2020, 4,652 of these RSUs will vest on August 1, 2021 and 4,651 of these RSUs will vest on August 1, 2022. 25,116 of these RSUs will vest on June 1, 2021, 25,116 of these shares will vest on June 1, 2022, 25,116 of these RSUs will vest on June 1, 2023, and 25,115 of these RSUs will vest on June 1, 2024. |
| |
(12) | 4,794 of these restricted shares vested on July 20, 2020. 67,682 of these RSUs vested on July, 20, 2020. 4,944 of these RSUs will vest on August 1, 2020, and 4,944 of these RSUs will vest on August 1, 2021. 4,653 of these RSUs will vest on August 1, 2020, 4,652 of these RSUs will vest on August 1, 2021 and 4,651 of these RSUs will vest on August 1, 2022. An additional 40,185 of these RSUs will vest on June 1, 2023. |
| |
(13) | 3,243 of these restricted shares vested on July 20, 2020. 3,654 of these RSUs will vest on August 1, 2020, and 3,654 of these RSUs will vest on August 1, 2021. 4,653 of these RSUs will vest on August 1, 2020, 4,652 of these RSUs will vest on August 1, 2021 and 4,651 of these RSUs will vest on August 1, 2022. An additional 55,711 of these RSUs will vest on May 31, 2021, and 40,185 will vest on June 1, 2023. |
| |
(14) | 4,230 of these restricted shares vested on July 20, 2020. 67,682 of these RSUs vested on July, 20, 2020. 3,654 of these RSUs will vest on August 1, 2020, and 3,654 of these RSUs will vest on August 1, 2021. 4,653 of these RSUs will vest on August 1, 2020, 4,652 of these RSUs will vest on August 1, 2021 and 4,651 of these RSUs will vest on August 1, 2022. An additional 40,185 of these RSUs will vest on June 1, 2023. |
| |
(15) | 3,384 of these restricted shares vested on July 20, 2020. 88,654 of these RSUs vested on July, 17, 2020. 5,374 of these RSUs will vest on August 1, 2020, and 5,373 of these RSUs will vest on August 1, 2021. 5,214 of these RSUs will vest on August 1, 2020, 5,214 of these RSUs will vest on August 1, 2021, and 5,213 of these RSUs will vest on August 1, 2022. |
| |
(16) | 5,640 of these restricted shares vested on July 20, 2020. 101,523 of these RSUs vested on July, 17, 2020. 5,374 of these RSUs will vest on August 1, 2020, and 5,373 of these RSUs will vest on August 1, 2021. 5,214 of these RSUs will vest on August 1, 2020, 5,214 of these RSUs will vest on August 1, 2021, and 5,213 of these RSUs will vest on August 1, 2022. |
OPTION EXERCISES AND STOCK VESTED DURING FISCAL 20202023
The following table sets forth information concerning stock option exercises and vesting of restricted stockRSUs during fiscal 20202023 for each of the Named Executive Officers on an aggregated basis.
| | | | | | | | | | | | | | | | | |
| OPTION AWARDS | | STOCK AWARDS |
NAME | NUMBER OF SHARES ACQUIRED ON EXERCISE (#) | VALUE REALIZED ON EXERCISE ($) | | NUMBER OF SHARES ACQUIRED ON VESTING (#) | VALUE REALIZED ON VESTING ($) |
John Donahoe II | — | | — | | | 89,775 | 11,262,977 |
Matthew Friend | — | | — | | | 23,104 | 2,706,794 |
Andrew Campion | — | | — | | | 36,608 | 4,294,302 |
Heidi O'Neill | — | | — | | | 24,637 | 2,882,016 |
Mark Parker | 220,000 | 19,443,600 | | 16,041 | 1,833,486 |
|
| | | | | | | |
| OPTION AWARDS | | STOCK AWARDS |
NAME | NUMBER OF SHARES ACQUIRED ON EXERCISE (#) |
| VALUE REALIZED ON EXERCISE ($) |
| | NUMBER OF SHARES ACQUIRED ON VESTING (#) | VALUE REALIZED ON VESTING ($) |
John J. Donahoe II | — |
| — |
| | 2,050 | 175,009 |
Mark G. Parker | 495,000 |
| 37,335,095 |
| | 61,396 | 5,287,715 |
Matthew Friend | 30,000 |
| 2,119,014 |
| | 5,386 | 478,840 |
Andrew Campion | 180,000 |
| 12,227,100 |
| | 14,904 | 1,282,370 |
Hilary K. Krane | 71,500 |
| 4,454,945 |
| | 12,906 | 1,106,558 |
Monique Matheson | 58,500 |
| 4,350,961 |
| | 7,762 | 659,915 |
John F. Slusher | 220,000 |
| 14,472,776 |
| | 11,053 | 950,929 |
Elliott J. Hill | 214,100 |
| 13,429,041 |
| | 11,638 | 995,312 |
Eric D. Sprunk | 120,000 |
| 7,359,396 |
| | 15,334 | 1,318,111 |
EQUITY COMPENSATION PLAN INFORMATION
The following table summarizes information regarding outstanding optionsawards and shares available for future issuance under equity compensation plans approved by shareholders and equity compensation plans that were not approved by shareholders as of May 31, 2020.2023. The table does not reflect issuances made during fiscal 2021.2024.
| | | | | | | | | | | | | | | | | |
| NUMBER OF SECURITIES TO BE ISSUED UPON EXERCISE OF OUTSTANDING OPTIONS, WARRANTS AND RIGHTS | | WEIGHTED- AVERAGE EXERCISE PRICE OF OUTSTANDING OPTIONS, WARRANTS AND RIGHTS(1) | NUMBER OF SECURITIES REMAINING AVAILABLE FOR FUTURE ISSUANCE UNDER EQUITY COMPENSATION PLANS (EXCLUDING SECURITIES REFLECTED IN COLUMN (a)) | |
PLAN CATEGORY | (a) | | (b) | (c) | |
Equity compensation plans approved by shareholders | 79,340,157 | (2) | $94.3954 | | 94,321,128 | (3) |
Equity compensation plans not approved by shareholders | — | | | — | | 3,432,320 | (4) |
Total | 79,340,157 | | $94.3954 | | 97,753,448 | |
(1)Weighted-average exercise prices do not reflect the shares that will be used upon the payment of outstanding awards of RSUs.
(2)Consists of 79,340,157 shares subject to awards of options, RSUs, PSUs (based on performance at the target level of 100%), and stock appreciation rights outstanding under the SIP.
(3)Includes 92,459,174 shares available for future issuance under the SIP and 1,861,954 shares available for future issuance under the Employee Stock Purchase Plan.
(4)Consists of 3,432,320 shares available for future issuance under the Foreign Subsidiary Employee Stock Purchase Plan, pursuant to which shares are offered and sold to employees of selected non-U.S. subsidiaries of the Company on substantially the same terms as those offered to U.S. employees under the shareholder-approved Employee Stock Purchase Plan as described above under "Compensation Discussion and Analysis—Compensation of our Named Executive Officers—Other Compensation—Employee Stock Purchase Plan".
|
| | | | | | | | |
| NUMBER OF SECURITIES TO BE ISSUED UPON EXERCISE OF OUTSTANDING OPTIONS, WARRANTS AND RIGHTS |
| | WEIGHTED- AVERAGE EXERCISE PRICE OF OUTSTANDING OPTIONS, WARRANTS AND RIGHTS(1) |
| NUMBER OF SECURITIES REMAINING AVAILABLE FOR FUTURE ISSUANCE UNDER EQUITY COMPENSATION PLANS (EXCLUDING SECURITIES REFLECTED IN COLUMN (a)) | |
PLAN CATEGORY | (a) |
| | (b) |
| (c) | |
Equity compensation plans approved by shareholders | 94,763,732 |
| (2) |
| $60.9754 |
| 53,814,523 | (3) |
Equity compensation plans not approved by shareholders | — |
| | — |
| 5,431,497 | (4) |
Total | 94,763,732 |
| |
| $60.9754 |
| 59,246,020 | |
| |
(1) | Weighted-average exercise prices do not reflect the shares that will be used upon the payment of outstanding awards of RSUs. |
| |
(2) | Includes 94,763,732 shares subject to awards of options, RSUs, and stock appreciation rights outstanding under the Stock Incentive Plan (including the maximum number of performance-based RSUs granted to Mr. Parker). |
| |
(3) | Includes 46,441,872 shares available for future issuance under the Stock Incentive Plan and 7,372,651 shares available for future issuance under the Employee Stock Purchase Plan. |
| |
(4) | Includes 5,431,497 shares available for future issuance under the Foreign Subsidiary Employee Stock Purchase Plan, pursuant to which shares are offered and sold to employees of selected non-U.S. subsidiaries of the Company on substantially the same terms as those offered to U.S. employees under the shareholder-approved Employee Stock Purchase Plan as described above under "Compensation of our Named Executive Officers—Other Compensation—Employee Stock Purchase Plan". |
NON-QUALIFIED DEFERRED COMPENSATION IN FISCAL 20202023
| | | | | | | | | | | | | | | | | |
NAME | PLAN NAME | EXECUTIVE CONTRIBUTIONS IN FISCAL 2023(1) | AGGREGATE EARNINGS IN FISCAL 2023 | AGGREGATE WITHDRAWALS/ DISTRIBUTIONS IN FISCAL 2023 | AGGREGATE BALANCE AT MAY, 31 2023(2) |
John Donahoe II | DCP | — | $10,645 | — | $798,540 |
Matthew Friend | DCP | — | $(5,349) | — | $573,515 |
Andrew Campion | DCP | $461,539 | $36,035 | — | $3,860,874 |
Heidi O'Neill | DCP | $402,500 | $45,951 | — | $4,627,399 |
Mark Parker | DCP | $1,140,000 | $389,725 | — | $28,391,316 |
|
| | | | | | | | | | | | | | | |
NAME | PLAN NAME | EXECUTIVE CONTRIBUTIONS IN FISCAL 2020(1) |
| NIKE CONTRIBUTIONS IN FISCAL 2020(1) |
| AGGREGATE EARNINGS IN FISCAL 2020 |
| AGGREGATE WITHDRAWALS/ DISTRIBUTIONS IN FISCAL 2020 |
| AGGREGATE BALANCE AT MAY, 31 2020(1) |
|
John J. Donahoe II | DCP | $ | 63,695 |
| $ | — |
| $ | 35,211 |
| — |
| $ | 625,733 |
|
Mark G. Parker | DCP | $ | 1,243,339 |
| $ | 24,704 |
| $ | 516,549 |
| — |
| $ | 20,852,430 |
|
Matthew Friend | DCP | $ | — |
| $ | 9,503 |
| $ | 35,400 |
| — |
| $ | 461,523 |
|
Andrew Campion | DCP | $ | 273,077 |
| $ | 13,453 |
| $ | 152,737 |
| — |
| $ | 2,187,249 |
|
Hilary K. Krane | DCP | $ | 469,032 |
| $ | 13,250 |
| $ | 459,082 |
| — |
| $ | 5,806,035 |
|
Monique Matheson | DCP | $ | 606,098 |
| $ | 11,319 |
| $ | 208,050 |
| — |
| $ | 2,362,053 |
|
John F. Slusher | DCP | $ | 1,111,127 |
| $ | 11,386 |
| $ | 926,048 |
| — |
| $ | 12,757,055 |
|
Elliott J. Hill | DCP | $ | 380,769 |
| $ | 25,764 |
| $ | 417,213 |
| — |
| $ | 8,690,241 |
|
Eric D. Sprunk | DCP | $ | — |
| $ | 15,283 |
| $ | 975,107 |
| — |
| $ | 13,479,957 |
|
(1)All amounts reported in this column are also included in amounts reported in the Summary Compensation Table. | |
(1) | All amounts reported in the Executive Contributions column are also included in amounts reported in the Summary Compensation Table. The amounts reported in the NIKE Contributions column represent profit sharing contributions made by us in early fiscal 2020 based on fiscal 2019 results; these amounts are also included in amounts reported for fiscal 2019 in the All Other Compensation column of the Summary Compensation Table. Of the amounts reported in the Aggregate Balance column, the following amounts have been reported in the Summary Compensation Tables in this proxy statement or in prior year proxy statements: Mr. Donahoe, $63,695; Mr. Parker, $17,824,275; Mr. Friend, $9,503; Mr. Campion, $1,297,355; Ms. Krane, $1,244,848; Ms. Matheson, $617,417; Mr. Slusher, $2,794,490; Mr. Hill, $447,511; and Mr. Sprunk, $5,085,945. |
(2)Of the amounts reported in this column, the following amounts have been reported in the Summary Compensation Tables in this proxy statement or in prior year proxy statements: Mr. Donahoe, $63,695; Mr. Friend, $9,503; Mr. Campion, $2,445,433; Ms. O'Neill, $1,207,906; and Mr. Parker, $22,185,929.
NON-QUALIFIED DEFERRED COMPENSATION PLANS
The Named Executive Officers are eligible to participate in our Deferred Compensation Plan (the "DCP"). Participants in the DCP may elect in advance to defer up to 10075 percent of their annual base salary, and up to 100 percent of their bonus and long-term cash incentive payments.
Generally, weWe may make annual profit sharing contributions to defined contribution retirement plans. The contributions are allocated among eligible employees based on a percentage of their total salary and bonus for the year. To the fullest extent permitted under Internal Revenue Code limitations, these contributions are made to employees’employees' accounts under our qualified 401(k) Savings and Profit Sharing Plan. Contributions based on salary and bonus in excess of the tax law limit ($280,000305,000 for fiscal 2020)2023) are made as NIKE contributions under the DCP.
Amounts deferred under the DCP are credited to a participant’sparticipant's account under the DCP. Each participant may allocate his or her account among any combination of the investment fundsoptions available under the DCP. Participants’Participants' accounts are adjusted to reflect the investment performance of the fundsinvestment options selected by the participants. Participants can change the allocation of their account balances daily. The fundsinvestment options available under the DCP consist of 18 mutual funds with a variety of investment objectives.objectives and five risk-based portfolios. The investment fundsoptions had annual returns in fiscal 20202023 ranging from -14.51%-15.91% to 21.62%3.77%. Amounts credited to participants’participants' accounts are invested by us in actual investments matching the investment options selected by the participants to ensure that we do not bear any investment risk related to participants’participants' investment choices.
The portion of a participant’sparticipant's account attributable to elective deferrals, including investment returns, is fully vested at all times. The portion of a participant’sparticipant's account attributable to NIKE contributions, including investment returns, is fully vested after the participant has been employed by us for five years. All of the Named Executive Officers, other than Mr. Donahoe, are fully vested in their NIKE contributions.
Each time they elect to defer compensation, participants make an election regarding distribution of the compensation deferred under the election (as adjusted to reflect investment performance). A participant may elect for distribution to be made in a lump sum at the beginning of a predetermined year while the participant is still employed or in service (but no sooner than the fourth year after the year in which the distribution election is submitted). Alternatively, a participant may elect for distribution to be made in a lump sum or in quarterly installments over five, ten, or fifteen years after termination of employment or service. Participants have limited rights to change their distribution elections. Participants may make a hardship withdrawal under certain circumstances. Subject to certain limitations, a participant may also at any time request to withdraw amounts from his or her account balance that were vested as of December 31, 2004 (and any subsequent investment returns on such amount). If such request is approved, the participant may withdraw 90% of the amount requested, and the remaining 10% will be permanently forfeited.
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL
CHANGE-IN-CONTROL COMPENSATION — ACCELERATION OF EQUITY AWARDS
All unvested stock option, restricted stock,RSU, and RSUPSU awards are subject to accelerated vesting upon the occurrence of two events (a "double-trigger"): there is a "change-in-control"; and the Named Executive Officer’sOfficer's employment is terminated by us without "cause" or by the Named Executive Officer for "good reason", in each case between the change-in-control (or shareholder approval of the change-in-control, if earlier) and the second anniversary of the change-in-control. Stock options will be exercisable for four years following termination of employment, but not beyond each option’soption's original 10-year term. PSUs will vest at 100% of target. Accelerated vesting of stock options, RSUs, and RSUsPSUs will also occur if we are acquired and the acquiring company does not assume the outstanding options, RSUs, or RSUs.PSUs. For purposes of our stock awards, "change-in-control" is generally defined to include:
•the acquisition by any person of 50% or more of our outstanding Class A Stock or, if the Class A Stock no longer elects a majority of directors, the acquisition by any person of 30% or more of our total outstanding Common Stock,Stock;
•the nomination (and subsequent election) in a two-year period of a majority of our directors by persons other than the incumbent directors,directors;
•a sale of all or substantially all of our assets,assets; and
•an acquisition of NIKE through a merger, consolidation, or share exchange.
For purposes of our stock awards, "cause" generally includes willful and continued failure to substantially perform assigned duties and willful engagement in illegal conduct materially injurious to us, and "good reason" generally includes a material diminution in position or duties, a salary reduction or material reduction in other benefits, and a home office relocation of over 50 miles.
The following table shows the estimated benefits that would have been received by the Named Executive Officers if double-trigger accelerated vesting had occurred on May 31, 2020,2023, when the closing price of our Class B Stock was $98.58$105.26 per share.
| | | | | | | | | | | |
NAME | STOCK AWARD ACCELERATION(1) | STOCK OPTION ACCELERATION(2) | TOTAL |
John Donahoe II | $16,804,970 | $1,099,922 | $17,904,892 |
Matthew Friend | $8,077,969 | $495,044 | $8,573,013 |
Andrew Campion | $10,279,377 | $780,451 | $11,059,828 |
Heidi O'Neill | $8,164,388 | $634,903 | $8,799,291 |
Mark Parker | — | $2,691,237 | $2,691,237 |
|
| | | | | | | | | |
NAME | STOCK AWARD ACCELERATION(1) |
| STOCK OPTION ACCELERATION(2) |
| TOTAL |
|
John J. Donahoe II | $ | 20,360,615 |
| $ | — |
| $ | 20,360,615 |
|
Mark G. Parker | $ | 65,684,447 |
| $ | 12,370,952 |
| $ | 78,055,399 |
|
Matthew Friend | $ | 2,367,004 |
| $ | 1,936,611 |
| $ | 4,303,615 |
|
Andrew Campion | $ | 12,914,670 |
| $ | 4,861,406 |
| $ | 17,776,076 |
|
Hilary K. Krane | $ | 9,495,226 |
| $ | 4,711,818 |
| $ | 14,207,044 |
|
Monique Matheson | $ | 7,907,891 |
| $ | 3,531,843 |
| $ | 11,439,734 |
|
John F. Slusher | $ | 9,185,290 |
| $ | 4,582,031 |
| $ | 13,767,321 |
|
Elliott J. Hill | $ | 11,674,435 |
| $ | 4,434,819 |
| $ | 16,109,254 |
|
Eric D. Sprunk | $ | 13,165,458 |
| $ | 5,481,932 |
| $ | 18,647,390 |
|
(1)Information regarding unvested RSUs and PSUs held by each Named Executive Officer is set forth in the Outstanding Equity Awards table above. The amounts in the table above represent the number of unvested RSUs and PSUs (at 100% of target) multiplied by the closing price of our Class B Stock on May 31, 2023. | |
(1) | Information regarding unvested restricted stock and RSUs held by each Named Executive Officer is set forth in the Outstanding Equity Awards table above. The amounts in the table above represent the number of unvested restricted shares and RSUs (with Mr. Parker's Performance-Based RSUs calculated at 100% of target) multiplied by the closing price of our Class B Stock on May 31, 2020. |
| |
(2) | Information regarding outstanding unvested stock options held by each Named Executive Officer is set forth in the Outstanding Equity Awards table above. The amounts in the table above represent the aggregate value as of May 31, 2020 of those options using the excess of the per share closing price of our Class B Stock on May 31, 2020 over the per share exercise price, multiplied by the number of unvested option shares for each Named Executive Officer. |
(2)Information regarding outstanding unvested stock options held by each Named Executive Officer is set forth in the Outstanding Equity Awards table above. The amounts in the table above represent the aggregate value as of May 31, 2023 of those options using the excess of the per share closing price of our Class B Stock on May 31, 2023 over the per share exercise price, multiplied by the number of unvested option shares for each Named Executive Officer.
BENEFITS TRIGGERED ON CERTAIN EMPLOYMENT TERMINATIONS
STOCK OPTION ACCELERATION AND EXTENSION
As of May 31, 2020,2023, each Named Executive Officer held stock options as listed in the Outstanding Equity Awards table above. Under the terms of Mr. Donahoe's performance-based stock options, upon his death, disability, or termination without "cause", unvested options are deemed to have satisfied any continued employment requirement and have two years following termination of employment to vest relative to the performance metric, and vested options are exercisable for four years following termination of employment, but not beyond the original 10-year term. Under the terms applicable to all other stock options held by theeach Named Executive Officers,Officer, upon the death or disability of the holder, all unvested options will vest and are exercisable for four years following termination of employment, but not beyond each option’s original 10-year term. If death or disability (or with respect to Mr. Donahoe's performance-based stock options, a termination without "cause") of a Named Executive Officer had occurred on May 31, 2020, the aggregate value of those options would have been $0 for Mr. Donahoe, $12,370,952 for Mr. Parker, $1,936,611 for Mr. Friend, $4,861,406 for Mr. Campion, $4,711,818 for Ms. Krane, $3,531,843 for Ms. Matheson, $4,582,031 for Mr. Slusher, $4,434,819 for Mr. Hill, and $5,481,932 for Mr. Sprunk.
Under the terms of Mr. Donahoe's performance-based stock options, if he retires with at least 5 years of service (disregarding his years of service as a non-employee director prior to his employment), unvested options will be forfeited and vested options will be exercisable for four years following termination of employment, but not beyond the option’seach option's original 10-year term. If death or disability of a Named Executive Officer had occurred on May 31, 2023, the aggregate value of those options is as set forth in the "Stock Option Acceleration" column of the Change-in-Control Compensation – Acceleration of Equity Awards table above.
Under the terms applicableof the stock options held by each Named Executive Officer that were granted after fiscal 2020, upon a termination of employment due to a "divestiture" or "reduction in force" that occurs at least six months following the grant date, and subject to the holder signing a general waiver and release of claims, options that are scheduled to vest within one year following the termination will vest and all othervested options will be exercisable for one year following termination of employment, but not beyond each option's original 10-year term. The value of the unvested stock options held by each Named Executive Officer as of May 31, 2023 that would have become vested if a termination due to a "divestiture" or "reduction in force" had occurred on that date is $458,189 for Mr. Donahoe, $147,637 for each of Messrs. Friend and Campion and Ms. O'Neill, and $509,092 for Mr. Parker.
Under the terms of all the stock options held by the Named Executive Officers, options that have been outstanding for at least one year will be subject to continued vesting if the holder retires after reaching age 55 with at least 5 years of service (or accelerated vesting if the holder retires after reaching age 60 with at least 5 years of service), and vested options will be exercisable for four years following termination of employment, but not beyond each option’soption's original 10-year term. If the Named Executive Officers had retired on May 31, 2020,2023, the aggregate value of stock options subject to retirement vesting would have been $0$1,099,922 for Mr. Donahoe, $7,697,888$634,903 for Ms. O'Neill, and $2,691,237 for Mr. Parker, $3,356,625 for Ms. Krane, $2,916,075 for Mr. Hill, and $3,963,188 for Mr. Sprunk.Parker. Messrs. Friend Campion, and Slusher and Ms. MathesonCampion are not eligible for retirement vesting because these Named Executive Officers have not reached age 55.
STOCK AWARD ACCELERATION
As of May 31, 2020, each2023, the Named Executive OfficerOfficers held unvested restricted stock and/or RSUs and PSUs as set forth in the Outstanding Equity Awards table above. Under the terms of their award agreements, all unvested restricted sharesRSUs and RSUsPSUs will immediately vest fully upon the death or disability of the holder, except that performance-based RSUs held by Mr. Parker would vestwith PSUs vesting at the threshold amount.100% of target. The value of the unvested restricted sharesRSUs and RSUsPSUs held by each Named Executive Officer as of May 31, 20202023 that would have become vested if death or disability had occurred on that date is as set forth in the "Stock Award Acceleration" column of the Change-in-Control Compensation — Acceleration of Equity Awards table above, exceptabove.
Under the terms of the RSUs that were granted to the amountNamed Executive Officers after fiscal 2020 (excluding the stock-based transition awards granted to Messrs. Friend and Campion and Ms. O'Neill) and all PSUs held by the Named Executive Officers, upon a termination of employment due to a "divestiture" or "reduction in force" that occurs at least six months following the grant date, and subject to the holder signing a general waiver and release of claims, RSUs and PSUs that are scheduled to vest within one year following the termination will vest, with PSUs vesting at 100% of target. The value of the unvested RSUs and PSUs held by each Named Executive Officer as of May 31, 2023 that would have become vested if a termination due to a "divestiture" or "reduction in force" had occurred on that date is $3,114,644 for Mr. Parker would be $49,257,470.Donahoe, $1,132,493 for Mr. Friend, $1,175,755 for each of Mr. Campion and Ms. O'Neill, and $0 for Mr. Parker.
PAYMENTS UNDER NONCOMPETITION AGREEMENTS
We have a noncompetition agreement with Mr. Donahoe that extends for eighteen18 months following the termination of his employment with us and a noncompetition agreement with Mr. Parker that extends for two years following the termination of his
employment with us. Under these agreements, if Mr. Donahoe's employment is terminated by us without "cause" (as defined in his agreement), or if Mr. Parker’sParker's employment is terminated by us, we will make monthly payments to the executive during the noncompetition period in an amount equal to one-twelfth of his then current annual salary and target PSP award ("Annual NIKE Income"). The agreements provide further that if the executive voluntarily resigns, we will make monthly payments to him during the noncompetition period in an amount equal to one-twenty-fourth of his then current Annual NIKE Income. However, commencement of the above-described monthly payments will be delayed until after the six-month period following the executive's separation from service, and all payments that he would otherwise have received during that period will be paid in a lump sum promptly following the end of the period, together with interest at the prime rate. If employment is terminated without "cause" (as defined in the applicable agreement), the parties may mutually agree to waive the covenant not to compete, and if employment is terminated for "cause", we may unilaterally waive the covenant. If the covenant is waived, we will not be required to make the payments described above for the months as to which the waiver applies. Assuming that Mr. Donahoe's employment had been terminated on May 31, 20202023 and the covenant was not waived, during the 18-month period ending November 30, 20212024 we would have been required to pay Mr. Donahoe $375,000 per month if the termination was by us without "cause", or $187,500 per month if he had voluntarily resigned. Assuming that Mr. Parker's employment had been terminated on May 31, 20202023 and the covenant was not waived, during the 24-month period ending May 31, 20222025 we would have been required to pay Mr. Parker $425,000$83,333 per month if the termination was by us, or $212,500$41,667 per month if he had voluntarily resigned.
We have noncompetition agreements with each of the other Named Executive Officers on generally the same terms as Mr. Donahoe, except that the noncompetition period is one year, we may unilaterally waive the covenant in all cases (including a termination without "cause"), the monthly payments are one-twelfth or one-twenty-fourth of the executive's then current annual salary (instead of their Annual NIKE Income), and payments may commence on termination. Assuming that the employment of each of these Named Executive Officers had been terminated by us without "cause" on May 31, 20202023 and the covenants werecovenant was not waived, during the 12-month period ending May 31, 2024 we would have been required to pay Mr. Friend $72,917, Mr. Campion $91,667, Ms. Krane $91,667, Ms. Matheson $91,667, Mr. Slusher $91,667, Mr. Hill $100,000, and Mr. Sprunk $100,000, each on a monthly basis forthem $104,167 per month if the 12-month period ending May 31, 2021. Assuming that each of these Named Executive Officerstermination was by us without "cause", or $52,083 per month if they had voluntarily resigned on May 31, 2020 and the covenants were not waived, we would have been required to pay Mr. Friend $36,458, Mr. Campion $45,833, Ms. Krane $45,833, Ms. Matheson $45,833, Mr. Slusher $45,833, Mr. Hill $50,000, and Mr. Sprunk $50,000, each on a monthly basis for the 12-month period ending May 31, 2021.resigned.
CEO PAY RATIO
NIKE's pay and benefits are designed to be competitive and equitable, meet the diverse needs of our global teammates, and reinforce our values. We pay for performance and impact by linking incentive pay to companyCompany performance and seek to invest in positive experiences that have the greatest impact on the engagement and wellbeingwell-being of our employees. The executive compensation program is highly incentive-based and weighted towards long-term awards to emphasize long-term performance
and support retention. Our executive compensation program is designed to attract and retain top-tier talent in a competitive market and to "pay for performance" in order to drive business results and maximize shareholder value.
For fiscal 2020,2023, our last completed fiscal year:
•The employee identified at the median of all NIKE employees (other than our CEO) was a retail store employee in the United States;Canada;
•The annual total compensation of the median employee was $28,142;$33,646;
•The annual total compensation of our CEO, Mr. Donahoe, was $54,451,903;$32,789,885; and
•The estimated ratio of the annual total compensation of our CEO to the median annual total compensation of all other NIKE employees was 1935975 to 1.
This pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules based on the methodology described below. The SEC rules for identifying the median compensated employee and calculating the pay ratio allow companies to adopt a variety of methodologies, apply certain exclusions, and make reasonable estimates and assumptions that reflect their compensation practices. As such, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies may utilize different methodologies, exclusions, estimates, and assumptions in calculating their own pay ratios.
CEO
Mr. Donahoe became President and CEO of NIKE on January 13, 2020. As permitted by SEC rules, in calculating this pay ratio we annualized Mr. Donahoe's fiscal 2020 compensation by utilizing his annual base salary. No other adjustments were made to Mr. Donahoe's fiscal 2020 compensation as reported in the Summary Compensation Table.
MEDIAN EMPLOYEEMETHODOLOGY
For purposes of calculating this pay ratio, we used the same median employee that was identified in fiscal 2019,2022, as we believe there has been no change in our employee population, our compensation arrangements, or our median employee's circumstances that would significantly affect our pay ratio disclosure. The determination of the median employee was made in fiscal 20192022 using the methodology described below, and the median employee's fiscal 20202023 annual total compensation was calculated based on the Summary Compensation Table rules used for our Named Executive Officers (in accordance with Item 402(c)(2)(x) of Regulation S-K).
2019FISCAL 2022 METHODOLOGY
We selecteduse the first business day in May 1, 2019 as the date to determine the median employee. The first business day in May for fiscal 2022 was May 2, 2022. At that time, we had approximately 75,10977,239 employees globally. After applying the "de minimis exemption" under the SEC rules, which permits us to exclude non-U.S. employees accounting for 5% or less of our total employee population, we excluded the 3,7523,656 employees in the jurisdictions identified below, and our employee population consisted of approximately 71,35773,583 employees.
| | Slovakia | 1 | | Hungary | 74 | | Vietnam | 193 | |
Slovenia | 1 | | Sweden | 83 | | Greece | 201 | Slovenia | 1 | | Denmark | 68 | | Malaysia | 206 |
Sri Lanka | | Sri Lanka | 4 | | Uruguay | 71 | | Thailand | 206 |
United Arab Emirates | 5 | | Indonesia | 88 | | Israel | 204 | United Arab Emirates | 5 | | Czech Republic | 73 | | South Africa | 207 |
Sri Lanka | 6 | | Czech Republic | 89 | | Austria | 205 | |
Croatia | | Croatia | 6 | | Hungary | 82 | | Vietnam | 252 |
Philippines | 23 | | Denmark | 90 | | Portugal | 209 | Philippines | 19 | | Indonesia | 85 | | Israel | 266 |
Croatia | 25 | | India | 99 | | South Africa | 212 | |
Macao | 34 | | Switzerland | 112 | | Poland | 238 | |
Macau | | Macau | 42 | | Ireland | 87 | | Poland | 276 |
New Zealand | 53 | | Ireland | 121 | | Turkey | 445 | New Zealand | 44 | | Switzerland | 113 | | Chile | 285 |
Uruguay | 67 | | Malaysia | 167 | | Hong Kong | 454 | |
Norway | 71 | | Thailand | 182 | | Norway | 45 | | Greece | 135 | | Hong Kong | 323 |
Sweden | | Sweden | 55 | | Portugal | 148 | | Turkey | 340 |
Brazil | | Brazil | 61 | | Austria | 151 | |
Of the 71,35773,583 employees included in the CEO Pay Ratio calculation, approximately 72%75% were full-time, 53%49% were in retail jobs, and 51% were located in the United States.
To identify our median employee we calculated annual compensation for fiscal 20192022 based on base salary or hourly wages, as applicable. For the majority of our employees, base salary or hourly wages comprise the majority of their compensation. To determine wages for hourly employees, we used each individual’sindividual's pay rate and estimated scheduled hours in the applicable Human Resources system of record.
After determining the annual compensation for our employee population as described above, we identified a subset of approximately 100 individuals representing the potential median employee population. For this subset, we calculated each employee’semployee's annual total compensation in U.S. dollars for fiscal 20192022 based on the Summary Compensation Table rules used for our Named Executive Officers (in accordance with Item 402(c)(2)(x) of Regulation S-K). Compensation for permanent employees hired during the fiscal year was annualized, compensation for non-U.S. employees was converted into U.S. dollars using the applicable currency conversion rate as reported in the Human Resources system of record for the median employee determination date, and the median employee was then selected from the subset to determine the CEO Pay Ratio.
this subset.
PAY VERSUS PERFORMANCE
This disclosure has been prepared in accordance with Item 402(v) of Regulation S-K under the Exchange Act and does not necessarily reflect how the Compensation Committee evaluates compensation decisions in light of Company or individual performance. The Compensation Committee did not consider the pay versus performance disclosure below in making its compensation decisions for any of the fiscal years shown. For discussion of how the Compensation Committee seeks to align pay with performance when making compensation decisions, please review the section above titled "Compensation Discussion and Analysis".
PAY VERSUS PERFORMANCE TABLE
The following table sets forth compensation information of our CEO and our non-CEO NEOs and Company performance for the fiscal years listed below, in accordance with Item 402(v) of Regulation S-K.
| | | | | | | | | | | | | | | | | | | | | | | | | | |
YEAR | SUMMARY COMPENSATION TABLE TOTAL FOR CEO(1)(2) | COMPENSATION ACTUALLY PAID TO CEO(1)(3) | AVERAGE SUMMARY COMPENSATION TABLE TOTAL FOR NON-CEO NEOs(1)(4) | AVERAGE COMPENSATION ACTUALLY PAID TO NON-CEO NEOs(1)(5) | VALUE OF INITIAL FIXED $100 INVESTMENT BASED ON | NET INCOME(7) (IN MILLIONS) | ADJUSTED REVENUE(8) (IN MILLIONS) |
TOTAL SHAREHOLDER RETURN(6) | PEER GROUP TOTAL SHAREHOLDER RETURN(6) |
2023 | $32,789,885 | $29,391,856 | $10,117,055 | $7,259,680 | $109.51 | $116.84 | $5.070 | $52.593 |
2022 | $28,838,060 | $19,617,425 | $9,185,111 | $7,482,733 | $122.26 | $120.40 | $6.046 | $47.406 |
2021 | $32,920,708 | $77,444,844 | $17,107,315 | $28,986,814 | $139.58 | $141.30 | $5.727 | $43.769 |
(1) John Donahoe II served as the Company's CEO for each fiscal year presented. The individuals comprising the non-CEO NEOs for each fiscal year presented are Matthew Friend, Andrew Campion, Heidi O'Neill, and Mark Parker.
(2) Represents the amount of total compensation reported for our CEO, Mr. Donahoe, in the "Total" column of the "Summary Compensation Table" for each fiscal year presented.
(3) The dollar amounts reported in the "Compensation Actually Paid to CEO" column have been calculated in accordance with Item 402(v) of Regulation S-K and do not reflect compensation actually earned, realized, or received by the CEO. These amounts reflect the amount set forth in the "Total" column of the "Summary Compensation Table" for each fiscal year presented, with certain adjustments as described in the table below, in accordance with the requirements of Item 402(v) of Regulation S-K:
| | | | | | | | | | | | | | |
| | 2023 | 2022 | 2021 |
| Summary Compensation Table ("SCT") total for CEO | $32,789,885 | $28,838,060 | $32,920,708 |
| Deduction for amounts reported under the "Stock Awards" column in the SCT | $13,220,455 | $12,061,812 | $3,602,980 |
| Deduction for amounts reported under the "Option Awards" column in the SCT | $7,247,371 | $6,782,995 | $5,402,416 |
| Total deductions from SCT | $20,467,826 | $18,844,807 | $9,005,396 |
| Year end fair value of equity awards | $17,801,878 | $9,719,590 | $17,094,821 |
| Change in fair value of outstanding and unvested equity awards | $(4,440,691) | $(6,894,427) | $23,324,355 |
| Change in fair value of equity awards granted in prior years that vested in the year | $3,461,158 | $6,578,196 | $12,885,143 |
| Value of dividends on stock awards | $247,452 | $220,812 | $225,212 |
| Total adjustments | $17,069,797 | $9,624,172 | $53,529,532 |
| Compensation actually paid | $29,391,856 | $19,617,425 | $77,444,844 |
Equity valuations: Stock option grant date fair values are calculated based on the Black-Scholes option pricing model as of the grant date; adjustments have been made using stock option fair values as of each measurement date using the stock price as of the measurement date and updated assumptions (i.e., term, volatility, dividend yield, risk free rates) as of the measurement date. PSU grant date fair values are calculated using a Monte Carlo simulation based on the probable outcome of the performance condition as of the grant date; adjustments have been made using a revised Monte Carlo valuation as of fiscal year end. RSU grant date fair values are calculated using the stock price as of the grant date; adjustments have been made using the stock price as of fiscal year end and as of each vesting date.
(4) Represents the average of the amounts of total compensation reported for our non-CEO NEOs, as a group, in the "Total" column of the "Summary Compensation Table" for each fiscal year presented.
(5) The dollar amounts reported in the "Average Compensation Actually Paid to Non-CEO NEOs" column have been calculated in accordance with Item 402(v) of Regulation S-K and do not reflect compensation actually earned, realized, or received by the non-CEO NEOs. These amounts reflect the average of the amounts set forth in the "Total" column of the "Summary Compensation Table" for each fiscal year presented for the applicable non-CEO NEOs, with certain adjustments as described in the table below, in accordance with the requirements of Item 402(v) of Regulation S-K:
2023 PROXY STATEMENT 5354
| | | | | | | | | | | | | | |
| | 2023 | 2022 | 2021 |
| Average Summary Compensation Table total for non-CEO NEOs | $10,117,055 | $9,185,111 | $17,107,315 |
| Deduction for amounts reported under the "Stock Awards" column in the SCT | $3,060,034 | $2,191,148 | $6,370,788 |
| Deduction for amounts reported under the "Option Awards" column in the SCT | $2,387,034 | $2,153,362 | $2,806,263 |
| Total deductions from SCT | $5,447,068 | $4,344,510 | $9,177,051 |
| Year end fair value of equity awards | $4,815,268 | $2,257,926 | $15,020,734 |
| Change in fair value of outstanding and unvested equity awards | $(1,929,436) | $(2,839,461) | $6,098,187 |
| Change in fair value of equity awards granted in prior years that vested in the year | $(373,621) | $3,134,180 | $(186,300) |
| Value of dividends on stock awards | $77,482 | $89,487 | $123,929 |
| Total adjustments | $2,589,693 | $2,642,132 | $21,056,550 |
| Average compensation actually paid | $7,259,680 | $7,482,733 | $28,986,814 |
Equity valuations: Stock option grant date fair values are calculated based on the Black-Scholes option pricing model as of the grant date; adjustments have been made using stock option fair values as of each measurement date using the stock price as of the measurement date and updated assumptions (i.e., term, volatility, dividend yield, risk free rates) as of the measurement date. PSU grant date fair values are calculated using a Monte Carlo simulation based on the probable outcome of the performance condition as of the grant date; adjustments have been made using a revised Monte Carlo valuation as of fiscal year end. RSU grant date fair values are calculated using the stock price as of the grant date; adjustments have been made using the stock price as of fiscal year end and as of each vesting date.
(6) Peer group total shareholder return ("TSR") uses the Dow Jones U.S. Footwear Index, which the Company also uses in the stock performance graph required by Item 201(e) of Regulation S-K included in the Company's Annual Report on Form 10-K for fiscal 2023. These comparisons assume $100 (including reinvested dividends) was invested for the period starting May 31, 2020 through the end of the listed fiscal year in (a) the Company and (b) the Dow Jones U.S. Footwear Index, respectively. Historical stock performance is not necessarily indicative of future stock performance.
(7) Reflects net income calculated in accordance with generally accepted accounting principles ("GAAP") in the Company's Consolidated Statements of Income included in the Company's Annual Reports on Form 10-K for the applicable fiscal year.
(8) Reflects Adjusted Revenue calculated based on GAAP revenue excluding the impact of acquisitions and divestitures; changes in accounting principles; unanticipated restructurings; unanticipated exchange rate fluctuations; other extraordinary, unusual, or infrequently occurring items; and the unanticipated impact from Nike Virtual Studios and RTFKT. We determined Adjusted Revenue to be the most important financial performance measure used to link Company performance to compensation actually paid ("CAP") to our CEO and non-CEO NEOs in fiscal 2023, as required pursuant to Item 402(v) of Regulation S-K. This performance measure may not have been the most important financial performance measure for prior fiscal years, and we may determine a different financial performance measure to be the most important financial performance measure in future years.
DESCRIPTION OF RELATIONSHIPS
The following charts show graphically the relationships over the past three fiscal years of the CAP amounts for our CEO and non-CEO NEOs as compared to our cumulative TSR, peer group TSR, GAAP net income, and Adjusted Revenue as well as the relationship between TSR and peer group TSR.
CAP VERSUS COMPANY TSR & PEER GROUP TSR
CAP VERSUS NET INCOME
CAP VERSUS ADJUSTED REVENUE
TABULAR LIST OF PERFORMANCE METRICS
The following table lists the three financial performance measures that, in the Company's assessment, represent the most important performance measures used to link CAP for our NEOs to Company performance for fiscal 2023.
| | |
Adjusted Revenue |
Adjusted EBIT |
Stock price |
.
| | | | | |
| |
PROPOSAL 3 FREQUENCY OF ADVISORY VOTES ON EXECUTIVE COMPENSATION |
|
In accordance with the requirements of Section 14A of the Exchange Act, we are submitting to shareholders an advisory vote on whether to present our advisory "say-on-pay proposal" to shareholders every one year, every two years, or every three years. Under Exchange Act rules, we are required to present this "say-on-pay vote frequency proposal" at least once every six years. When shareholders last voted on a say-on-pay vote frequency proposal, at the 2017 Annual Meeting of Shareholders, the Board recommended holding a say-on-pay vote annually, and approximately 94% of the votes cast were voted in favor of holding such a vote annually. The Board continues to value shareholder feedback on our executive compensation program, and believes that an annual say-on-pay vote offers a strong mechanism for all shareholders to provide timely input on the Company's executive compensation practices and policies. Because your vote is advisory, it will not be binding on the Board. However, the Board values shareholder opinions, and will take into account the outcome of the vote when considering the frequency of future say-on-pay votes. |
|
BOARD RECOMMENDATION |
| The Board of Directors recommends that shareholders vote for future shareholder advisory votes on executive compensation to be held every 1 YEAR. |
| |
AUDIT MATTERSCLAWBACK
We maintain a clawback policy for the recoupment of incentive compensation. Under the clawback policy, an executive officer who is involved in wrongful conduct that results in a restatement of the Company's financial statements must repay to the Company up to the full amount of any incentive compensation that was paid based on the financial statements that were subsequently restated. The clawback policy covers PSP awards, LTIP awards, SIP awards (based on excess proceeds from pre-restatement sales of stock acquired pursuant to the stock-based awards), and profit sharing contributions to the Deferred Compensation Plan. In addition to the clawback policy, the PSP, LTIP, and SIP also specify that the Committee may apply further clawback requirements to awards through additional clawback policies or award agreement provisions, and that all awards are subject to clawback requirements under applicable law and regulation. The Company will adopt a revised clawback policy regarding accounting restatements in connection with the SEC's adoption of new rules to implement Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, once such final rules, as implemented by NYSE, become effective. |
| | | | | |
| | | | | |
PROPOSAL 3 RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM |
|
The Audit & Finance Committee of the Board of Directors has sole authority to retain, with shareholder ratification, the Company’s independent registered public accounting firm. The Audit & Finance Committee directly oversees the firm’s work with respect to the annual audit of the Company’s consolidated financial statements and internal control over financial reporting and approves all audit engagement fees and terms. At least annually, the Audit & Finance Committee evaluates the independent registered public accounting firm’s qualifications, performance, and independence, including a review and evaluation of its lead partner. The Audit & Finance Committee is also involved in the selection of the new lead engagement partner following mandated rotation of the firm’s lead partner, and is responsible for considering the benefits of rotation of the Company’s independent registered public accounting firm. The Audit & Finance Committee has appointed PricewaterhouseCoopers LLP to audit the Company’s consolidated financial statements and internal control over financial reporting for the fiscal year ending May 31, 2021 and to render other professional services as required. PricewaterhouseCoopers LLP has served as the Company’s independent registered public accounting firm for many years. The Audit & Finance Committee and the Board of Directors believe that the continued retention of PricewaterhouseCoopers LLP as the independent registered public accounting firm is in the best interests of the Company and its shareholders. Accordingly, the Audit & Finance Committee is submitting the appointment of PricewaterhouseCoopers LLP to shareholders for ratification. If the appointment is not ratified by our shareholders, the Audit & Finance Committee may reconsider whether it should appoint another independent registered public accounting firm. Representatives of PricewaterhouseCoopers LLP will be present at the Annual Meeting, will have the opportunity to make a statement if they desire to do so, and are expected to be available to respond to questions. Aggregate fees billed by the Company’s independent registered public accounting firm, PricewaterhouseCoopers LLP, for audit services related to the most recent two fiscal years, and for other professional services incurred in the most recent two fiscal years, were as follows: |
| TYPE OF SERVICE | 2020 | 2019 | |
| Audit Fees(1) | $21.0 million | $21.8 million | |
| Audit-Related Fees(2) | 0.1 million | 0.1 million | |
| Tax Fees(3) | 0.6 million | 1.4 million | |
| All Other Fees(4) | 0.7 million | 0.3 million | |
| Total | $22.4 million | $23.6 million | |
(1) Comprises the audits of the Company’s annual financial statements and internal controls over financial reporting, and reviews of the Company’s quarterly financial statements, as well as statutory audits of Company subsidiaries, attest services and consents to SEC filings. (2) Comprises services including consultations regarding financial accounting and reporting. (3) Comprises services for tax compliance, tax planning and tax advice. Tax compliance includes services for compliance related tax advice, as well as the preparation and review of both original and amended tax returns for the Company and its consolidated subsidiaries. Tax compliance related fees represented $0.2 million of the tax fees for both fiscal 2020 and 2019. The remaining tax fees primarily include tax advice. (4) Comprises other miscellaneous services. |
In accordance with the Sarbanes-Oxley Act of 2002, the Audit & Finance Committee established policies and procedures under which all audit and non-audit services performed by the Company’s independent registered public accounting firm must be approved in advance by the Audit & Finance Committee. During fiscal 2020, all such services performed by, and fees paid to, PricewaterhouseCoopers LLP were approved in advance. During fiscal 2019, PricewaterhouseCoopers LLP was engaged to be paid fees totaling $2,500, or less than 0.1% of total fees, for one service that was not pre-approved. Such service was approved by the Audit & Finance Committee promptly after its inadvertent omission from pre-approval was noticed. |
BOARD RECOMMENDATION |
| The Board of Directors recommends that shareholders vote FOR ratification of the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for the fiscal year ending May 31, 2021. |
| | | | | |
At the Compensation Committee's request, management prepared an assessment of potential risks associated with the Company's fiscal 2023 compensation programs, including any risk that would be reasonably likely to have a material adverse effect on the Company. This included an assessment of risks associated with each element of executive compensation. The assessment considered certain design features of the compensation program that reduce the likelihood of excessive risk taking, such as reasonable performance targets, capped incentive compensation payouts, a balance of short- and long-term incentives, a balance of cash- and stock-based incentives, vesting of awards over time, and the potential for clawback of incentive compensation. In addition, for stock-based compensation, we have adopted stock ownership guidelines, provided for limited accelerated vesting of PSUs, stock options, and RSUs upon termination of employment, and provided for only double-trigger accelerated vesting of stock-based awards upon a change in control. The Compensation Committee reviewed the risk assessment and concluded that our compensation programs and practices do not create risks that are reasonably likely to have a material adverse effect on the Company.
TAX DEDUCTIBILITY OF EXECUTIVE COMPENSATION
Section 162(m) of the Internal Revenue Code generally places a $1 million limit on the amount of compensation a company can deduct in any one year for "covered employees". While the Compensation Committee seeks to preserve tax deductibility in developing and implementing our executive compensation program, the committee also believes that it is important to maintain flexibility in administering compensation programs in a manner designed to promote varying corporate goals and the interests of our shareholders. Accordingly, we have not adopted a policy that all compensation must qualify as deductible for tax purposes and retain the ability to provide compensation that may not qualify as deductible under Section 162(m).
COMPENSATION COMMITTEE REPORT OF THE AUDIT & FINANCE COMMITTEE
The Audit & FinanceCompensation Committee has:
Reviewedof the Board of Directors has reviewed and discussed with management the audited financial statements with management.
Discussed with the independent auditors the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board ("PCAOB")Compensation Discussion and the SEC.
Received the written disclosures and the letter from the independent accountantsAnalysis required by applicable requirementsItem 402(b) of the PCAOB regarding the independent accountants’ communications concerning independence, and has discussed with the independent accountant the independent accountant’s independence.
Regulation S-K. Based on the review and discussions, above,the Compensation Committee recommended to the Board of Directors that the audited financial statementsCompensation Discussion and Analysis be included in this proxy statement.
Members of the Company’sCompensation Committee:
•Timothy Cook, Chair
•Cathleen Benko
•Mónica Gil
EXECUTIVE COMPENSATION TABLES
SUMMARY COMPENSATION TABLE
The following table sets forth information concerning the total compensation of each Named Executive Officer for fiscal years 2023, 2022, and 2021.
| | | | | | | | | | | | | | | | | | | | | | | | | | |
NAME AND PRINCIPAL POSITION(1) | YEAR | SALARY ($) | BONUS(2) ($) | STOCK AWARDS(3) ($) | OPTION AWARDS(4) ($) | NON-EQUITY INCENTIVE PLAN COMPENSATION(5) ($) | ALL OTHER COMPENSATION(6) ($) | TOTAL(7) ($) |
John Donahoe II President and Chief Executive Officer | 2023 | 1,500,000 | — | | 13,220,455 | 7,247,371 | 6,770,000 | 4,052,059 | 32,789,885 |
2022 | 1,500,000 | — | | 12,061,812 | 6,782,995 | 4,450,000 | 4,043,253 | 28,838,060 |
2021 | 1,500,000 | 13,600,000 | 3,602,980 | 5,402,416 | 4,500,000 | 4,315,312 | 32,920,708 |
Matthew Friend Executive Vice President and Chief Financial Officer | 2023 | 1,221,154 | — | | 4,080,045 | 2,415,790 | 2,425,000 | 15,250 | 10,157,239 |
2022 | 1,056,731 | 1,056,000 | 2,783,949 | 1,938,030 | 890,000 | 14,500 | 7,739,210 |
2021 | 875,000 | 1,260,000 | 7,161,045 | 1,740,792 | 900,000 | 14,250 | 11,951,087 |
Andrew Campion Chief Operating Officer | 2023 | 1,250,000 | — | | 4,080,045 | 2,415,790 | 2,425,000 | 15,250 | 10,186,085 |
2022 | 1,221,154 | 1,200,000 | 2,990,322 | 2,261,028 | 890,000 | 15,241 | 8,577,745 |
2021 | 1,100,000 | 1,584,000 | 11,161,060 | 1,740,792 | 900,000 | 14,250 | 16,500,102 |
Heidi O'Neill President, Consumer and Marketplace | 2023 | 1,250,000 | — | | 4,080,045 | 2,415,790 | 2,425,000 | 15,250 | 10,186,085 |
2022 | 1,221,154 | 1,200,000 | 2,990,322 | 2,261,028 | 890,000 | 26,618 | 8,589,122 |
2021 | 1,100,000 | 1,584,000 | 7,161,045 | 1,740,792 | 900,000 | 14,250 | 12,500,087 |
Mark Parker Executive Chairman | 2023 | 1,000,000 | — | | — | | 2,300,765 | — | | 6,638,047 | 9,938,812 |
2022 | 1,134,615 | — | | — | | 2,153,362 | 4,450,000 | 4,096,391 | 11,834,368 |
2021 | 1,700,000 | 12,040,000 | — | | 6,002,675 | 4,500,000 | 3,235,307 | 24,477,982 |
(1)Reflects titles as of May 31, 2023, which was the last day of fiscal 2023. Effective June 1, 2023, the first day of fiscal 2024, Mr. Campion ceased serving as Chief Operating Officer and became NIKE's Managing Director, Strategic Business Ventures and Ms. O'Neill became NIKE's President, Consumer, Product & Brand.
(2)For fiscal 2022, represents awards under our PSP, which were paid at 0% for Mr. Donahoe and 80% for Messrs. Friend and Campion and Ms. O'Neill; Mr. Parker did not receive a fiscal 2022 PSP award. For fiscal 2021, represents annual cash incentive awards which were paid at 120% of target to each executive officer, as well as transition-period cash incentive awards paid to Messrs. Donahoe and Parker.
(3)Represents the grant date fair value of RSU and PSU awards granted in fiscal 2023 and 2022, and RSU awards granted in fiscal 2021, in each case computed in accordance with accounting guidance applicable to stock-based compensation. For RSUs, the grant date fair value was computed based on the closing market price of our Class B Stock on the grant date. For PSUs, the grant date fair value was computed using a Monte Carlo simulation based on the probable outcome of the performance condition as of the grant date. The assumptions made in determining the grant date fair value of PSUs under applicable accounting guidance are disclosed in footnote 5 of "Grants of Plan-Based Awards in Fiscal 2023". For fiscal 2023, the grant date fair value of the PSU awards was: $10,250,484 for Mr. Donahoe; $2,595,059 for Messrs. Friend and Campion and Ms. O'Neill; and $0 for Mr. Parker. Assuming that the maximum level of performance conditions is achieved, the value of those PSU awards would be: $16,759,123 for Mr. Donahoe; $4,242,816 for Messrs. Friend and Campion and Ms. O'Neill; and $0 for Mr. Parker.
(4)Represents the grant date fair value of options granted in the applicable fiscal year computed in accordance with accounting guidance applicable to stock-based compensation. The grant date fair value of the options was estimated using the Black-Scholes option pricing model. The assumptions made in determining the grant date fair value of options under applicable accounting guidance are disclosed in Note 9 of Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the lastyear ended May 31, 2023.
(5)Non-Equity Incentive Plan Compensation consists of the following:
| | | | | | | | | | | | | | |
NAME | Year | ANNUAL INCENTIVE COMPENSATION(a) ($) | LONG-TERM INCENTIVE COMPENSATION(b) ($) | TOTAL ($) |
John Donahoe II | 2023 | 3,570,000 | 3,200,000 | 6,770,000 |
| 2022 | — | | 4,450,000 | 4,450,000 |
| 2021 | — | | 4,500,000 | 4,500,000 |
Matthew Friend | 2023 | 1,785,000 | 640,000 | 2,425,000 |
| 2022 | — | | 890,000 | 890,000 |
| 2021 | — | | 900,000 | 900,000 |
Andrew Campion | 2023 | 1,785,000.00 | | 640,000 | 2,425,000 |
| 2022 | — | | 890,000 | 890,000 |
| 2021 | — | | 900,000 | 900,000 |
Heidi O'Neill | 2023 | 1,785,000.00 | | 640,000 | 2,425,000 |
| 2022 | — | | 890,000 | 890,000 |
| 2021 | — | | 900,000 | 900,000 |
Mark Parker | 2023 | — | | — | | — | |
| 2022 | — | | 4,450,000 | 4,450,000 |
| 2021 | — | | 4,500,000 | | 4,500,000 | |
(a)Amounts shown were earned for performance in the applicable fiscal year under our PSP.
(b)Amounts shown were earned for filingperformance during the three-year period ending with the Securities and Exchange Commission.applicable fiscal year under our LTIP.
Members
(6)For fiscal 2023, includes Company matching contributions to the 401(k) Plan in the amount of $15,250 for each of the Audit & Finance Committee:Named Executive Officers. The amount for Mr. Donahoe also includes $3,920,000 in charitable matching contributions made by the Company, $110,365 in aggregate incremental cost to the Company for personal use of the Company's aircraft, as well as the value of Company-related merchandise and security services. The amount for Mr. Parker also includes $6,440,000 in charitable matching contributions made by the Company, $127,804 in aggregate incremental cost to the Company for personal use of the Company' aircraft, $54,806 in security services, as well as the value of Company-related merchandise. The aggregate incremental cost for personal use of the Company's aircraft is determined based on the variable operating cost to the Company, including the cost of fuel, maintenance, crew travel expenses, landing fees, parking fees, in-flight food and beverage, and other smaller variable costs associated with each flight. The amounts for Mr. Donahoe and Mr. Parker exclude the aggregate incremental cost to the Company for personal use of the Company's aircraft for which Mr. Donahoe or Mr. Parker, as applicable, reimbursed the Company in accordance with a time sharing agreement and as allowed under Federal Aviation Regulation 91.501(c) and (d).
Alan B. Graf, Jr., Chair
John G. Connors
Peter B. Henry
(7)For fiscal 2023, includes the value of both the grant of PSUs for the fiscal 2023 – 2025 performance period (which were awarded as part of fiscal 2023 compensation) and the payout of LTIP awards for the fiscal 2021 – 2023 performance period (which were awarded as part of fiscal 2021 compensation). For fiscal 2022, includes the value of both the grant of PSUs for the fiscal 2022 – 2024 performance period (which were awarded as part of fiscal 2022 compensation) and the payout of LTIP awards for the fiscal 2020 – 2022 performance period (which were awarded as part of fiscal 2020 compensation).
2020 PROXY STATEMENT 5545 NIKE, INC.
STOCK INCENTIVE PLAN
|
| |
| |
PROPOSAL 4
APPROVAL OF STOCK INCENTIVE PLAN
|
|
The Board of Directors is asking our shareholders to approve an amendment and restatement of the NIKE, Inc. Stock Incentive Plan (the "Amended Plan"). The Stock Incentive Plan was originally adopted by the Board and approved by shareholders in 1990 as the 1990 Stock Incentive Plan, and an amended and restated version was most recently adopted by the Board and approved by shareholders in 2015 (the "Current Plan"). On the recommendation of the Compensation Committee, the Board unanimously adopted the Amended Plan on June 17, 2020, subject to shareholder approval at the Annual Meeting.
If this proposal is approved by our shareholders, the Amended Plan will replace the Current Plan with respect to awards granted after the Annual Meeting. If this proposal is not approved, the Current Plan will remain in effect.
We recommend that shareholders approve the Amended Plan to permit the continued use of stock-based compensation. Stock-based compensation is an important part of our compensation structure and serves the best interests of our shareholders by:
• rewarding long-term Company performance;
• aligning employees' interests with those of our shareholders; and
• enabling us to attract and retain top-tier talent in a competitive marketplace.
As of our record date, July 17, 2020, only 46,144,669 of the 718,000,000 shares authorized under the Current Plan remained available for future grants, a number that the Compensation Committee and the Board believe is insufficient to meet our future needs. Therefore, if the Amended Plan is not approved, we may need to replace the stock-based components of our compensation with cash, which may increase compensation expense, reduce compensation alignment with shareholder interests, and impede our ability to attract and retain talent.
|
|
BOARD RECOMMENDATION |
| The Board of Directors recommends that shareholders vote FOR approval of the following resolution:
RESOLVED, that the shareholders approve the NIKE, Inc. Stock Incentive Plan as amended and restated.
|
| |
SUMMARYGRANTS OF THE STOCK INCENTIVE PLANPLAN-BASED AWARDS IN FISCAL 2023
The following summarytable sets forth information concerning the performance-based annual cash incentive opportunities and PSUs, RSUs, and stock options granted to the Named Executive Officers in fiscal 2023.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | ESTIMATED FUTURE PAYOUTS UNDER NON-EQUITY INCENTIVE PLAN AWARDS(1) | | ESTIMATED FUTURE PAYOUTS UNDER EQUITY INCENTIVE PLAN AWARDS(2) | ALL OTHER STOCK AWARDS: NUMBER OF SHARES OF STOCK OR UNITS(3) | ALL OTHER OPTION AWARDS: NUMBER OF SECURITIES UNDERLYING OPTIONS(4) | EXERCISE OR BASE PRICE OF OPTION AWARDS | GRANT DATE FAIR VALUE OF STOCK AND OPTION AWARDS(5) |
| | | THRESHOLD | TARGET | MAXIMUM | | THRESHOLD | TARGET | MAXIMUM |
NAME | GRANT DATE | APPROVAL DATE | ($) | ($) | ($) | | (#) | (#) | (#) | (#) | (#) | ($/SH) | ($) |
John Donahoe II | | | 1,500,000 | 3,000,000 | 4,500,000 | | | | | | | | |
| 8/1/2022 | 6/22/2022 | | | | | 18,328 | 73,312 | 146,624 | | | | 10,250,484 |
| 8/1/2022 | 6/22/2022 | | | | | | | | 25,984 | | | 2,969,971 |
| 8/1/2022 | 6/22/2022 | | | | | | | | | 225,564 | 114.30 | 7,247,371 |
Matthew Friend | | | 750,000 | 1,500,000 | 2,250,000 | | | | | | | | |
| 8/1/2022 | 6/10/2022 | | | | | 4,640 | 18,560 | 37,120 | | | | 2,595,059 |
| 8/1/2022 | 6/10/2022 | | | | | | | | 12,992 | | | 1,484,986 |
| 8/1/2022 | 6/10/2022 | | | | | | | | | 75,188 | 114.30 | 2,415,790 |
Andrew Campion | | | 750,000 | 1,500,000 | 2,250,000 | | | | | | | | |
| 8/1/2022 | 6/10/2022 | | | | | 4,640 | 18,560 | 37,120 | | | | 2,595,059 |
| 8/1/2022 | 6/10/2022 | | | | | | | | 12,992 | | | 1,484,986 |
| 8/1/2022 | 6/10/2022 | | | | | | | | | 75,188 | 114.30 | 2,415,790 |
Heidi O'Neill | | | 750,000 | 1,500,000 | 2,250,000 | | | | | | | | |
| 8/1/2022 | 6/10/2022 | | | | | 4,640 | 18,560 | 37,120 | | | | 2,595,059 |
| 8/1/2022 | 6/10/2022 | | | | | | | | 12,992 | | | 1,484,986 |
| 8/1/2022 | 6/10/2022 | | | | | | | | | 75,188 | 114.30 | 2,415,790 |
Mark Parker | | | — | — | — | | | | | | | | |
| 8/1/2022 | 6/10/2022 | | | | | — | — | — | | | | — | |
| 8/1/2022 | 6/10/2022 | | | | | | | | — | | | | — | |
| 8/1/2022 | 6/10/2022 | | | | | | | | | 71,608 | 114.30 | 2,300,765 |
(1)These amounts represent the potential performance-based annual cash incentive awards payable for performance during fiscal 2023 under our PSP. Under this plan, the Compensation Committee approved target awards for fiscal 2023 based on a percentage of the Amended Planexecutive's base salary paid during fiscal 2023 as follows: Mr. Donahoe, 200%; Mr. Friend, 120%; Mr. Campion, 120%; Ms. O'Neill, 120%; and Mr. Parker, 0%. Fiscal 2023 PSP awards are earned between 0% and 150% of target based on Company performance on three equally-weighted metrics—Adjusted Revenue, Adjusted Digital Revenue, and Adjusted EBIT—during fiscal 2023. Actual award payouts earned in fiscal 2023 and paid in fiscal 2024 are shown in the Summary Compensation Table.
(2)These amounts represent grants of PSUs under the SIP which are earned between 0% and 200% of target based on Relative TSR for fiscal 2023 – 2025, subject to a cap of 100% of target if Absolute TSR for the performance period is qualifiednegative. If Relative TSR is at or above the threshold performance goal, the Compensation Committee may adjust the earnout upwards or downwards by up to 20 percentage points based on a holistic assessment of the Company's performance during the three-year performance period with respect to employee engagement and inclusion, representation of diverse individuals in its entirety by referenceleadership positions, and sustainability. Earned PSUs will vest in August 2025 and are generally subject to continued employment through the vesting date. Vesting will be accelerated in certain circumstances as described below in the section "Potential Payouts Upon Termination or Change-in-Control". The PSUs accumulate cash dividend equivalents that are paid only when, and to the complete textextent, they vest.
(3)Amounts reported in this column represent grants of RSUs under the SIP which vest in three equal installments on the first three anniversaries of the Amended Plan, which is attached to this proxy statementgrant date. Vesting will be accelerated in certain circumstances as Exhibit A. Capitalized terms useddescribed below in the section "Potential Payouts Upon Termination or Change-in-Control". The RSUs accumulate cash dividend equivalents that are only paid upon vesting.
(4)Amounts reported in this proposal that are not otherwise defined have the meanings given to them in the Amended Plan.
BEST PRACTICES
The Amended Plan includes several features designed to protect the interests of our shareholders and reflect sound corporate governance practices and our compensation philosophy, including the following:
Fungible share pool. Shares issued in connection with "full value"column represent stock awards, including restricted stock and restricted stock units ("RSUs"), will count against the number of shares authorized for issuance under the Amended Plan at a higher rate than shares issued upon exercise of stock options and stock appreciation rights ("SARs") after a threshold for full value awards is exceeded.
No "evergreen" provision. There is no evergreen feature pursuant to which the shares authorized for issuance under the Amended Plan can be automatically replenished.
No discounted options or SARs, and no repricing. Stock options and SARs may not be granted with an exercise or grant price lower than the fair market value of the underlying shares on the date of grant, and the Amended Plan prohibits the direct or indirect repricing of underwater stock options or SARs without prior shareholder approval.
Double-trigger change-in-control vesting. If awards are assumed by a successor company in connection with a change in control (which is triggered only by the occurrence, rather than shareholder approval, of a merger or other change-in-control event), such awards will not automatically vest and pay out solely as a result of the change in control.
Awards subject to clawback policy. Awards granted under the Amended Plan areSIP which become exercisable in four equal installments on the first four anniversaries of the grant date. Options become exercisable in certain circumstances as described below in the section "Potential Payouts Upon Termination or Change-in-Control". Each option has a maximum term of 10 years, subject to earlier termination in the Company’s clawback policy.
event of the optionee's termination of employment.No transferability. Awards generally may not be transferred, except by will or(5)For stock awards, represents the lawsgrant date fair value of descent and distribution, unless the transfer is approved by the Compensation Committee and is for no consideration.
BURN RATE AND POTENTIAL DILUTION
The Amended Plan will increase the number of shares of Class B Stock authorized for issuance under the Stock Incentive Plan by 80,000,000 shares, from 718,000,000 shares to 798,000,000 shares. We believe this will provide sufficient shares for the Company's stock-based compensation needs through the 2024 annual meeting of shareholders. This estimate is(a) RSUs based on our historical share usage, adjusted for growth and to allow for flexibility around typesthe closing market price of awards used, though actual issuances could be materially different from this estimate.
In setting the number of shares authorized for issuance under the Amended Plan, we considered our historic burn rate, which measures annual share utilization. As shown in the following table, the Company's three-year average burn rate was 1.3%, which is below the benchmarks applied to our industry by certain major proxy advisory firms.
|
| | | | | |
FISCAL YEAR | STOCK OPTIONS AND SARS GRANTED (in millions) | FULL VALUE AWARDS GRANTED (in millions) | TOTAL GRANTED (in millions) | WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING (CLASS A AND CLASS B) (in millions) | BURN RATE (%) |
2020 | 19.1 | 3.8 | 22.9 | 1,559 | 1.5 |
2019 | 18.1 | 2.5 | 20.6 | 1,580 | 1.3 |
2018 | 16.8 | 1.8 | 18.6 | 1,624 | 1.1 |
Average | — | — | — | — | 1.3 |
We also considered overhang, which measures potential shareholder dilution, in setting the number of additional shares authorized for issuance under the Amended Plan. As of our record date of July 17, 2020, there were 1,559,888,549 shares of Class A Stock and Class B Stock outstanding, 92,331,425 shares of Class B Stock were subject to outstanding stock-based awards, and 46,144,669 shares were available for future awards under the Current Plan. Therefore, as of July 17, 2020, our overhang (calculated as the number of shares subject to outstanding awards plus the number of shares available to be granted ("Total Award Shares"), divided by the total number of outstanding shares of Class A Stock and Class B Stock) was 9%. Had the 80 million additional shares being requested under the Amended Plan been available for grant as of the record date, our overhang would have increased to 14%.
KEY TERMS
PURPOSE
The purpose of the Amended Plan is to enable the Company to attract and retain experienced individuals to serve as employees, officers, directors, consultants, advisors, and independent contractors, and to provide incentives for them to apply their best efforts on behalf of the Company.
ELIGIBILITY
Participants under the Amended Plan may include employees, officers, and directors of the Company and any parent or subsidiary corporation of the Company, as well as consultants, advisors, and independent contractors to the Company (and any parent or subsidiary corporation of the Company). As of July 17, 2020, it is anticipated that approximately 6,500 employees, including 8 officers, and all of our non-employee directors (12 as of July 17, 2020) will be eligible to receive awards under the Amended Plan.
ADMINISTRATION
The Amended Plan generally will be administered by a committee appointed by the Board (the "Committee"), which will be the Compensation Committee. Among other actions, the Committee may adopt rules, regulations, and award agreements for the Amended Plan and will determine the individuals to whom awards are made, the amount of the awards, and the other terms and conditions of the awards. The Committee may also advance any waiting period, accelerate any exercise date, or waive or modify any restriction with respect to an award. The Committee may delegate its authority under the Amended Plan within limits it establishes.
SHARES SUBJECT TO THE AMENDED PLAN
The Amended Plan provides that the aggregate number of shares of Class B Stock authorized for issuance is 798,000,000. Each share that is subject to a stock option or SAR will be counted against the shares available under the Amended Plan as one share, except that SARs payable solely in cash will not be counted against the number of shares available under the Amended Plan. Shares subject to "full value" Stock Awards generally will be counted against the shares available under the Amended Plan as one share for each share issued. However, if the aggregate number of shares issued pursuant to Stock Awards and Performance-Based Awards granted after July 16, 2010 exceeds 25,000,000 shares, plus the number of shares forfeited or withheld to satisfy tax withholding obligations under Stock Awards outstanding as of July 16, 2010, then any shares issued under such awards in excess of that number will be counted against the shares available under the Amended Plan as 2.8 shares for each share issued.
Shares underlying awards that expire, terminate, are canceled, or are forfeited to the Company may be reused for subsequent awards, except that shares withheld upon exercise of stock options or SARs in full or partial satisfaction of the exercise price or tax withholding amount may not be reused. Shares tendered to, or withheld by, the Company to satisfy tax withholding obligations with respect to the vesting or settlement of stock awards may be reused for subsequent awards.
MAXIMUM AWARDS
The Amended Plan provides that the maximum number of shares of Class B Stock authorized for issuance as incentive stock options is 798,000,000. No non-employee director may be granted any award or awards denominated in shares in excess of $500,000 in the aggregate in any fiscal year, plus an additional $500,000 in value for one-time awards to a newly appointed or elected non-employee director.
DIVIDENDS
Awards under the Amended Plan may be credited with dividends or dividend equivalents, and the Committee may apply any restrictions to the dividends or dividend equivalents that it deems appropriate. For awards under the Amended Plan that are subject to performance goals, no dividends or dividend equivalents may be paid with respect to any unearned portion of the award.
TYPES OF AWARDS
The Amended Plan authorizes the award of stock options, SARs, and Stock Awards:
Stock Options. Stock options may be granted as incentive stock options (within the meaning of Section 422 of the Code) or non-statutory stock options. A stock option entitles the recipient to purchase up to a specified total number of shares of Class B Stock at a specified exercise price per share. The exercise price per share will be determined by the Committee, but may not
be less than 100% of the fair market value of a share of Class B Stock on the grant date and (b) PSUs based on a value of grant. Fair market value generally will be$139.82 per share computed using a Monte Carlo simulation based on the closing priceprobable outcome of the performance condition as of the grant date. The Monte Carlo simulation was performed using the remaining performance period of 2.83 years and assuming an expected volatility of 34.97% and risk-free interest rate of 2.79%. The expected volatility was based on an analysis of the historical volatility of the Class B Common Stock on the grant date for 2.83 years. The risk-free interest rate corresponding with the remaining performance period was calculated using the U.S. Treasury (constant maturity) risk-free rates in effect on the grant date for a 2- and 3-year period. For option awards, represents the grant date fair value of grant. Nostock options granted based on a value of $32.13 per share, calculated using the Black-Scholes option pricing model. The assumptions made in determining option values are disclosed in Note 9 to Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended May 31, 2023. Stock and option award values were computed in accordance with accounting guidance applicable to stock-based compensation.
OUTSTANDING EQUITY AWARDS AT MAY 31, 2023
The following table sets forth information concerning outstanding stock options, PSUs, and RSUs held by the Named Executive Officers at May 31, 2023.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| OPTION AWARDS | | STOCK AWARDS |
NAME | NUMBER OF SECURITIES UNDERLYING UNEXERCISED OPTIONS EXERCISABLE (#) | NUMBER OF SECURITIES UNDERLYING UNEXERCISABLE OPTIONS (#)(1) | OPTION EXERCISE PRICE ($) | OPTION EXPIRATION DATE | | NUMBER OF SHARES OR UNITS OF STOCK THAT HAVE NOT VESTED (#)(2) | MARKET VALUE OF SHARES OR UNITS OF STOCK THAT HAVE NOT VESTED ($) | EQUITY INCENTIVE PLAN AWARDS: NUMBER OF UNEARNED SHARES, UNITS OR OTHER RIGHTS THAT HAVE NOT VESTED (#)(3) | EQUITY INCENTIVE PLAN AWARDS: MARKET OR PAYOUT VALUE OF UNEARNED SHARES, UNITS OR OTHER RIGHTS THAT HAVE NOT VESTED ($) |
John Donahoe II | 177,633 | 59,210(4) | 102.160 | 1/13/2030 | | | | | |
| 767,544 | — | 102.160 | 1/13/2030 | | | | | |
| 119,788 | 119,787(5) | 97.610 | 8/1/2030 | | | | | |
| 38,210 | 114,629(6) | 167.510 | 8/1/2031 | | | | | |
| — | 225,564(7) | 114.300 | 8/1/2032 | | 55,536 | 5,845,719 | 177,428 | 18,676,071 |
Matthew Friend | 23,000 | — | | 57.870 | 7/15/2026 | | | | | |
| 30,000 | — | | 59.100 | 7/20/2027 | | | | | |
| 35,000 | — | | 77.540 | 8/1/2028 | | | | | |
| 27,072 | 9,023(8) | 83.120 | 8/1/2029 | | | | | |
| 38,599 | 38,598(5) | 97.610 | 8/1/2030 | | | | | |
| 10,918 | 32,751(6) | 167.510 | 8/1/2031 | | | | | |
| — | 75,188(7) | 114.300 | 8/1/2032 | | 52,022 | 5,475,836 | 43,281 | 4,555,758 |
Andrew Campion | 75,000 | — | | 57.870 | 7/15/2026 | | | | | |
| 75,000 | — | | 59.100 | 7/20/2027 | | | | | |
| 80,000 | — | | 77.540 | 8/1/2028 | | | | | |
| 65,744 | 21,914(8) | 83.120 | 8/1/2029 | | | | | |
| 38,599 | 38,598(5) | 97.610 | 8/1/2030 | | | | | |
| 12,737 | 38,210(6) | 167.510 | 8/1/2031 | | | | | |
| — | 75,188(7) | 114.300 | 8/1/2032 | | 72,936 | 7,677,243 | 43,281 | 4,555,758 |
Heidi O'Neill | 25,000 | — | | 77.540 | 8/1/2028 | | | | | |
| 46,020 | 15,340(8) | 83.120 | 8/1/2029 | | | | | |
| 38,599 | 38,598(5) | 97.610 | 8/1/2030 | | | | | |
| 12,737 | 38,210(6) | 167.510 | 8/1/2031 | | | | | |
| — | 75,188(7) | 114.300 | 8/1/2032 | | 52,843 | 5,562,254 | 43,281 | 4,555,758 |
Mark Parker | 110,000 | — | | 31.675 | 7/19/2023 | | | | | |
| 330,000 | — | | 38.760 | 7/18/2024 | | | | | |
| 330,000 | — | | 56.400 | 7/17/2025 | | | | | |
| 165,000 | — | | 57.870 | 7/15/2026 | | | | | |
| 165,000 | — | | 59.100 | 7/20/2027 | | | | | |
| 175,000 | — | | 77.540 | 8/1/2028 | | | | | |
| 226,701 | 75,567(8) | 83.120 | 8/1/2029 | | | | | |
| 133,098 | 133,096(5) | 97.610 | 8/1/2030 | | | | | |
| 12,131 | 36,390(6) | 167.510 | 8/1/2031 | | | | | |
| — | 71,608(7) | 114.300 | 8/1/2032 | | — | | — | | — | | — | |
(1)Stock options generally become exercisable in four equal installments on each of the first four anniversaries of the grant date.
(2)Reflects RSUs that vest as described in the table below:
| | | | | | | | | | | |
NAME | FISCAL YEAR OF GRANT | NUMBER OF UNVESTED UNITS | VESTING SCHEDULE |
John Donahoe II | 2023 | 25,984 | RSUs subject to three-year pro-rata vesting on 8/1/2023, 8/1/2024, and 8/1/2025 |
| 2022 | 17,249 | RSUs subject to three-year pro-rata vesting; 50% of the remaining units vest on 8/1/2023 and 50% vest on 8/1/2024 |
| 2021 | 12,303 | RSUs subject to three-year pro-rata vesting; 100% of the remaining units vest on 8/1/2023 |
Matthew Friend | 2023 | 12,992 | RSUs subject to three-year pro-rata vesting on 8/1/2023, 8/1/2024, and 8/1/2025 |
| 2022 | 4,928 | RSUs subject to three-year pro-rata vesting; 50% of the remaining units vest on 8/1/2023 and 50% vest on 8/1/2024 |
| 2021 | 30,138 | RSUs subject to four-year pro-rata vesting; 50% of the remaining units vested on 6/1/2023 and 50% vest on 6/1/2024 |
| 2021 | 3,964 | RSUs subject to three-year pro-rata vesting; 100% of the remaining units vest on 8/1/2023 |
Andrew Campion | 2023 | 12,992 | RSUs subject to three-year pro-rata vesting on 8/1/2023, 8/1/2024, and 8/1/2025 |
| 2022 | 5,749 | RSUs subject to three-year pro-rata vesting; 50% of the remaining units vest on 8/1/2023 and 50% vest on 8/1/2024 |
| 2021 | 50,231 | RSUs subject to four-year pro-rata vesting; 50% of the remaining units vested on 6/1/2023 and 50% vest on 6/1/2024 |
| 2021 | 3,964 | RSUs subject to three-year pro-rata vesting; 100% of the remaining units vest on 8/1/2023 |
Heidi O'Neill | 2023 | 12,992 | RSUs subject to three-year pro-rata vesting on 8/1/2023, 8/1/2024, and 8/1/2025 |
| 2022 | 5,749 | RSUs subject to three-year pro-rata vesting, 50% of the remaining units vest on 8/1/2023 and 50% vest on 8/1/2024 |
| 2021 | 30,138 | RSUs subject to four-year pro-rata vesting, 50% of the remaining units vested on 6/1/2023 and 50% vest on 6/1/2024 |
| 2021 | 3,964 | RSUs subject to three-year pro-rata vesting; 100% of the remaining units vest on 8/1/2023 |
(3)Reflects PSUs that vest as described in the table below, assuming performance at the maximum level (200%) for the fiscal 2023 – 2025 PSUs and performance at the target level (100%) for the fiscal 2022 – 2024 PSUs. In each case, PSUs will be earned between 0% and 200% based on Relative TSR over the applicable three-year performance period and subject to the People & Planet modifier. | | | | | | | | | | | |
NAME | FISCAL YEAR OF PERFORMANCE PERIOD | NUMBER OF UNVESTED UNITS | VESTING SCHEDULE |
John Donahoe II | 2023 – 2025 | 146,624 | Earned units will cliff vest on 8/1/2025 |
| 2022 – 2024 | 30,804 | Earned units will cliff vest on 8/1/2024 |
Matthew Friend | 2023 – 2025 | 37,120 | Earned units will cliff vest on 8/1/2025 |
| 2022 – 2024 | 6,161 | Earned units will cliff vest on 8/1/2024 |
Andrew Campion | 2023 – 2025 | 37,120 | Earned units will cliff vest on 8/1/2025 |
| 2022 – 2024 | 6,161 | Earned units will cliff vest on 8/1/2024 |
Heidi O'Neill | 2023 – 2025 | 37,120 | Earned units will cliff vest on 8/1/2025 |
| 2022 – 2024 | 6,161 | Earned units will cliff vest on 8/1/2024 |
(4)100% of these options will vest on January 13, 2024.
(5)50% of these options will vest on August 1, 2023 and 50% will vest on August 1, 2024.
(6)33.3% of these options will vest on August 1, 2023, 33.3% will vest on August 1, 2024, and 33.3% will vest on August 1, 2025.
(7)25% of these options will vest on August 1, 2023, 25% will vest on August 1, 2024, 25% will vest on August 1, 2025, and 25% will vest on August 1, 2026.
(8)100% of these options will vest on August 1, 2023.
OPTION EXERCISES AND STOCK VESTED DURING FISCAL 2023
The following table sets forth information concerning stock option can be exercised more than 10 years afterexercises and vesting of RSUs during fiscal 2023 for each of the date of grant. Except asNamed Executive Officers on an aggregated basis.
| | | | | | | | | | | | | | | | | |
| OPTION AWARDS | | STOCK AWARDS |
NAME | NUMBER OF SHARES ACQUIRED ON EXERCISE (#) | VALUE REALIZED ON EXERCISE ($) | | NUMBER OF SHARES ACQUIRED ON VESTING (#) | VALUE REALIZED ON VESTING ($) |
John Donahoe II | — | | — | | | 89,775 | 11,262,977 |
Matthew Friend | — | | — | | | 23,104 | 2,706,794 |
Andrew Campion | — | | — | | | 36,608 | 4,294,302 |
Heidi O'Neill | — | | — | | | 24,637 | 2,882,016 |
Mark Parker | 220,000 | 19,443,600 | | 16,041 | 1,833,486 |
EQUITY COMPENSATION PLAN INFORMATION
The following table summarizes information regarding outstanding awards and shares available for future issuance under equity compensation plans approved by shareholders or in connection with a change in the Company’s capitalization or similar event, no stock option may be amended to reduce its exercise price, or canceled in exchange for cash, another award, or any other consideration at a time when the exercise price exceeds the fair market value of the Class B Stock. The Committee has discretion to allow stock options to be transferred for no consideration to immediate family members of the grantee.
Stock Appreciation Rights. A SAR entitles the recipient to receive shares of Class B Stock or cash, or a mixture of shares and cash, equal in value to the appreciation of a share of Class B Stock over its fair market value on the date of grant (or for SARs granted in connection with an option, the applicable option exercise price). SARs may, but needequity compensation plans that were not be granted in connection with an option. If a SAR is granted in connection with an option, it is exercisable only to the extent, and on the same conditions, that the related option is exercisable. No SAR can be exercised more than 10 years after the date of grant. Except as approved by shareholders as of May 31, 2023. The table does not reflect issuances made during fiscal 2024.
| | | | | | | | | | | | | | | | | |
| NUMBER OF SECURITIES TO BE ISSUED UPON EXERCISE OF OUTSTANDING OPTIONS, WARRANTS AND RIGHTS | | WEIGHTED- AVERAGE EXERCISE PRICE OF OUTSTANDING OPTIONS, WARRANTS AND RIGHTS(1) | NUMBER OF SECURITIES REMAINING AVAILABLE FOR FUTURE ISSUANCE UNDER EQUITY COMPENSATION PLANS (EXCLUDING SECURITIES REFLECTED IN COLUMN (a)) | |
PLAN CATEGORY | (a) | | (b) | (c) | |
Equity compensation plans approved by shareholders | 79,340,157 | (2) | $94.3954 | | 94,321,128 | (3) |
Equity compensation plans not approved by shareholders | — | | | — | | 3,432,320 | (4) |
Total | 79,340,157 | | $94.3954 | | 97,753,448 | |
(1)Weighted-average exercise prices do not reflect the shares that will be used upon the payment of outstanding awards of RSUs.
(2)Consists of 79,340,157 shares subject to awards of options, RSUs, PSUs (based on performance at the target level of 100%), and stock appreciation rights outstanding under the SIP.
(3)Includes 92,459,174 shares available for future issuance under the SIP and 1,861,954 shares available for future issuance under the Employee Stock Purchase Plan.
(4)Consists of 3,432,320 shares available for future issuance under the Foreign Subsidiary Employee Stock Purchase Plan, pursuant to which shares are offered and sold to employees of selected non-U.S. subsidiaries of the Company on substantially the same terms as those offered to U.S. employees under the shareholder-approved Employee Stock Purchase Plan as described above under "Compensation Discussion and Analysis—Compensation of our Named Executive Officers—Other Compensation—Employee Stock Purchase Plan".
NON-QUALIFIED DEFERRED COMPENSATION IN FISCAL 2023
| | | | | | | | | | | | | | | | | |
NAME | PLAN NAME | EXECUTIVE CONTRIBUTIONS IN FISCAL 2023(1) | AGGREGATE EARNINGS IN FISCAL 2023 | AGGREGATE WITHDRAWALS/ DISTRIBUTIONS IN FISCAL 2023 | AGGREGATE BALANCE AT MAY, 31 2023(2) |
John Donahoe II | DCP | — | $10,645 | — | $798,540 |
Matthew Friend | DCP | — | $(5,349) | — | $573,515 |
Andrew Campion | DCP | $461,539 | $36,035 | — | $3,860,874 |
Heidi O'Neill | DCP | $402,500 | $45,951 | — | $4,627,399 |
Mark Parker | DCP | $1,140,000 | $389,725 | — | $28,391,316 |
(1)All amounts reported in this column are also included in amounts reported in the Summary Compensation Table.
(2)Of the amounts reported in this column, the following amounts have been reported in the Summary Compensation Tables in this proxy statement or in connectionprior year proxy statements: Mr. Donahoe, $63,695; Mr. Friend, $9,503; Mr. Campion, $2,445,433; Ms. O'Neill, $1,207,906; and Mr. Parker, $22,185,929.
NON-QUALIFIED DEFERRED COMPENSATION PLANS
The Named Executive Officers are eligible to participate in our Deferred Compensation Plan (the "DCP"). Participants in the DCP may elect in advance to defer up to 75 percent of their annual base salary, and up to 100 percent of their bonus and long-term cash incentive payments.
We may make annual profit sharing contributions to defined contribution retirement plans. The contributions are allocated among eligible employees based on a percentage of their total salary and bonus for the year. To the fullest extent permitted under Internal Revenue Code limitations, these contributions are made to employees' accounts under our qualified 401(k) Savings and Profit Sharing Plan. Contributions based on salary and bonus in excess of the tax law limit ($305,000 for fiscal 2023) are made as NIKE contributions under the DCP.
Amounts deferred under the DCP are credited to a participant's account under the DCP. Each participant may allocate his or her account among any combination of the investment options available under the DCP. Participants' accounts are adjusted to reflect the investment performance of the investment options selected by the participants. Participants can change the allocation of their account balances daily. The investment options available under the DCP consist of 18 mutual funds with a changevariety of investment objectives and five risk-based portfolios. The investment options had annual returns in fiscal 2023 ranging from -15.91% to 3.77%. Amounts credited to participants' accounts are invested by us in actual investments matching the Company’s capitalization or similar event, no SAR may be amendedinvestment options selected by the participants to reduce its grant price, or canceled in exchangeensure that we do not bear any investment risk related to participants' investment choices.
The portion of a participant's account attributable to elective deferrals, including investment returns, is fully vested at all times. The portion of a participant's account attributable to NIKE contributions, including investment returns, is fully vested after the participant has been employed by us for cash, another award, or any other consideration at a time when the grant price exceeds the fair market valuefive years. All of the Class B Stock.
Named Executive Officers, other than Mr. Donahoe, are fully vested in their NIKE contributions.Stock Awards. Stock Awards are sharesEach time they elect to defer compensation, participants make an election regarding distribution of Class B Stock grantedthe compensation deferred under the Amended Plan,election (as adjusted to reflect investment performance). A participant may elect for distribution to be made in a lump sum at the beginning of a predetermined year while the participant is still employed or in service (but no sooner than the fourth year after the year in which the distribution election is submitted). Alternatively, a participant may elect for distribution to be subjectmade in a lump sum or in quarterly installments over five, ten, or fifteen years after termination of employment or service. Participants have limited rights to change their distribution elections. Participants may make a hardship withdrawal under certain circumstances. Subject to certain limitations, a participant may also at any time request to withdraw amounts from his or her account balance that were vested as of December 31, 2004 (and any subsequent investment returns on such restrictions asamount). If such request is approved, the Committeeparticipant may determine, including time-basedwithdraw 90% of the amount requested, and performance-based vesting conditions. Stock Awards subject to restrictions maythe remaining 10% will be granted as either restrictedpermanently forfeited.
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL
CHANGE-IN-CONTROL COMPENSATION — ACCELERATION OF EQUITY AWARDS
All unvested stock option, RSU, and PSU awards (which are shares of Class B Stock that are subject to forfeiture ifaccelerated vesting conditions are not satisfied) or RSUs (which are unfunded, unsecured rights to receive a shareupon the occurrence of Class B Stock after vesting conditions are satisfied).
CHANGE IN CONTROL
The Amended Plan does not provide for "single-trigger" acceleration if an acquiring company assumes the outstanding awards. Except as otherwise provided in an award agreement, the Amended Plan generally provides fortwo events (a "double-trigger" acceleration of stock options, SARs, and RSUs if): there is a Change in Control"change-in-control"; and the participant’sNamed Executive Officer's employment is terminated by us without Cause"cause" or by the Named Executive Officer for Good Reason"good reason", in each case between the occurrencechange-in-control (or shareholder approval of the Change in Control (or Shareholder Approval,change-in-control, if earlier), and the second anniversary of the Change in Control. Vestingchange-in-control. Stock options will be exercisable for four years following termination of employment, but not beyond each option's original 10-year term. PSUs will vest at 100% of target. Accelerated vesting of stock options, RSUs, and PSUs will also be acceleratedoccur if the Company iswe are acquired and the acquiring company does not assume the outstanding options, SARsRSUs, or PSUs. For purposes of our stock awards, "change-in-control" is generally defined to include:
•the acquisition by any person of 50% or more of our outstanding Class A Stock or, if the Class A Stock no longer elects a majority of directors, the acquisition by any person of 30% or more of our total outstanding Common Stock;
•the nomination (and subsequent election) in a two-year period of a majority of our directors by persons other than the incumbent directors;
•a sale of all or substantially all of our assets; and RSUs.
•an acquisition of NIKE through a merger, consolidation, or share exchange.
For purposes of our stock awards, "cause" generally includes willful and continued failure to substantially perform assigned duties and willful engagement in illegal conduct materially injurious to us, and "good reason" generally includes a material diminution in position or duties, a salary reduction or material reduction in other benefits, and a home office relocation of over 50 miles.
The following table shows the estimated benefits that would have been received by the Named Executive Officers if double-trigger accelerated vesting had occurred on May 31, 2023, when the closing price of our Class B Stock was $105.26 per share.
| | | | | | | | | | | |
NAME | STOCK AWARD ACCELERATION(1) | STOCK OPTION ACCELERATION(2) | TOTAL |
John Donahoe II | $16,804,970 | $1,099,922 | $17,904,892 |
Matthew Friend | $8,077,969 | $495,044 | $8,573,013 |
Andrew Campion | $10,279,377 | $780,451 | $11,059,828 |
Heidi O'Neill | $8,164,388 | $634,903 | $8,799,291 |
Mark Parker | — | $2,691,237 | $2,691,237 |
(1)Information regarding unvested RSUs and PSUs held by each Named Executive Officer is set forth in the Outstanding Equity Awards table above. The amounts in the table above represent the number of unvested RSUs and PSUs (at 100% of target) multiplied by the closing price of our Class B Stock on May 31, 2023.
(2)Information regarding outstanding unvested stock options held by each Named Executive Officer is set forth in the Outstanding Equity Awards table above. The amounts in the table above represent the aggregate value as of May 31, 2023 of those options using the excess of the per share closing price of our Class B Stock on May 31, 2023 over the per share exercise price, multiplied by the number of unvested option shares for each Named Executive Officer.
BENEFITS TRIGGERED ON CERTAIN EMPLOYMENT TERMINATIONS
STOCK OPTION ACCELERATION AND EXTENSION
As of May 31, 2023, each Named Executive Officer held stock options as listed in the Outstanding Equity Awards table above. Under the terms of the stock options held by each Named Executive Officer, upon the death or disability of the holder, all unvested options will vest and will be exercisable for four years following termination of employment, but not beyond each option's original 10-year term. If death or disability of a Named Executive Officer had occurred on May 31, 2023, the aggregate value of those options is as set forth in the "Stock Option Acceleration" column of the Change-in-Control Compensation – Acceleration of Equity Awards table above.
Under the terms of the stock options held by each Named Executive Officer that were granted after fiscal 2020, upon a termination of employment due to a "divestiture" or "reduction in force" that occurs at least six months following the grant date, and subject to the holder signing a general waiver and release of claims, options that are scheduled to vest within one year following the termination will vest and all vested options will be exercisable for one year following termination of employment, but not beyond each option's original 10-year term. The value of the unvested stock options held by each Named Executive Officer as of May 31, 2023 that would have become vested if a termination due to a "divestiture" or "reduction in force" had occurred on that date is $458,189 for Mr. Donahoe, $147,637 for each of Messrs. Friend and Campion and Ms. O'Neill, and $509,092 for Mr. Parker.
Under the terms of all the stock options held by the Named Executive Officers, options that have been outstanding for at least one year will be subject to continued vesting if the holder retires after reaching age 55 with at least 5 years of service (or accelerated vesting if the holder retires after reaching age 60 with at least 5 years of service), and vested options will be exercisable for four years following termination of employment, but not beyond each option's original 10-year term. If the Named Executive Officers had retired on May 31, 2023, the aggregate value of stock options subject to retirement vesting would have been $1,099,922 for Mr. Donahoe, $634,903 for Ms. O'Neill, and $2,691,237 for Mr. Parker. Messrs. Friend and Campion are not eligible for retirement vesting because these Named Executive Officers have not reached age 55.
STOCK AWARD ACCELERATION
As of May 31, 2023, the Named Executive Officers held unvested RSUs and PSUs as set forth in the Outstanding Equity Awards table above. Under the terms of their award agreements, all unvested RSUs and PSUs will immediately vest upon the death or disability of the holder, with PSUs vesting at 100% of target. The value of the unvested RSUs and PSUs held by each Named Executive Officer as of May 31, 2023 that would have become vested if death or disability had occurred on that date is as set forth in the "Stock Award Acceleration" column of the Change-in-Control Compensation — Acceleration of Equity Awards table above.
Under the terms of the RSUs that were granted to the Named Executive Officers after fiscal 2020 (excluding the stock-based transition awards granted to Messrs. Friend and Campion and Ms. O'Neill) and all PSUs held by the Named Executive Officers, upon a termination of employment due to a "divestiture" or "reduction in force" that occurs at least six months following the grant date, and subject to the holder signing a general waiver and release of claims, RSUs and PSUs that are scheduled to vest within one year following the termination will vest, with PSUs vesting at 100% of target. The value of the unvested RSUs and PSUs held by each Named Executive Officer as of May 31, 2023 that would have become vested if a termination due to a "divestiture" or "reduction in force" had occurred on that date is $3,114,644 for Mr. Donahoe, $1,132,493 for Mr. Friend, $1,175,755 for each of Mr. Campion and Ms. O'Neill, and $0 for Mr. Parker.
PAYMENTS UNDER NONCOMPETITION AGREEMENTS
We have a noncompetition agreement with Mr. Donahoe that extends for 18 months following the termination of his employment with us and a noncompetition agreement with Mr. Parker that extends for two years following the termination of his employment with us. Under these agreements, if Mr. Donahoe's employment is terminated by us without "cause" (as defined in his agreement), or if Mr. Parker's employment is terminated by us, we will make monthly payments to the executive during the noncompetition period in an amount equal to one-twelfth of his then current annual salary and target PSP award ("Annual NIKE Income"). The agreements provide further that if the executive voluntarily resigns, we will make monthly payments to him during the noncompetition period in an amount equal to one-twenty-fourth of his then current Annual NIKE Income. However, commencement of the above-described monthly payments will be delayed until after the six-month period following the executive's separation from service, and all payments that he would otherwise have received during that period will be paid in a lump sum promptly following the end of the period, together with interest at the prime rate. If employment is terminated without "cause" (as defined in the applicable agreement), the parties may mutually agree to waive the covenant not to compete, and if employment is terminated for "cause", we may unilaterally waive the covenant. If the covenant is waived, we will not be required to make the payments described above for the months as to which the waiver applies. Assuming that Mr. Donahoe's employment had been terminated on May 31, 2023 and the covenant was not waived, during the 18-month period ending November 30, 2024 we would have been required to pay Mr. Donahoe $375,000 per month if the termination was by us without "cause", or $187,500 per month if he had voluntarily resigned. Assuming that Mr. Parker's employment had been terminated on May 31, 2023 and the covenant was not waived, during the 24-month period ending May 31, 2025 we would have been required to pay Mr. Parker $83,333 per month if the termination was by us, or $41,667 per month if he had voluntarily resigned.
We have noncompetition agreements with each of the other Named Executive Officers on generally the same terms as Mr. Donahoe, except that the noncompetition period is one year, we may unilaterally waive the covenant in all cases (including a termination without "cause"), the monthly payments are one-twelfth or one-twenty-fourth of the executive's then current annual salary (instead of their Annual NIKE Income), and payments may commence on termination. Assuming that the employment of each of these Named Executive Officers had been terminated on May 31, 2023 and the covenant was not waived, during the 12-month period ending May 31, 2024 we would have been required to pay them $104,167 per month if the termination was by us without "cause", or $52,083 per month if they had voluntarily resigned.
CEO PAY RATIO
NIKE's pay and benefits are designed to be competitive and equitable, meet the diverse needs of our global teammates, and reinforce our values. We pay for performance and impact by linking incentive pay to Company performance and seek to invest in positive experiences that have the greatest impact on the engagement and well-being of our employees. The executive compensation program is highly incentive-based and weighted towards long-term awards to emphasize long-term performance
and support retention. Our executive compensation program is designed to attract and retain top-tier talent in a competitive market and to "pay for performance" in order to drive business results and maximize shareholder value.
For fiscal 2023, our last completed fiscal year:
•The employee identified at the median of all NIKE employees (other than our CEO) was a retail store employee in Canada;
•The annual total compensation of the median employee was $33,646;
•The annual total compensation of our CEO, Mr. Donahoe, was $32,789,885; and
•The estimated ratio of the annual total compensation of our CEO to the median annual total compensation of all other NIKE employees was 975 to 1.
This pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules based on the methodology described below. The SEC rules for identifying the median compensated employee and calculating the pay ratio allow companies to adopt a variety of methodologies, apply certain exclusions, and make reasonable estimates and assumptions that reflect their compensation practices. As such, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies may utilize different methodologies, exclusions, estimates, and assumptions in calculating their own pay ratios.
METHODOLOGY
For purposes of calculating this pay ratio, we used the same median employee that was identified in fiscal 2022, as we believe there has been no change in our employee population, our compensation arrangements, or our median employee's circumstances that would significantly affect our pay ratio disclosure. The determination of the median employee was made in fiscal 2022 using the methodology described below, and the median employee's fiscal 2023 annual total compensation was calculated based on the Summary Compensation Table rules used for our Named Executive Officers (in accordance with Item 402(c)(2)(x) of Regulation S-K).
FISCAL 2022 METHODOLOGY
We use the first business day in May as the date to determine the median employee. The first business day in May for fiscal 2022 was May 2, 2022. At that time, we had approximately 77,239 employees globally. After applying the "de minimis exemption" under the SEC rules, which permits us to exclude non-U.S. employees accounting for 5% or less of our total employee population, we excluded the 3,656 employees in the jurisdictions identified below, and our employee population consisted of approximately 73,583 employees.
| | | | | | | | | | | | | | | | | | | | | | | |
Slovenia | 1 | | Denmark | 68 | | Malaysia | 206 |
Sri Lanka | 4 | | Uruguay | 71 | | Thailand | 206 |
United Arab Emirates | 5 | | Czech Republic | 73 | | South Africa | 207 |
Croatia | 6 | | Hungary | 82 | | Vietnam | 252 |
Philippines | 19 | | Indonesia | 85 | | Israel | 266 |
Macau | 42 | | Ireland | 87 | | Poland | 276 |
New Zealand | 44 | | Switzerland | 113 | | Chile | 285 |
Norway | 45 | | Greece | 135 | | Hong Kong | 323 |
Sweden | 55 | | Portugal | 148 | | Turkey | 340 |
Brazil | 61 | | Austria | 151 | | | |
Of the 73,583 employees included in the CEO Pay Ratio calculation, approximately 75% were full-time, 49% were in retail jobs, and 51% were located in the United States.
To identify our median employee we calculated annual compensation for fiscal 2022 based on base salary or hourly wages, as applicable. For the majority of our employees, base salary or hourly wages comprise the majority of their compensation. To determine wages for hourly employees, we used each individual's pay rate and estimated scheduled hours in the applicable Human Resources system of record.
After determining the annual compensation for our employee population as described above, we identified a subset of approximately 100 individuals representing the potential median employee population. For this subset, we calculated each employee's annual total compensation in U.S. dollars for fiscal 2022 based on the Summary Compensation Table rules used for our Named Executive Officers (in accordance with Item 402(c)(2)(x) of Regulation S-K). Compensation for permanent employees hired during the fiscal year was annualized, compensation for non-U.S. employees was converted into U.S. dollars using the applicable currency conversion rate as reported in the Human Resources system of record for the median employee determination date, and the median employee was then selected from this subset.
PAY VERSUS PERFORMANCE
This disclosure has been prepared in accordance with Item 402(v) of Regulation S-K under the Exchange Act and does not necessarily reflect how the Compensation Committee evaluates compensation decisions in light of Company or individual performance. The Compensation Committee did not consider the pay versus performance disclosure below in making its compensation decisions for any of the fiscal years shown. For discussion of how the Compensation Committee seeks to align pay with performance when making compensation decisions, please review the section above titled "Compensation Discussion and Analysis".
PAY VERSUS PERFORMANCE TABLE
The following table sets forth compensation information of our CEO and our non-CEO NEOs and Company performance for the fiscal years listed below, in accordance with Item 402(v) of Regulation S-K.
| | | | | | | | | | | | | | | | | | | | | | | | | | |
YEAR | SUMMARY COMPENSATION TABLE TOTAL FOR CEO(1)(2) | COMPENSATION ACTUALLY PAID TO CEO(1)(3) | AVERAGE SUMMARY COMPENSATION TABLE TOTAL FOR NON-CEO NEOs(1)(4) | AVERAGE COMPENSATION ACTUALLY PAID TO NON-CEO NEOs(1)(5) | VALUE OF INITIAL FIXED $100 INVESTMENT BASED ON | NET INCOME(7) (IN MILLIONS) | ADJUSTED REVENUE(8) (IN MILLIONS) |
TOTAL SHAREHOLDER RETURN(6) | PEER GROUP TOTAL SHAREHOLDER RETURN(6) |
2023 | $32,789,885 | $29,391,856 | $10,117,055 | $7,259,680 | $109.51 | $116.84 | $5.070 | $52.593 |
2022 | $28,838,060 | $19,617,425 | $9,185,111 | $7,482,733 | $122.26 | $120.40 | $6.046 | $47.406 |
2021 | $32,920,708 | $77,444,844 | $17,107,315 | $28,986,814 | $139.58 | $141.30 | $5.727 | $43.769 |
(1) John Donahoe II served as the Company's CEO for each fiscal year presented. The individuals comprising the non-CEO NEOs for each fiscal year presented are Matthew Friend, Andrew Campion, Heidi O'Neill, and Mark Parker.
(2) Represents the amount of total compensation reported for our CEO, Mr. Donahoe, in the "Total" column of the "Summary Compensation Table" for each fiscal year presented.
(3) The dollar amounts reported in the "Compensation Actually Paid to CEO" column have been calculated in accordance with Item 402(v) of Regulation S-K and do not reflect compensation actually earned, realized, or received by the CEO. These amounts reflect the amount set forth in the "Total" column of the "Summary Compensation Table" for each fiscal year presented, with certain adjustments as described in the table below, in accordance with the requirements of Item 402(v) of Regulation S-K:
| | | | | | | | | | | | | | |
| | 2023 | 2022 | 2021 |
| Summary Compensation Table ("SCT") total for CEO | $32,789,885 | $28,838,060 | $32,920,708 |
| Deduction for amounts reported under the "Stock Awards" column in the SCT | $13,220,455 | $12,061,812 | $3,602,980 |
| Deduction for amounts reported under the "Option Awards" column in the SCT | $7,247,371 | $6,782,995 | $5,402,416 |
| Total deductions from SCT | $20,467,826 | $18,844,807 | $9,005,396 |
| Year end fair value of equity awards | $17,801,878 | $9,719,590 | $17,094,821 |
| Change in fair value of outstanding and unvested equity awards | $(4,440,691) | $(6,894,427) | $23,324,355 |
| Change in fair value of equity awards granted in prior years that vested in the year | $3,461,158 | $6,578,196 | $12,885,143 |
| Value of dividends on stock awards | $247,452 | $220,812 | $225,212 |
| Total adjustments | $17,069,797 | $9,624,172 | $53,529,532 |
| Compensation actually paid | $29,391,856 | $19,617,425 | $77,444,844 |
Equity valuations: Stock option grant date fair values are calculated based on the Black-Scholes option pricing model as of the grant date; adjustments have been made using stock option fair values as of each measurement date using the stock price as of the measurement date and updated assumptions (i.e., term, volatility, dividend yield, risk free rates) as of the measurement date. PSU grant date fair values are calculated using a Monte Carlo simulation based on the probable outcome of the performance condition as of the grant date; adjustments have been made using a revised Monte Carlo valuation as of fiscal year end. RSU grant date fair values are calculated using the stock price as of the grant date; adjustments have been made using the stock price as of fiscal year end and as of each vesting date.
(4) Represents the average of the amounts of total compensation reported for our non-CEO NEOs, as a group, in the "Total" column of the "Summary Compensation Table" for each fiscal year presented.
(5) The dollar amounts reported in the "Average Compensation Actually Paid to Non-CEO NEOs" column have been calculated in accordance with Item 402(v) of Regulation S-K and do not reflect compensation actually earned, realized, or received by the non-CEO NEOs. These amounts reflect the average of the amounts set forth in the "Total" column of the "Summary Compensation Table" for each fiscal year presented for the applicable non-CEO NEOs, with certain adjustments as described in the table below, in accordance with the requirements of Item 402(v) of Regulation S-K:
| | | | | | | | | | | | | | |
| | 2023 | 2022 | 2021 |
| Average Summary Compensation Table total for non-CEO NEOs | $10,117,055 | $9,185,111 | $17,107,315 |
| Deduction for amounts reported under the "Stock Awards" column in the SCT | $3,060,034 | $2,191,148 | $6,370,788 |
| Deduction for amounts reported under the "Option Awards" column in the SCT | $2,387,034 | $2,153,362 | $2,806,263 |
| Total deductions from SCT | $5,447,068 | $4,344,510 | $9,177,051 |
| Year end fair value of equity awards | $4,815,268 | $2,257,926 | $15,020,734 |
| Change in fair value of outstanding and unvested equity awards | $(1,929,436) | $(2,839,461) | $6,098,187 |
| Change in fair value of equity awards granted in prior years that vested in the year | $(373,621) | $3,134,180 | $(186,300) |
| Value of dividends on stock awards | $77,482 | $89,487 | $123,929 |
| Total adjustments | $2,589,693 | $2,642,132 | $21,056,550 |
| Average compensation actually paid | $7,259,680 | $7,482,733 | $28,986,814 |
Equity valuations: Stock option grant date fair values are calculated based on the Black-Scholes option pricing model as of the grant date; adjustments have been made using stock option fair values as of each measurement date using the stock price as of the measurement date and updated assumptions (i.e., term, volatility, dividend yield, risk free rates) as of the measurement date. PSU grant date fair values are calculated using a Monte Carlo simulation based on the probable outcome of the performance condition as of the grant date; adjustments have been made using a revised Monte Carlo valuation as of fiscal year end. RSU grant date fair values are calculated using the stock price as of the grant date; adjustments have been made using the stock price as of fiscal year end and as of each vesting date.
(6) Peer group total shareholder return ("TSR") uses the Dow Jones U.S. Footwear Index, which the Company also uses in the stock performance graph required by Item 201(e) of Regulation S-K included in the Company's Annual Report on Form 10-K for fiscal 2023. These comparisons assume $100 (including reinvested dividends) was invested for the period starting May 31, 2020 through the end of the listed fiscal year in (a) the Company and (b) the Dow Jones U.S. Footwear Index, respectively. Historical stock performance is not necessarily indicative of future stock performance.
(7) Reflects net income calculated in accordance with generally accepted accounting principles ("GAAP") in the Company's Consolidated Statements of Income included in the Company's Annual Reports on Form 10-K for the applicable fiscal year.
(8) Reflects Adjusted Revenue calculated based on GAAP revenue excluding the impact of acquisitions and divestitures; changes in accounting principles; unanticipated restructurings; unanticipated exchange rate fluctuations; other extraordinary, unusual, or infrequently occurring items; and the unanticipated impact from Nike Virtual Studios and RTFKT. We determined Adjusted Revenue to be the most important financial performance measure used to link Company performance to compensation actually paid ("CAP") to our CEO and non-CEO NEOs in fiscal 2023, as required pursuant to Item 402(v) of Regulation S-K. This performance measure may not have been the most important financial performance measure for prior fiscal years, and we may determine a different financial performance measure to be the most important financial performance measure in future years.
DESCRIPTION OF RELATIONSHIPS
The following charts show graphically the relationships over the past three fiscal years of the CAP amounts for our CEO and non-CEO NEOs as compared to our cumulative TSR, peer group TSR, GAAP net income, and Adjusted Revenue as well as the relationship between TSR and peer group TSR.
CAP VERSUS COMPANY TSR & PEER GROUP TSR
CAP VERSUS NET INCOME
CAP VERSUS ADJUSTED REVENUE
TABULAR LIST OF PERFORMANCE METRICS
The following table lists the three financial performance measures that, in the Company's assessment, represent the most important performance measures used to link CAP for our NEOs to Company performance for fiscal 2023.
| | |
Adjusted Revenue |
Adjusted EBIT |
Stock price |
.
| | | | | |
| |
PROPOSAL 3 FREQUENCY OF ADVISORY VOTES ON EXECUTIVE COMPENSATION |
|
In accordance with the requirements of Section 14A of the Exchange Act, we are submitting to shareholders an advisory vote on whether to present our advisory "say-on-pay proposal" to shareholders every one year, every two years, or every three years. Under Exchange Act rules, we are required to present this "say-on-pay vote frequency proposal" at least once every six years. When shareholders last voted on a say-on-pay vote frequency proposal, at the 2017 Annual Meeting of Shareholders, the Board recommended holding a say-on-pay vote annually, and approximately 94% of the votes cast were voted in favor of holding such a vote annually. The Board continues to value shareholder feedback on our executive compensation program, and believes that an annual say-on-pay vote offers a strong mechanism for all shareholders to provide timely input on the Company's executive compensation practices and policies. Because your vote is advisory, it will not be binding on the Board. However, the Board values shareholder opinions, and will take into account the outcome of the vote when considering the frequency of future say-on-pay votes. |
|
BOARD RECOMMENDATION |
| The Board of Directors recommends that shareholders vote for future shareholder advisory votes on executive compensation to be held every 1 YEAR. |
| |
CLAWBACK
Except as otherwise provided in an award agreement, awards underWe maintain a clawback policy for the Amended Plan will be subject to: (1) the Company’s Policy for Recoupment of Incentive Compensation as in effect at the time of grant, (2) such other policies regarding clawback or recoupment of incentive compensation. Under the clawback policy, an executive officer who is involved in wrongful conduct that results in a restatement of the Company's financial statements must repay to the Company up to the full amount of any incentive compensation as may bethat was paid based on the financial statements that were subsequently approved byrestated. The clawback policy covers PSP awards, LTIP awards, SIP awards (based on excess proceeds from pre-restatement sales of stock acquired pursuant to the stock-based awards), and profit sharing contributions to the Deferred Compensation Plan. In addition to the clawback policy, the PSP, LTIP, and SIP also specify that the Committee (3) anymay apply further clawback requirements to awards through additional clawback policies or recoupment provisions set forth in any award agreement provisions, and (4) the requirements of applicable laws and regulations regarding clawback or recoupment of incentive compensation.
CORPORATE MERGERS
The Committee may make awards under the Amended Plan that have terms and conditions that vary from those specified in the Amended Plan when suchall awards are granted in substitution for, orsubject to clawback requirements under applicable law and regulation. The Company will adopt a revised clawback policy regarding accounting restatements in connection with the assumptionSEC's adoption of existingnew rules to implement Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, once such final rules, as implemented by NYSE, become effective.
RISK ASSESSMENT
At the Compensation Committee's request, management prepared an assessment of potential risks associated with the Company's fiscal 2023 compensation programs, including any risk that would be reasonably likely to have a material adverse effect on the Company. This included an assessment of risks associated with each element of executive compensation. The assessment considered certain design features of the compensation program that reduce the likelihood of excessive risk taking, such as reasonable performance targets, capped incentive compensation payouts, a balance of short- and long-term incentives, a balance of cash- and stock-based incentives, vesting of awards made by another corporationover time, and assumed, or otherwise agreed to bethe potential for clawback of incentive compensation. In addition, for stock-based compensation, we have adopted stock ownership guidelines, provided for limited accelerated vesting of PSUs, stock options, and RSUs upon termination of employment, and provided for only double-trigger accelerated vesting of stock-based awards upon a change in control. The Compensation Committee reviewed the risk assessment and concluded that our compensation programs and practices do not create risks that are reasonably likely to have a material adverse effect on the Company.
TAX DEDUCTIBILITY OF EXECUTIVE COMPENSATION
Section 162(m) of the Internal Revenue Code generally places a $1 million limit on the amount of compensation a company can deduct in any one year for "covered employees". While the Compensation Committee seeks to preserve tax deductibility in developing and implementing our executive compensation program, the committee also believes that it is important to maintain flexibility in administering compensation programs in a manner designed to promote varying corporate goals and the interests of our shareholders. Accordingly, we have not adopted a policy that all compensation must qualify as deductible for tax purposes and retain the ability to provide compensation that may not qualify as deductible under Section 162(m).
COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Board of Directors has reviewed and discussed with management the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K. Based on the Companyreview and discussions, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in connection withthis proxy statement.
Members of the Compensation Committee:
•Timothy Cook, Chair
•Cathleen Benko
•Mónica Gil
EXECUTIVE COMPENSATION TABLES
SUMMARY COMPENSATION TABLE
The following table sets forth information concerning the total compensation of each Named Executive Officer for fiscal years 2023, 2022, and 2021.
| | | | | | | | | | | | | | | | | | | | | | | | | | |
NAME AND PRINCIPAL POSITION(1) | YEAR | SALARY ($) | BONUS(2) ($) | STOCK AWARDS(3) ($) | OPTION AWARDS(4) ($) | NON-EQUITY INCENTIVE PLAN COMPENSATION(5) ($) | ALL OTHER COMPENSATION(6) ($) | TOTAL(7) ($) |
John Donahoe II President and Chief Executive Officer | 2023 | 1,500,000 | — | | 13,220,455 | 7,247,371 | 6,770,000 | 4,052,059 | 32,789,885 |
2022 | 1,500,000 | — | | 12,061,812 | 6,782,995 | 4,450,000 | 4,043,253 | 28,838,060 |
2021 | 1,500,000 | 13,600,000 | 3,602,980 | 5,402,416 | 4,500,000 | 4,315,312 | 32,920,708 |
Matthew Friend Executive Vice President and Chief Financial Officer | 2023 | 1,221,154 | — | | 4,080,045 | 2,415,790 | 2,425,000 | 15,250 | 10,157,239 |
2022 | 1,056,731 | 1,056,000 | 2,783,949 | 1,938,030 | 890,000 | 14,500 | 7,739,210 |
2021 | 875,000 | 1,260,000 | 7,161,045 | 1,740,792 | 900,000 | 14,250 | 11,951,087 |
Andrew Campion Chief Operating Officer | 2023 | 1,250,000 | — | | 4,080,045 | 2,415,790 | 2,425,000 | 15,250 | 10,186,085 |
2022 | 1,221,154 | 1,200,000 | 2,990,322 | 2,261,028 | 890,000 | 15,241 | 8,577,745 |
2021 | 1,100,000 | 1,584,000 | 11,161,060 | 1,740,792 | 900,000 | 14,250 | 16,500,102 |
Heidi O'Neill President, Consumer and Marketplace | 2023 | 1,250,000 | — | | 4,080,045 | 2,415,790 | 2,425,000 | 15,250 | 10,186,085 |
2022 | 1,221,154 | 1,200,000 | 2,990,322 | 2,261,028 | 890,000 | 26,618 | 8,589,122 |
2021 | 1,100,000 | 1,584,000 | 7,161,045 | 1,740,792 | 900,000 | 14,250 | 12,500,087 |
Mark Parker Executive Chairman | 2023 | 1,000,000 | — | | — | | 2,300,765 | — | | 6,638,047 | 9,938,812 |
2022 | 1,134,615 | — | | — | | 2,153,362 | 4,450,000 | 4,096,391 | 11,834,368 |
2021 | 1,700,000 | 12,040,000 | — | | 6,002,675 | 4,500,000 | 3,235,307 | 24,477,982 |
(1)Reflects titles as of May 31, 2023, which was the last day of fiscal 2023. Effective June 1, 2023, the first day of fiscal 2024, Mr. Campion ceased serving as Chief Operating Officer and became NIKE's Managing Director, Strategic Business Ventures and Ms. O'Neill became NIKE's President, Consumer, Product & Brand.
(2)For fiscal 2022, represents awards under our PSP, which were paid at 0% for Mr. Donahoe and 80% for Messrs. Friend and Campion and Ms. O'Neill; Mr. Parker did not receive a merger or other similar transaction. Awardsfiscal 2022 PSP award. For fiscal 2021, represents annual cash incentive awards which were paid at 120% of target to each executive officer, as well as transition-period cash incentive awards paid to Messrs. Donahoe and Parker.
(3)Represents the grant date fair value of RSU and PSU awards granted in substitution forfiscal 2023 and 2022, and RSU awards of an acquired company will not be counted against shares available undergranted in fiscal 2021, in each case computed in accordance with accounting guidance applicable to stock-based compensation. For RSUs, the Amended Plan.
AMENDMENT AND TERMINATION
The Amended Plan will continue until all shares available for issuance undergrant date fair value was computed based on the Stock Incentive Plan have been issued and all restrictions on such shares have lapsed. No awards may be made under the Amended Plan on or after the tenth anniversaryclosing market price of the last shareholder approval increasing the number of shares available for issuance under the Amended Plan. Accordingly, approval of the Amended Plan will extend the term in which awards may be made under the Stock Incentive Plan to September 17, 2030. The Board has the power to suspend, terminate, modify, or amend the Amended Plan at any time, provided that an amendment requires shareholder approval if such approval is required by the rules of any stock exchange on which our Class B Stock on the grant date. For PSUs, the grant date fair value was computed using a Monte Carlo simulation based on the probable outcome of the performance condition as of the grant date. The assumptions made in determining the grant date fair value of PSUs under applicable accounting guidance are disclosed in footnote 5 of "Grants of Plan-Based Awards in Fiscal 2023". For fiscal 2023, the grant date fair value of the PSU awards was: $10,250,484 for Mr. Donahoe; $2,595,059 for Messrs. Friend and Campion and Ms. O'Neill; and $0 for Mr. Parker. Assuming that the maximum level of performance conditions is traded.achieved, the value of those PSU awards would be: $16,759,123 for Mr. Donahoe; $4,242,816 for Messrs. Friend and Campion and Ms. O'Neill; and $0 for Mr. Parker.
NEW PLAN BENEFITS(4)Represents the grant date fair value of options granted in the applicable fiscal year computed in accordance with accounting guidance applicable to stock-based compensation. The grant date fair value of the options was estimated using the Black-Scholes option pricing model. The assumptions made in determining the grant date fair value of options under applicable accounting guidance are disclosed in Note 9 of Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended May 31, 2023.
Awards(5)Non-Equity Incentive Plan Compensation consists of the following:
| | | | | | | | | | | | | | |
NAME | Year | ANNUAL INCENTIVE COMPENSATION(a) ($) | LONG-TERM INCENTIVE COMPENSATION(b) ($) | TOTAL ($) |
John Donahoe II | 2023 | 3,570,000 | 3,200,000 | 6,770,000 |
| 2022 | — | | 4,450,000 | 4,450,000 |
| 2021 | — | | 4,500,000 | 4,500,000 |
Matthew Friend | 2023 | 1,785,000 | 640,000 | 2,425,000 |
| 2022 | — | | 890,000 | 890,000 |
| 2021 | — | | 900,000 | 900,000 |
Andrew Campion | 2023 | 1,785,000.00 | | 640,000 | 2,425,000 |
| 2022 | — | | 890,000 | 890,000 |
| 2021 | — | | 900,000 | 900,000 |
Heidi O'Neill | 2023 | 1,785,000.00 | | 640,000 | 2,425,000 |
| 2022 | — | | 890,000 | 890,000 |
| 2021 | — | | 900,000 | 900,000 |
Mark Parker | 2023 | — | | — | | — | |
| 2022 | — | | 4,450,000 | 4,450,000 |
| 2021 | — | | 4,500,000 | | 4,500,000 | |
(a)Amounts shown were earned for performance in the applicable fiscal year under our PSP.
(b)Amounts shown were earned for performance during the three-year period ending with the applicable fiscal year under our LTIP.
(6)For fiscal 2023, includes Company matching contributions to the 401(k) Plan in the amount of $15,250 for each of the Named Executive Officers. The amount for Mr. Donahoe also includes $3,920,000 in charitable matching contributions made by the Company, $110,365 in aggregate incremental cost to the Company for personal use of the Company's aircraft, as well as the value of Company-related merchandise and security services. The amount for Mr. Parker also includes $6,440,000 in charitable matching contributions made by the Company, $127,804 in aggregate incremental cost to the Company for personal use of the Company' aircraft, $54,806 in security services, as well as the value of Company-related merchandise. The aggregate incremental cost for personal use of the Company's aircraft is determined based on the variable operating cost to the Company, including the cost of fuel, maintenance, crew travel expenses, landing fees, parking fees, in-flight food and beverage, and other smaller variable costs associated with each flight. The amounts for Mr. Donahoe and Mr. Parker exclude the aggregate incremental cost to the Company for personal use of the Company's aircraft for which Mr. Donahoe or Mr. Parker, as applicable, reimbursed the Company in accordance with a time sharing agreement and as allowed under Federal Aviation Regulation 91.501(c) and (d).
(7)For fiscal 2023, includes the value of both the grant of PSUs for the fiscal 2023 – 2025 performance period (which were awarded as part of fiscal 2023 compensation) and the payout of LTIP awards for the fiscal 2021 – 2023 performance period (which were awarded as part of fiscal 2021 compensation). For fiscal 2022, includes the value of both the grant of PSUs for the fiscal 2022 – 2024 performance period (which were awarded as part of fiscal 2022 compensation) and the payout of LTIP awards for the fiscal 2020 – 2022 performance period (which were awarded as part of fiscal 2020 compensation).
GRANTS OF PLAN-BASED AWARDS IN FISCAL 2023
The following table sets forth information concerning the performance-based annual cash incentive opportunities and PSUs, RSUs, and stock options granted to the Named Executive Officers in fiscal 2023.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | ESTIMATED FUTURE PAYOUTS UNDER NON-EQUITY INCENTIVE PLAN AWARDS(1) | | ESTIMATED FUTURE PAYOUTS UNDER EQUITY INCENTIVE PLAN AWARDS(2) | ALL OTHER STOCK AWARDS: NUMBER OF SHARES OF STOCK OR UNITS(3) | ALL OTHER OPTION AWARDS: NUMBER OF SECURITIES UNDERLYING OPTIONS(4) | EXERCISE OR BASE PRICE OF OPTION AWARDS | GRANT DATE FAIR VALUE OF STOCK AND OPTION AWARDS(5) |
| | | THRESHOLD | TARGET | MAXIMUM | | THRESHOLD | TARGET | MAXIMUM |
NAME | GRANT DATE | APPROVAL DATE | ($) | ($) | ($) | | (#) | (#) | (#) | (#) | (#) | ($/SH) | ($) |
John Donahoe II | | | 1,500,000 | 3,000,000 | 4,500,000 | | | | | | | | |
| 8/1/2022 | 6/22/2022 | | | | | 18,328 | 73,312 | 146,624 | | | | 10,250,484 |
| 8/1/2022 | 6/22/2022 | | | | | | | | 25,984 | | | 2,969,971 |
| 8/1/2022 | 6/22/2022 | | | | | | | | | 225,564 | 114.30 | 7,247,371 |
Matthew Friend | | | 750,000 | 1,500,000 | 2,250,000 | | | | | | | | |
| 8/1/2022 | 6/10/2022 | | | | | 4,640 | 18,560 | 37,120 | | | | 2,595,059 |
| 8/1/2022 | 6/10/2022 | | | | | | | | 12,992 | | | 1,484,986 |
| 8/1/2022 | 6/10/2022 | | | | | | | | | 75,188 | 114.30 | 2,415,790 |
Andrew Campion | | | 750,000 | 1,500,000 | 2,250,000 | | | | | | | | |
| 8/1/2022 | 6/10/2022 | | | | | 4,640 | 18,560 | 37,120 | | | | 2,595,059 |
| 8/1/2022 | 6/10/2022 | | | | | | | | 12,992 | | | 1,484,986 |
| 8/1/2022 | 6/10/2022 | | | | | | | | | 75,188 | 114.30 | 2,415,790 |
Heidi O'Neill | | | 750,000 | 1,500,000 | 2,250,000 | | | | | | | | |
| 8/1/2022 | 6/10/2022 | | | | | 4,640 | 18,560 | 37,120 | | | | 2,595,059 |
| 8/1/2022 | 6/10/2022 | | | | | | | | 12,992 | | | 1,484,986 |
| 8/1/2022 | 6/10/2022 | | | | | | | | | 75,188 | 114.30 | 2,415,790 |
Mark Parker | | | — | — | — | | | | | | | | |
| 8/1/2022 | 6/10/2022 | | | | | — | — | — | | | | — | |
| 8/1/2022 | 6/10/2022 | | | | | | | | — | | | | — | |
| 8/1/2022 | 6/10/2022 | | | | | | | | | 71,608 | 114.30 | 2,300,765 |
(1)These amounts represent the potential performance-based annual cash incentive awards payable for performance during fiscal 2023 under our PSP. Under this plan, the Compensation Committee approved target awards for fiscal 2023 based on a percentage of the executive's base salary paid during fiscal 2023 as follows: Mr. Donahoe, 200%; Mr. Friend, 120%; Mr. Campion, 120%; Ms. O'Neill, 120%; and Mr. Parker, 0%. Fiscal 2023 PSP awards are earned between 0% and 150% of target based on Company performance on three equally-weighted metrics—Adjusted Revenue, Adjusted Digital Revenue, and Adjusted EBIT—during fiscal 2023. Actual award payouts earned in fiscal 2023 and paid in fiscal 2024 are shown in the Summary Compensation Table.
(2)These amounts represent grants of PSUs under the SIP which are earned between 0% and 200% of target based on Relative TSR for fiscal 2023 – 2025, subject to a cap of 100% of target if Absolute TSR for the performance period is negative. If Relative TSR is at or above the threshold performance goal, the Compensation Committee may adjust the earnout upwards or downwards by up to 20 percentage points based on a holistic assessment of the Company's performance during the three-year performance period with respect to employee engagement and inclusion, representation of diverse individuals in leadership positions, and sustainability. Earned PSUs will vest in August 2025 and are generally subject to continued employment through the vesting date. Vesting will be accelerated in certain circumstances as described below in the section "Potential Payouts Upon Termination or Change-in-Control". The PSUs accumulate cash dividend equivalents that are paid only when, and to the extent, they vest.
(3)Amounts reported in this column represent grants of RSUs under the SIP which vest in three equal installments on the first three anniversaries of the grant date. Vesting will be accelerated in certain circumstances as described below in the section "Potential Payouts Upon Termination or Change-in-Control". The RSUs accumulate cash dividend equivalents that are only paid upon vesting.
(4)Amounts reported in this column represent stock options granted under the AmendedSIP which become exercisable in four equal installments on the first four anniversaries of the grant date. Options become exercisable in certain circumstances as described below in the section "Potential Payouts Upon Termination or Change-in-Control". Each option has a maximum term of 10 years, subject to earlier termination in the event of the optionee's termination of employment.
(5)For stock awards, represents the grant date fair value of (a) RSUs based on the closing market price of our Class B Stock on the grant date and (b) PSUs based on a value of $139.82 per share computed using a Monte Carlo simulation based on the probable outcome of the performance condition as of the grant date. The Monte Carlo simulation was performed using the remaining performance period of 2.83 years and assuming an expected volatility of 34.97% and risk-free interest rate of 2.79%. The expected volatility was based on an analysis of the historical volatility of the Class B Stock on the grant date for 2.83 years. The risk-free interest rate corresponding with the remaining performance period was calculated using the U.S. Treasury (constant maturity) risk-free rates in effect on the grant date for a 2- and 3-year period. For option awards, represents the grant date fair value of stock options granted based on a value of $32.13 per share, calculated using the Black-Scholes option pricing model. The assumptions made in determining option values are disclosed in Note 9 to Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended May 31, 2023. Stock and option award values were computed in accordance with accounting guidance applicable to stock-based compensation.
OUTSTANDING EQUITY AWARDS AT MAY 31, 2023
The following table sets forth information concerning outstanding stock options, PSUs, and RSUs held by the Named Executive Officers at May 31, 2023.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| OPTION AWARDS | | STOCK AWARDS |
NAME | NUMBER OF SECURITIES UNDERLYING UNEXERCISED OPTIONS EXERCISABLE (#) | NUMBER OF SECURITIES UNDERLYING UNEXERCISABLE OPTIONS (#)(1) | OPTION EXERCISE PRICE ($) | OPTION EXPIRATION DATE | | NUMBER OF SHARES OR UNITS OF STOCK THAT HAVE NOT VESTED (#)(2) | MARKET VALUE OF SHARES OR UNITS OF STOCK THAT HAVE NOT VESTED ($) | EQUITY INCENTIVE PLAN AWARDS: NUMBER OF UNEARNED SHARES, UNITS OR OTHER RIGHTS THAT HAVE NOT VESTED (#)(3) | EQUITY INCENTIVE PLAN AWARDS: MARKET OR PAYOUT VALUE OF UNEARNED SHARES, UNITS OR OTHER RIGHTS THAT HAVE NOT VESTED ($) |
John Donahoe II | 177,633 | 59,210(4) | 102.160 | 1/13/2030 | | | | | |
| 767,544 | — | 102.160 | 1/13/2030 | | | | | |
| 119,788 | 119,787(5) | 97.610 | 8/1/2030 | | | | | |
| 38,210 | 114,629(6) | 167.510 | 8/1/2031 | | | | | |
| — | 225,564(7) | 114.300 | 8/1/2032 | | 55,536 | 5,845,719 | 177,428 | 18,676,071 |
Matthew Friend | 23,000 | — | | 57.870 | 7/15/2026 | | | | | |
| 30,000 | — | | 59.100 | 7/20/2027 | | | | | |
| 35,000 | — | | 77.540 | 8/1/2028 | | | | | |
| 27,072 | 9,023(8) | 83.120 | 8/1/2029 | | | | | |
| 38,599 | 38,598(5) | 97.610 | 8/1/2030 | | | | | |
| 10,918 | 32,751(6) | 167.510 | 8/1/2031 | | | | | |
| — | 75,188(7) | 114.300 | 8/1/2032 | | 52,022 | 5,475,836 | 43,281 | 4,555,758 |
Andrew Campion | 75,000 | — | | 57.870 | 7/15/2026 | | | | | |
| 75,000 | — | | 59.100 | 7/20/2027 | | | | | |
| 80,000 | — | | 77.540 | 8/1/2028 | | | | | |
| 65,744 | 21,914(8) | 83.120 | 8/1/2029 | | | | | |
| 38,599 | 38,598(5) | 97.610 | 8/1/2030 | | | | | |
| 12,737 | 38,210(6) | 167.510 | 8/1/2031 | | | | | |
| — | 75,188(7) | 114.300 | 8/1/2032 | | 72,936 | 7,677,243 | 43,281 | 4,555,758 |
Heidi O'Neill | 25,000 | — | | 77.540 | 8/1/2028 | | | | | |
| 46,020 | 15,340(8) | 83.120 | 8/1/2029 | | | | | |
| 38,599 | 38,598(5) | 97.610 | 8/1/2030 | | | | | |
| 12,737 | 38,210(6) | 167.510 | 8/1/2031 | | | | | |
| — | 75,188(7) | 114.300 | 8/1/2032 | | 52,843 | 5,562,254 | 43,281 | 4,555,758 |
Mark Parker | 110,000 | — | | 31.675 | 7/19/2023 | | | | | |
| 330,000 | — | | 38.760 | 7/18/2024 | | | | | |
| 330,000 | — | | 56.400 | 7/17/2025 | | | | | |
| 165,000 | — | | 57.870 | 7/15/2026 | | | | | |
| 165,000 | — | | 59.100 | 7/20/2027 | | | | | |
| 175,000 | — | | 77.540 | 8/1/2028 | | | | | |
| 226,701 | 75,567(8) | 83.120 | 8/1/2029 | | | | | |
| 133,098 | 133,096(5) | 97.610 | 8/1/2030 | | | | | |
| 12,131 | 36,390(6) | 167.510 | 8/1/2031 | | | | | |
| — | 71,608(7) | 114.300 | 8/1/2032 | | — | | — | | — | | — | |
(1)Stock options generally become exercisable in four equal installments on each of the first four anniversaries of the grant date.
(2)Reflects RSUs that vest as described in the table below:
| | | | | | | | | | | |
NAME | FISCAL YEAR OF GRANT | NUMBER OF UNVESTED UNITS | VESTING SCHEDULE |
John Donahoe II | 2023 | 25,984 | RSUs subject to three-year pro-rata vesting on 8/1/2023, 8/1/2024, and 8/1/2025 |
| 2022 | 17,249 | RSUs subject to three-year pro-rata vesting; 50% of the remaining units vest on 8/1/2023 and 50% vest on 8/1/2024 |
| 2021 | 12,303 | RSUs subject to three-year pro-rata vesting; 100% of the remaining units vest on 8/1/2023 |
Matthew Friend | 2023 | 12,992 | RSUs subject to three-year pro-rata vesting on 8/1/2023, 8/1/2024, and 8/1/2025 |
| 2022 | 4,928 | RSUs subject to three-year pro-rata vesting; 50% of the remaining units vest on 8/1/2023 and 50% vest on 8/1/2024 |
| 2021 | 30,138 | RSUs subject to four-year pro-rata vesting; 50% of the remaining units vested on 6/1/2023 and 50% vest on 6/1/2024 |
| 2021 | 3,964 | RSUs subject to three-year pro-rata vesting; 100% of the remaining units vest on 8/1/2023 |
Andrew Campion | 2023 | 12,992 | RSUs subject to three-year pro-rata vesting on 8/1/2023, 8/1/2024, and 8/1/2025 |
| 2022 | 5,749 | RSUs subject to three-year pro-rata vesting; 50% of the remaining units vest on 8/1/2023 and 50% vest on 8/1/2024 |
| 2021 | 50,231 | RSUs subject to four-year pro-rata vesting; 50% of the remaining units vested on 6/1/2023 and 50% vest on 6/1/2024 |
| 2021 | 3,964 | RSUs subject to three-year pro-rata vesting; 100% of the remaining units vest on 8/1/2023 |
Heidi O'Neill | 2023 | 12,992 | RSUs subject to three-year pro-rata vesting on 8/1/2023, 8/1/2024, and 8/1/2025 |
| 2022 | 5,749 | RSUs subject to three-year pro-rata vesting, 50% of the remaining units vest on 8/1/2023 and 50% vest on 8/1/2024 |
| 2021 | 30,138 | RSUs subject to four-year pro-rata vesting, 50% of the remaining units vested on 6/1/2023 and 50% vest on 6/1/2024 |
| 2021 | 3,964 | RSUs subject to three-year pro-rata vesting; 100% of the remaining units vest on 8/1/2023 |
(3)Reflects PSUs that vest as described in the table below, assuming performance at the maximum level (200%) for the fiscal 2023 – 2025 PSUs and performance at the target level (100%) for the fiscal 2022 – 2024 PSUs. In each case, PSUs will be earned between 0% and 200% based on Relative TSR over the applicable three-year performance period and subject to the People & Planet modifier. | | | | | | | | | | | |
NAME | FISCAL YEAR OF PERFORMANCE PERIOD | NUMBER OF UNVESTED UNITS | VESTING SCHEDULE |
John Donahoe II | 2023 – 2025 | 146,624 | Earned units will cliff vest on 8/1/2025 |
| 2022 – 2024 | 30,804 | Earned units will cliff vest on 8/1/2024 |
Matthew Friend | 2023 – 2025 | 37,120 | Earned units will cliff vest on 8/1/2025 |
| 2022 – 2024 | 6,161 | Earned units will cliff vest on 8/1/2024 |
Andrew Campion | 2023 – 2025 | 37,120 | Earned units will cliff vest on 8/1/2025 |
| 2022 – 2024 | 6,161 | Earned units will cliff vest on 8/1/2024 |
Heidi O'Neill | 2023 – 2025 | 37,120 | Earned units will cliff vest on 8/1/2025 |
| 2022 – 2024 | 6,161 | Earned units will cliff vest on 8/1/2024 |
(4)100% of these options will vest on January 13, 2024.
(5)50% of these options will vest on August 1, 2023 and 50% will vest on August 1, 2024.
(6)33.3% of these options will vest on August 1, 2023, 33.3% will vest on August 1, 2024, and 33.3% will vest on August 1, 2025.
(7)25% of these options will vest on August 1, 2023, 25% will vest on August 1, 2024, 25% will vest on August 1, 2025, and 25% will vest on August 1, 2026.
(8)100% of these options will vest on August 1, 2023.
OPTION EXERCISES AND STOCK VESTED DURING FISCAL 2023
The following table sets forth information concerning stock option exercises and vesting of RSUs during fiscal 2023 for each of the Named Executive Officers on an aggregated basis.
| | | | | | | | | | | | | | | | | |
| OPTION AWARDS | | STOCK AWARDS |
NAME | NUMBER OF SHARES ACQUIRED ON EXERCISE (#) | VALUE REALIZED ON EXERCISE ($) | | NUMBER OF SHARES ACQUIRED ON VESTING (#) | VALUE REALIZED ON VESTING ($) |
John Donahoe II | — | | — | | | 89,775 | 11,262,977 |
Matthew Friend | — | | — | | | 23,104 | 2,706,794 |
Andrew Campion | — | | — | | | 36,608 | 4,294,302 |
Heidi O'Neill | — | | — | | | 24,637 | 2,882,016 |
Mark Parker | 220,000 | 19,443,600 | | 16,041 | 1,833,486 |
EQUITY COMPENSATION PLAN INFORMATION
The following table summarizes information regarding outstanding awards and shares available for future issuance under equity compensation plans approved by shareholders and equity compensation plans that were not approved by shareholders as of May 31, 2023. The table does not reflect issuances made during fiscal 2024.
| | | | | | | | | | | | | | | | | |
| NUMBER OF SECURITIES TO BE ISSUED UPON EXERCISE OF OUTSTANDING OPTIONS, WARRANTS AND RIGHTS | | WEIGHTED- AVERAGE EXERCISE PRICE OF OUTSTANDING OPTIONS, WARRANTS AND RIGHTS(1) | NUMBER OF SECURITIES REMAINING AVAILABLE FOR FUTURE ISSUANCE UNDER EQUITY COMPENSATION PLANS (EXCLUDING SECURITIES REFLECTED IN COLUMN (a)) | |
PLAN CATEGORY | (a) | | (b) | (c) | |
Equity compensation plans approved by shareholders | 79,340,157 | (2) | $94.3954 | | 94,321,128 | (3) |
Equity compensation plans not approved by shareholders | — | | | — | | 3,432,320 | (4) |
Total | 79,340,157 | | $94.3954 | | 97,753,448 | |
(1)Weighted-average exercise prices do not reflect the shares that will be used upon the payment of outstanding awards of RSUs.
(2)Consists of 79,340,157 shares subject to awards of options, RSUs, PSUs (based on performance at the target level of 100%), and stock appreciation rights outstanding under the SIP.
(3)Includes 92,459,174 shares available for future issuance under the SIP and 1,861,954 shares available for future issuance under the Employee Stock Purchase Plan.
(4)Consists of 3,432,320 shares available for future issuance under the Foreign Subsidiary Employee Stock Purchase Plan, pursuant to which shares are offered and sold to employees of selected non-U.S. subsidiaries of the Company on substantially the same terms as those offered to U.S. employees under the shareholder-approved Employee Stock Purchase Plan as described above under "Compensation Discussion and Analysis—Compensation of our Named Executive Officers—Other Compensation—Employee Stock Purchase Plan".
NON-QUALIFIED DEFERRED COMPENSATION IN FISCAL 2023
| | | | | | | | | | | | | | | | | |
NAME | PLAN NAME | EXECUTIVE CONTRIBUTIONS IN FISCAL 2023(1) | AGGREGATE EARNINGS IN FISCAL 2023 | AGGREGATE WITHDRAWALS/ DISTRIBUTIONS IN FISCAL 2023 | AGGREGATE BALANCE AT MAY, 31 2023(2) |
John Donahoe II | DCP | — | $10,645 | — | $798,540 |
Matthew Friend | DCP | — | $(5,349) | — | $573,515 |
Andrew Campion | DCP | $461,539 | $36,035 | — | $3,860,874 |
Heidi O'Neill | DCP | $402,500 | $45,951 | — | $4,627,399 |
Mark Parker | DCP | $1,140,000 | $389,725 | — | $28,391,316 |
(1)All amounts reported in this column are also included in amounts reported in the Summary Compensation Table.
(2)Of the amounts reported in this column, the following amounts have been reported in the Summary Compensation Tables in this proxy statement or in prior year proxy statements: Mr. Donahoe, $63,695; Mr. Friend, $9,503; Mr. Campion, $2,445,433; Ms. O'Neill, $1,207,906; and Mr. Parker, $22,185,929.
NON-QUALIFIED DEFERRED COMPENSATION PLANS
The Named Executive Officers are eligible to participate in our Deferred Compensation Plan (the "DCP"). Participants in the DCP may elect in advance to defer up to 75 percent of their annual base salary, and up to 100 percent of their bonus and long-term cash incentive payments.
We may make annual profit sharing contributions to defined contribution retirement plans. The contributions are allocated among eligible employees based on a percentage of their total salary and bonus for the year. To the fullest extent permitted under Internal Revenue Code limitations, these contributions are made to employees' accounts under our qualified 401(k) Savings and Profit Sharing Plan. Contributions based on salary and bonus in excess of the tax law limit ($305,000 for fiscal 2023) are made as NIKE contributions under the DCP.
Amounts deferred under the DCP are credited to a participant's account under the DCP. Each participant may allocate his or her account among any combination of the investment options available under the DCP. Participants' accounts are adjusted to reflect the investment performance of the investment options selected by the participants. Participants can change the allocation of their account balances daily. The investment options available under the DCP consist of 18 mutual funds with a variety of investment objectives and five risk-based portfolios. The investment options had annual returns in fiscal 2023 ranging from -15.91% to 3.77%. Amounts credited to participants' accounts are invested by us in actual investments matching the investment options selected by the participants to ensure that we do not bear any investment risk related to participants' investment choices.
The portion of a participant's account attributable to elective deferrals, including investment returns, is fully vested at all times. The portion of a participant's account attributable to NIKE contributions, including investment returns, is fully vested after the participant has been employed by us for five years. All of the Named Executive Officers, other than Mr. Donahoe, are fully vested in their NIKE contributions.
Each time they elect to defer compensation, participants make an election regarding distribution of the compensation deferred under the election (as adjusted to reflect investment performance). A participant may elect for distribution to be made in a lump sum at the beginning of a predetermined year while the participant is still employed or in service (but no sooner than the fourth year after the year in which the distribution election is submitted). Alternatively, a participant may elect for distribution to be made in a lump sum or in quarterly installments over five, ten, or fifteen years after termination of employment or service. Participants have limited rights to change their distribution elections. Participants may make a hardship withdrawal under certain circumstances. Subject to certain limitations, a participant may also at any time request to withdraw amounts from his or her account balance that were vested as of December 31, 2004 (and any subsequent investment returns on such amount). If such request is approved, the participant may withdraw 90% of the amount requested, and the remaining 10% will be permanently forfeited.
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL
CHANGE-IN-CONTROL COMPENSATION — ACCELERATION OF EQUITY AWARDS
All unvested stock option, RSU, and PSU awards are subject to accelerated vesting upon the occurrence of two events (a "double-trigger"): there is a "change-in-control"; and the Named Executive Officer's employment is terminated by us without "cause" or by the Named Executive Officer for "good reason", in each case between the change-in-control (or shareholder approval of the change-in-control, if earlier) and the second anniversary of the change-in-control. Stock options will be exercisable for four years following termination of employment, but not beyond each option's original 10-year term. PSUs will vest at 100% of target. Accelerated vesting of stock options, RSUs, and PSUs will also occur if we are acquired and the acquiring company does not assume the outstanding options, RSUs, or PSUs. For purposes of our stock awards, "change-in-control" is generally defined to include:
•the acquisition by any person of 50% or more of our outstanding Class A Stock or, if the Class A Stock no longer elects a majority of directors, the acquisition by any person of 30% or more of our total outstanding Common Stock;
•the nomination (and subsequent election) in a two-year period of a majority of our directors by persons other than the incumbent directors;
•a sale of all or substantially all of our assets; and
•an acquisition of NIKE through a merger, consolidation, or share exchange.
For purposes of our stock awards, "cause" generally includes willful and continued failure to substantially perform assigned duties and willful engagement in illegal conduct materially injurious to us, and "good reason" generally includes a material diminution in position or duties, a salary reduction or material reduction in other benefits, and a home office relocation of over 50 miles.
The following table shows the estimated benefits that would have been received by the Named Executive Officers if double-trigger accelerated vesting had occurred on May 31, 2023, when the closing price of our Class B Stock was $105.26 per share.
| | | | | | | | | | | |
NAME | STOCK AWARD ACCELERATION(1) | STOCK OPTION ACCELERATION(2) | TOTAL |
John Donahoe II | $16,804,970 | $1,099,922 | $17,904,892 |
Matthew Friend | $8,077,969 | $495,044 | $8,573,013 |
Andrew Campion | $10,279,377 | $780,451 | $11,059,828 |
Heidi O'Neill | $8,164,388 | $634,903 | $8,799,291 |
Mark Parker | — | $2,691,237 | $2,691,237 |
(1)Information regarding unvested RSUs and PSUs held by each Named Executive Officer is set forth in the Outstanding Equity Awards table above. The amounts in the table above represent the number of unvested RSUs and PSUs (at 100% of target) multiplied by the closing price of our Class B Stock on May 31, 2023.
(2)Information regarding outstanding unvested stock options held by each Named Executive Officer is set forth in the Outstanding Equity Awards table above. The amounts in the table above represent the aggregate value as of May 31, 2023 of those options using the excess of the per share closing price of our Class B Stock on May 31, 2023 over the per share exercise price, multiplied by the number of unvested option shares for each Named Executive Officer.
BENEFITS TRIGGERED ON CERTAIN EMPLOYMENT TERMINATIONS
STOCK OPTION ACCELERATION AND EXTENSION
As of May 31, 2023, each Named Executive Officer held stock options as listed in the Outstanding Equity Awards table above. Under the terms of the stock options held by each Named Executive Officer, upon the death or disability of the holder, all unvested options will vest and will be exercisable for four years following termination of employment, but not beyond each option's original 10-year term. If death or disability of a Named Executive Officer had occurred on May 31, 2023, the aggregate value of those options is as set forth in the "Stock Option Acceleration" column of the Change-in-Control Compensation – Acceleration of Equity Awards table above.
Under the terms of the stock options held by each Named Executive Officer that were granted after fiscal 2020, upon a termination of employment due to a "divestiture" or "reduction in force" that occurs at least six months following the grant date, and subject to the holder signing a general waiver and release of claims, options that are scheduled to vest within one year following the termination will vest and all vested options will be exercisable for one year following termination of employment, but not beyond each option's original 10-year term. The value of the unvested stock options held by each Named Executive Officer as of May 31, 2023 that would have become vested if a termination due to a "divestiture" or "reduction in force" had occurred on that date is $458,189 for Mr. Donahoe, $147,637 for each of Messrs. Friend and Campion and Ms. O'Neill, and $509,092 for Mr. Parker.
Under the terms of all the stock options held by the Named Executive Officers, options that have been outstanding for at least one year will be subject to continued vesting if the Committee's discretion,holder retires after reaching age 55 with at least 5 years of service (or accelerated vesting if the holder retires after reaching age 60 with at least 5 years of service), and the Committee has not determined future awards or who might receive them. As a result, the benefits thatvested options will be awarded underexercisable for four years following termination of employment, but not beyond each option's original 10-year term. If the Amended PlanNamed Executive Officers had retired on May 31, 2023, the aggregate value of stock options subject to retirement vesting would have been $1,099,922 for Mr. Donahoe, $634,903 for Ms. O'Neill, and $2,691,237 for Mr. Parker. Messrs. Friend and Campion are not eligible for retirement vesting because these Named Executive Officers have not reached age 55.
STOCK AWARD ACCELERATION
determinable at this time. The awards granted for fiscal 2020, which would not have changed ifAs of May 31, 2023, the Amended Plan had been in place instead of the Current Plan, areNamed Executive Officers held unvested RSUs and PSUs as set forth in the Outstanding Equity Awards table above. Under the terms of their award agreements, all unvested RSUs and PSUs will immediately vest upon the death or disability of the holder, with PSUs vesting at 100% of target. The value of the unvested RSUs and PSUs held by each Named Executive Officer as of May 31, 2023 that would have become vested if death or disability had occurred on that date is as set forth in the "Stock Award Acceleration" column of the Change-in-Control Compensation — Acceleration of Equity Awards table above.
Under the terms of the RSUs that were granted to the Named Executive Officers after fiscal 2020 (excluding the stock-based transition awards granted to Messrs. Friend and Campion and Ms. O'Neill) and all PSUs held by the Named Executive Officers, upon a termination of employment due to a "divestiture" or "reduction in force" that occurs at least six months following table:
|
| | |
NAME AND POSITION | DOLLAR VALUE ($) | NUMBER OF SHARES / UNITS |
John J. Donahoe II President and Chief Executive Officer | 44,516,498 | 1,212,922 |
Mark G. Parker Executive Chairman, and former President and Chief Executive Officer | 9,540,639 | 350,392 |
Matthew Friend Executive Vice President and Chief Financial Officer | 1,061,678 | 40,908 |
Andrew Campion Executive Vice President and Chief Operating Officer, and former Chief Financial Officer | 2,766,794 | 101,614 |
Hilary K. Krane Executive Vice President, Chief Administrative Officer, and General Counsel | 2,766,794 | 101,614 |
Monique Matheson Executive Vice President, Global Human Resources | 2,766,794 | 101,614 |
John F. Slusher Executive Vice President, Global Sports Marketing | 2,766,794 | 101,614 |
Elliott J. Hill Former President, Consumer and Marketplace | 3,100,764 | 113,878 |
Eric D. Sprunk Former Chief Operating Officer | 3,100,764 | 113,878 |
Current executive officers, as a group | 65,223,931 | 1,978,605 |
Non-employee directors, as a group | 1,925,546 | 21,877 |
Non-executive officer employees, as a group | 1,770,773,706 | 20,852,608 |
U.S. FEDERAL INCOME TAX INFORMATION
The following isthe grant date, and subject to the holder signing a general summarywaiver and release of claims, RSUs and PSUs that are scheduled to vest within one year following the termination will vest, with PSUs vesting at 100% of target. The value of the U.S. federal income tax consequencesunvested RSUs and PSUs held by each Named Executive Officer as of awards underMay 31, 2023 that would have become vested if a termination due to a "divestiture" or "reduction in force" had occurred on that date is $3,114,644 for Mr. Donahoe, $1,132,493 for Mr. Friend, $1,175,755 for each of Mr. Campion and Ms. O'Neill, and $0 for Mr. Parker.
PAYMENTS UNDER NONCOMPETITION AGREEMENTS
We have a noncompetition agreement with Mr. Donahoe that extends for 18 months following the Amended Plantermination of his employment with us and a noncompetition agreement with Mr. Parker that extends for two years following the termination of his employment with us. Under these agreements, if Mr. Donahoe's employment is terminated by us without "cause" (as defined in his agreement), or if Mr. Parker's employment is terminated by us, we will make monthly payments to the Company and to participants inexecutive during the Amended Plan who are citizens or residents of the United States for U.S. federal tax purposes. The summary is based on the Internal Revenue Code of 1986, as amended (the "Code"), applicable Treasury Regulations and administrative and judicial interpretations thereof, each as in effect on the date of this proxy statement and is, therefore, subject to future changes in the law, possibly with retroactive effect. The summary is general in nature and does not purport to be legal or tax advice. Furthermore, the summary does not address issues relating to any U.S. gift or estate tax consequences or the consequences of any state, local or foreign tax laws.
STOCK OPTIONS
Nonstatutory Stock Options. A participant receiving nonstatutory stock options should not recognize taxable income at the time of grant. A participant should generally recognize ordinary compensation incomenoncompetition period in an amount equal to one-twelfth of his then current annual salary and target PSP award ("Annual NIKE Income"). The agreements provide further that if the excess, if any, of the fair market value of the option shares on exercise of the nonstatutory stock options over the exercise price thereof. In general,executive voluntarily resigns, we will be entitledmake monthly payments to deduct from our taxable incomehim during the amount that the individual is required to include in ordinary income at the time of such inclusion. Additional special rules apply if a participant exercises a nonstatutory stock option by paying the exercise price, in whole or in part, by the transfer of shares of common stock to the Company.
Incentive Stock Options. A participant granted an incentive stock option will not generally recognize taxable income at the time of grant or, subject to certain conditions, at the time of exercise, although he or she may be subject to alternative minimum tax. If the participant holds the shares acquired upon exercise of an incentive stock option for at least two years after the grant date and for at least one year after the exercise date, upon disposition of the shares by the participant, the difference, if any, between the sale price of the shares and the exercise price of the option will be treated as long-term capital gain or loss. In general, if a disqualifying disposition should occur (i.e., the shares acquired upon exercise of the stock option are disposed of within the later of two years from the date of grant or one year from the date of exercise), a participant will generally recognize ordinary compensation income in the year of dispositionnoncompetition period in an amount equal to one-twenty-fourth of his then current Annual NIKE Income. However, commencement of the excess,above-described monthly payments will be delayed until after the six-month period following the executive's separation from service, and all payments that he would otherwise have received during that period will be paid in a lump sum promptly following the end of the period, together with interest at the prime rate. If employment is terminated without "cause" (as defined in the applicable agreement), the parties may mutually agree to waive the covenant not to compete, and if employment is terminated for "cause", we may unilaterally waive the covenant. If the covenant is waived, we will not be required to make the payments described above for the months as to which the waiver applies. Assuming that Mr. Donahoe's employment had been terminated on May 31, 2023 and the covenant was not waived, during the 18-month period ending November 30, 2024 we would have been required to pay Mr. Donahoe $375,000 per month if the termination was by us without "cause", or $187,500 per month if he had voluntarily resigned. Assuming that Mr. Parker's employment had been terminated on May 31, 2023 and the covenant was not waived, during the 24-month period ending May 31, 2025 we would have been required to pay Mr. Parker $83,333 per month if the termination was by us, or $41,667 per month if he had voluntarily resigned.
We have noncompetition agreements with each of the other Named Executive Officers on generally the same terms as Mr. Donahoe, except that the noncompetition period is one year, we may unilaterally waive the covenant in all cases (including a termination without "cause"), the monthly payments are one-twelfth or one-twenty-fourth of the executive's then current annual salary (instead of their Annual NIKE Income), and payments may commence on termination. Assuming that the employment of each of these Named Executive Officers had been terminated on May 31, 2023 and the covenant was not waived, during the 12-month period ending May 31, 2024 we would have been required to pay them $104,167 per month if the termination was by us without "cause", or $52,083 per month if they had voluntarily resigned.
CEO PAY RATIO
NIKE's pay and benefits are designed to be competitive and equitable, meet the diverse needs of our global teammates, and reinforce our values. We pay for performance and impact by linking incentive pay to Company performance and seek to invest in positive experiences that have the greatest impact on the engagement and well-being of our employees. The executive compensation program is highly incentive-based and weighted towards long-term awards to emphasize long-term performance
and support retention. Our executive compensation program is designed to attract and retain top-tier talent in a competitive market and to "pay for performance" in order to drive business results and maximize shareholder value.
For fiscal 2023, our last completed fiscal year:
•The employee identified at the median of all NIKE employees (other than our CEO) was a retail store employee in Canada;
•The annual total compensation of the median employee was $33,646;
•The annual total compensation of our CEO, Mr. Donahoe, was $32,789,885; and
•The estimated ratio of the annual total compensation of our CEO to the median annual total compensation of all other NIKE employees was 975 to 1.
This pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules based on the methodology described below. The SEC rules for identifying the median compensated employee and calculating the pay ratio allow companies to adopt a variety of methodologies, apply certain exclusions, and make reasonable estimates and assumptions that reflect their compensation practices. As such, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies may utilize different methodologies, exclusions, estimates, and assumptions in calculating their own pay ratios.
METHODOLOGY
For purposes of calculating this pay ratio, we used the same median employee that was identified in fiscal 2022, as we believe there has been no change in our employee population, our compensation arrangements, or our median employee's circumstances that would significantly affect our pay ratio disclosure. The determination of the median employee was made in fiscal 2022 using the methodology described below, and the median employee's fiscal 2023 annual total compensation was calculated based on the Summary Compensation Table rules used for our Named Executive Officers (in accordance with Item 402(c)(2)(x) of Regulation S-K).
FISCAL 2022 METHODOLOGY
We use the first business day in May as the date to determine the median employee. The first business day in May for fiscal 2022 was May 2, 2022. At that time, we had approximately 77,239 employees globally. After applying the "de minimis exemption" under the SEC rules, which permits us to exclude non-U.S. employees accounting for 5% or less of our total employee population, we excluded the 3,656 employees in the jurisdictions identified below, and our employee population consisted of approximately 73,583 employees.
| | | | | | | | | | | | | | | | | | | | | | | |
Slovenia | 1 | | Denmark | 68 | | Malaysia | 206 |
Sri Lanka | 4 | | Uruguay | 71 | | Thailand | 206 |
United Arab Emirates | 5 | | Czech Republic | 73 | | South Africa | 207 |
Croatia | 6 | | Hungary | 82 | | Vietnam | 252 |
Philippines | 19 | | Indonesia | 85 | | Israel | 266 |
Macau | 42 | | Ireland | 87 | | Poland | 276 |
New Zealand | 44 | | Switzerland | 113 | | Chile | 285 |
Norway | 45 | | Greece | 135 | | Hong Kong | 323 |
Sweden | 55 | | Portugal | 148 | | Turkey | 340 |
Brazil | 61 | | Austria | 151 | | | |
Of the 73,583 employees included in the CEO Pay Ratio calculation, approximately 75% were full-time, 49% were in retail jobs, and 51% were located in the United States.
To identify our median employee we calculated annual compensation for fiscal 2022 based on base salary or hourly wages, as applicable. For the majority of our employees, base salary or hourly wages comprise the majority of their compensation. To determine wages for hourly employees, we used each individual's pay rate and estimated scheduled hours in the applicable Human Resources system of record.
After determining the annual compensation for our employee population as described above, we identified a subset of approximately 100 individuals representing the potential median employee population. For this subset, we calculated each employee's annual total compensation in U.S. dollars for fiscal 2022 based on the Summary Compensation Table rules used for our Named Executive Officers (in accordance with Item 402(c)(2)(x) of Regulation S-K). Compensation for permanent employees hired during the fiscal year was annualized, compensation for non-U.S. employees was converted into U.S. dollars using the applicable currency conversion rate as reported in the Human Resources system of record for the median employee determination date, and the median employee was then selected from this subset.
PAY VERSUS PERFORMANCE
This disclosure has been prepared in accordance with Item 402(v) of Regulation S-K under the Exchange Act and does not necessarily reflect how the Compensation Committee evaluates compensation decisions in light of Company or individual performance. The Compensation Committee did not consider the pay versus performance disclosure below in making its compensation decisions for any of the fair market valuefiscal years shown. For discussion of how the Compensation Committee seeks to align pay with performance when making compensation decisions, please review the section above titled "Compensation Discussion and Analysis".
PAY VERSUS PERFORMANCE TABLE
The following table sets forth compensation information of our CEO and our non-CEO NEOs and Company performance for the fiscal years listed below, in accordance with Item 402(v) of Regulation S-K.
| | | | | | | | | | | | | | | | | | | | | | | | | | |
YEAR | SUMMARY COMPENSATION TABLE TOTAL FOR CEO(1)(2) | COMPENSATION ACTUALLY PAID TO CEO(1)(3) | AVERAGE SUMMARY COMPENSATION TABLE TOTAL FOR NON-CEO NEOs(1)(4) | AVERAGE COMPENSATION ACTUALLY PAID TO NON-CEO NEOs(1)(5) | VALUE OF INITIAL FIXED $100 INVESTMENT BASED ON | NET INCOME(7) (IN MILLIONS) | ADJUSTED REVENUE(8) (IN MILLIONS) |
TOTAL SHAREHOLDER RETURN(6) | PEER GROUP TOTAL SHAREHOLDER RETURN(6) |
2023 | $32,789,885 | $29,391,856 | $10,117,055 | $7,259,680 | $109.51 | $116.84 | $5.070 | $52.593 |
2022 | $28,838,060 | $19,617,425 | $9,185,111 | $7,482,733 | $122.26 | $120.40 | $6.046 | $47.406 |
2021 | $32,920,708 | $77,444,844 | $17,107,315 | $28,986,814 | $139.58 | $141.30 | $5.727 | $43.769 |
(1) John Donahoe II served as the Company's CEO for each fiscal year presented. The individuals comprising the non-CEO NEOs for each fiscal year presented are Matthew Friend, Andrew Campion, Heidi O'Neill, and Mark Parker.
(2) Represents the amount of total compensation reported for our CEO, Mr. Donahoe, in the "Total" column of the option shares at"Summary Compensation Table" for each fiscal year presented.
(3) The dollar amounts reported in the time"Compensation Actually Paid to CEO" column have been calculated in accordance with Item 402(v) of exercise (or, if less,Regulation S-K and do not reflect compensation actually earned, realized, or received by the CEO. These amounts reflect the amount realizedset forth in the "Total" column of the "Summary Compensation Table" for each fiscal year presented, with certain adjustments as described in the table below, in accordance with the requirements of Item 402(v) of Regulation S-K:
| | | | | | | | | | | | | | |
| | 2023 | 2022 | 2021 |
| Summary Compensation Table ("SCT") total for CEO | $32,789,885 | $28,838,060 | $32,920,708 |
| Deduction for amounts reported under the "Stock Awards" column in the SCT | $13,220,455 | $12,061,812 | $3,602,980 |
| Deduction for amounts reported under the "Option Awards" column in the SCT | $7,247,371 | $6,782,995 | $5,402,416 |
| Total deductions from SCT | $20,467,826 | $18,844,807 | $9,005,396 |
| Year end fair value of equity awards | $17,801,878 | $9,719,590 | $17,094,821 |
| Change in fair value of outstanding and unvested equity awards | $(4,440,691) | $(6,894,427) | $23,324,355 |
| Change in fair value of equity awards granted in prior years that vested in the year | $3,461,158 | $6,578,196 | $12,885,143 |
| Value of dividends on stock awards | $247,452 | $220,812 | $225,212 |
| Total adjustments | $17,069,797 | $9,624,172 | $53,529,532 |
| Compensation actually paid | $29,391,856 | $19,617,425 | $77,444,844 |
Equity valuations: Stock option grant date fair values are calculated based on disposition), over the exercise price thereof. We are not entitled to any deduction on accountBlack-Scholes option pricing model as of the grant date; adjustments have been made using stock option fair values as of incentiveeach measurement date using the stock options or the participant’s exerciseprice as of the option to acquire common stock. However,measurement date and updated assumptions (i.e., term, volatility, dividend yield, risk free rates) as of the measurement date. PSU grant date fair values are calculated using a Monte Carlo simulation based on the probable outcome of the performance condition as of the grant date; adjustments have been made using a revised Monte Carlo valuation as of fiscal year end. RSU grant date fair values are calculated using the stock price as of the grant date; adjustments have been made using the stock price as of fiscal year end and as of each vesting date.
(4) Represents the average of the amounts of total compensation reported for our non-CEO NEOs, as a group, in the event"Total" column of the "Summary Compensation Table" for each fiscal year presented.
(5) The dollar amounts reported in the "Average Compensation Actually Paid to Non-CEO NEOs" column have been calculated in accordance with Item 402(v) of Regulation S-K and do not reflect compensation actually earned, realized, or received by the non-CEO NEOs. These amounts reflect the average of the amounts set forth in the "Total" column of the "Summary Compensation Table" for each fiscal year presented for the applicable non-CEO NEOs, with certain adjustments as described in the table below, in accordance with the requirements of Item 402(v) of Regulation S-K:
| | | | | | | | | | | | | | |
| | 2023 | 2022 | 2021 |
| Average Summary Compensation Table total for non-CEO NEOs | $10,117,055 | $9,185,111 | $17,107,315 |
| Deduction for amounts reported under the "Stock Awards" column in the SCT | $3,060,034 | $2,191,148 | $6,370,788 |
| Deduction for amounts reported under the "Option Awards" column in the SCT | $2,387,034 | $2,153,362 | $2,806,263 |
| Total deductions from SCT | $5,447,068 | $4,344,510 | $9,177,051 |
| Year end fair value of equity awards | $4,815,268 | $2,257,926 | $15,020,734 |
| Change in fair value of outstanding and unvested equity awards | $(1,929,436) | $(2,839,461) | $6,098,187 |
| Change in fair value of equity awards granted in prior years that vested in the year | $(373,621) | $3,134,180 | $(186,300) |
| Value of dividends on stock awards | $77,482 | $89,487 | $123,929 |
| Total adjustments | $2,589,693 | $2,642,132 | $21,056,550 |
| Average compensation actually paid | $7,259,680 | $7,482,733 | $28,986,814 |
Equity valuations: Stock option grant date fair values are calculated based on the Black-Scholes option pricing model as of the grant date; adjustments have been made using stock option fair values as of each measurement date using the stock price as of the measurement date and updated assumptions (i.e., term, volatility, dividend yield, risk free rates) as of the measurement date. PSU grant date fair values are calculated using a subsequent disqualifying dispositionMonte Carlo simulation based on the probable outcome of such sharesthe performance condition as of commonthe grant date; adjustments have been made using a revised Monte Carlo valuation as of fiscal year end. RSU grant date fair values are calculated using the stock acquiredprice as of the grant date; adjustments have been made using the stock price as of fiscal year end and as of each vesting date.
(6) Peer group total shareholder return ("TSR") uses the Dow Jones U.S. Footwear Index, which the Company also uses in the stock performance graph required by Item 201(e) of Regulation S-K included in the Company's Annual Report on Form 10-K for fiscal 2023. These comparisons assume $100 (including reinvested dividends) was invested for the period starting May 31, 2020 through the end of the listed fiscal year in (a) the Company and (b) the Dow Jones U.S. Footwear Index, respectively. Historical stock performance is not necessarily indicative of future stock performance.
(7) Reflects net income calculated in accordance with generally accepted accounting principles ("GAAP") in the Company's Consolidated Statements of Income included in the Company's Annual Reports on Form 10-K for the applicable fiscal year.
(8) Reflects Adjusted Revenue calculated based on GAAP revenue excluding the impact of acquisitions and divestitures; changes in accounting principles; unanticipated restructurings; unanticipated exchange rate fluctuations; other extraordinary, unusual, or infrequently occurring items; and the unanticipated impact from Nike Virtual Studios and RTFKT. We determined Adjusted Revenue to be the most important financial performance measure used to link Company performance to compensation actually paid ("CAP") to our CEO and non-CEO NEOs in fiscal 2023, as required pursuant to Item 402(v) of Regulation S-K. This performance measure may not have been the exercisemost important financial performance measure for prior fiscal years, and we may determine a different financial performance measure to be the most important financial performance measure in future years.
DESCRIPTION OF RELATIONSHIPS
The following charts show graphically the relationships over the past three fiscal years of an incentive stock option under circumstances resulting in taxable compensationthe CAP amounts for our CEO and non-CEO NEOs as compared to our cumulative TSR, peer group TSR, GAAP net income, and Adjusted Revenue as well as the participant, in general, we should be entitled to a tax deduction equal to the amount treated as taxable compensation to the
relationship between TSR and peer group TSR.
CAP VERSUS COMPANY TSR & PEER GROUP TSR
CAP VERSUS NET INCOME
participant. Additional special rules apply if a participant exercises an incentive stock option by payingCAP VERSUS ADJUSTED REVENUE
TABULAR LIST OF PERFORMANCE METRICS
The following table lists the exercise price, in whole or in part, by the transfer of shares of common stock to the Company.
STOCK APPRECIATION RIGHTS
No income will be realized by a participant upon grant of a stock appreciation right. Upon the exercise of a stock appreciation right, the participant will recognize ordinary compensation income in an amount equal to the fair market value of the payment received in respect of the stock appreciation right. We will be able to deduct this same amount for U.S. federal income tax purposes.
RESTRICTED STOCK AWARDS
A recipient of a restricted stock award generally will recognize compensation taxable as ordinary income when the shares cease to be subject to restrictions in an amount equal to the excess of the fair market value of the shares on the date the restrictions lapse over the amount, if any, paid by the participant with respect to the shares.
Instead of postponing the federal income tax consequences of a restricted stock award until the restrictions lapse, the participant may elect to recognize compensation taxable as ordinary incomethree financial performance measures that, in the year ofCompany's assessment, represent the award in an amount equalmost important performance measures used to the fair market value of the shares at the time of receipt. This election is made under Section 83(b) of the Code. A Section 83(b) election is made by filing a written notice with the Internal Revenue Service office with which the participant files his or her federal income tax return. The notice must be filed within 30 days of the date of grant of the restricted stock awardlink CAP for which the election is made and must meet certain technical requirements.our NEOs to Company performance for fiscal 2023.
The tax treatment of a subsequent disposition of restricted stock will depend upon whether the participant has made a timely and proper Section 83(b) election. If the participant makes a timely and proper Section 83(b) election, when the participant sells the restricted shares, the participant will have short-term or long-term capital gain or loss, as the case may be, equal to the difference between the amount the participant received from the sale and the tax basis of the shares sold. If no Section 83(b) election is made, any disposition after the restrictions lapse generally will result in short-term or long-term capital gain or loss, as the case may be, equal to the difference between the amount the participant received from the sale and the tax basis of the shares sold. The tax basis of the shares generally will be equal to the amount, if any, paid by the participant with respect to the shares, plus the amount of taxable ordinary income recognized by the participant either at the time the restrictions lapsed or at the time of the Section 83(b) election, as the case may be. If the participant forfeits the shares to the Company (e.g., upon the participant’s termination prior to expiration of the restriction period), the participant may not claim a deduction with respect to the income recognized as a result of making a Section 83(b) election.
Any dividends paid with respect to shares of restricted stock generally will be taxable as ordinary income to the participant at the time the dividends are received.
RESTRICTED STOCK UNITS
A participant generally will not recognize income at the time a restricted stock unit is granted. When any part of a restricted stock unit is issued or paid, the participant generally will recognize compensation taxable as ordinary income at the time of such issuance or payment in an amount equal to the cash and then fair market value of any shares the participant receives.
OTHER AWARDS
The U.S. federal income tax consequences of other awards under the Plan will depend upon the specific terms of each award.
TAX CONSEQUENCES TO THE COMPANY
In the foregoing cases, the Company generally will be entitled to a deduction at the same time and in the same amount as a participant recognizes ordinary income, subject to certain limitations imposed under the Code.
SECTION 409A
We intend that awards granted under the Plan comply with, or otherwise be exempt from, Section 409A of the Code.
TAX WITHHOLDING
The Company is authorized to deduct or withhold from any award granted or payment due under the Plan, or require a participant to remit to the Company, the amount of any withholding taxes due in respect of the award or payment. Tendering shares held by the participant or share withholding for taxes is permitted.
| | |
Adjusted Revenue |
Adjusted EBIT |
Stock price |
.
20202023 PROXY STATEMENT 6156
SHAREHOLDER PROPOSAL
| | | | | |
| |
PROPOSAL 3 FREQUENCY OF ADVISORY VOTES ON EXECUTIVE COMPENSATION |
|
In accordance with the requirements of Section 14A of the Exchange Act, we are submitting to shareholders an advisory vote on whether to present our advisory "say-on-pay proposal" to shareholders every one year, every two years, or every three years. Under Exchange Act rules, we are required to present this "say-on-pay vote frequency proposal" at least once every six years. When shareholders last voted on a say-on-pay vote frequency proposal, at the 2017 Annual Meeting of Shareholders, the Board recommended holding a say-on-pay vote annually, and approximately 94% of the votes cast were voted in favor of holding such a vote annually. The Board continues to value shareholder feedback on our executive compensation program, and believes that an annual say-on-pay vote offers a strong mechanism for all shareholders to provide timely input on the Company's executive compensation practices and policies. Because your vote is advisory, it will not be binding on the Board. However, the Board values shareholder opinions, and will take into account the outcome of the vote when considering the frequency of future say-on-pay votes. |
|
BOARD RECOMMENDATION |
| The Board of Directors recommends that shareholders vote for future shareholder advisory votes on executive compensation to be held every 1 YEAR. |
| |
AUDIT MATTERS
| | | | | | | | | | | | | | | | | |
| | | | | |
PROPOSAL 4 RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM |
|
The Audit & Finance Committee of the Board of Directors has sole authority to retain, with shareholder ratification, the Company's independent registered public accounting firm. The Audit & Finance Committee directly oversees the firm's work with respect to the annual audit of the Company's consolidated financial statements and internal control over financial reporting and approves all audit engagement fees and terms. At least annually, the Audit & Finance Committee evaluates the independent registered public accounting firm's qualifications, performance, and independence, including a review and evaluation of its lead partner. The Audit & Finance Committee is also involved in the selection of the new lead engagement partner following mandated rotation of the firm’s lead partner, and is responsible for considering the benefits of rotation of the Company’s independent registered public accounting firm. The Audit & Finance Committee has appointed PricewaterhouseCoopers LLP ("PwC") to audit the Company's consolidated financial statements and internal control over financial reporting for the fiscal year ending May 31, 2024 and to render other professional services as required. PwC has served as the Company's independent registered public accounting firm for many years. The Audit & Finance Committee and the Board of Directors believe that the continued retention of PwC as the independent registered public accounting firm is in the best interests of the Company and its shareholders. Accordingly, the Audit & Finance Committee is submitting the appointment of PwC to shareholders for ratification. If the appointment is not ratified by our shareholders, the Audit & Finance Committee may reconsider whether it should appoint another independent registered public accounting firm. Representatives of PwC will be present at the Annual Meeting, will have the opportunity to make a statement if they desire to do so, and are expected to be available to respond to questions. Aggregate fees billed by the Company's independent registered public accounting firm, PwC, for audit services related to the most recent two fiscal years, and for other professional services incurred in the most recent two fiscal years, were as follows: |
| TYPE OF SERVICE | 2023 | 2022 | |
| Audit Fees(1) | $18.7 million | $18.1 million | |
| Audit-Related Fees(2) | 0.3 million | 0.3 million | |
| Tax Fees(3) | 0.2 million | 0.1 million | |
| All Other Fees(4) | 0.8 million | 0.8 million | |
| Total | $20.0 million | $19.3 million | |
(1)Comprises the audits of the Company's annual financial statements and internal controls over financial reporting, and reviews of the Company's quarterly financial statements, as well as statutory audits of Company subsidiaries, attest services and consents to SEC filings. (2)Comprises services including consultations regarding financial accounting and reporting. (3)Comprises services for tax compliance, tax planning and tax advice. Tax compliance includes services for compliance related tax advice, as well as the preparation and review of both original and amended tax returns for the Company and its consolidated subsidiaries. Tax compliance related fees represented $0.1 million of the tax fees for fiscal 2023 and $0.1 million of the tax fees for fiscal 2022. The remaining tax fees primarily include tax advice. (4)Comprises other miscellaneous services. |
In accordance with the Sarbanes-Oxley Act of 2002, the Audit & Finance Committee established policies and procedures under which all audit and non-audit services performed by the Company's independent registered public accounting firm must be approved in advance by the Audit & Finance Committee. During fiscal 2023 and fiscal 2022, all such services performed by, and fees paid to, PwC were approved in advance. |
BOARD RECOMMENDATION |
| The Board of Directors recommends that shareholders vote FOR ratification of the appointment of PricewaterhouseCoopers LLP as the Company's independent registered public accounting firm for the fiscal year ending May 31, 2024. |
| | | | | |
REPORT OF THE AUDIT & FINANCE COMMITTEE
The Audit & Finance Committee has:
•Reviewed and discussed the audited financial statements with management.
•Discussed with the independent auditors the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board ("PCAOB") and the SEC.
•Received the written disclosures and the letter from the independent accountants required by applicable requirements of the PCAOB regarding the independent accountants' communications concerning independence, and has discussed with the independent accountant the independent accountant's independence.
•Based on the review and discussions above, recommended to the Board of Directors that the audited financial statements be included in the Company's Annual Report on Form 10-K for the last fiscal year for filing with the Securities and Exchange Commission.
Members of the Audit & Finance Committee:
•Alan Graf, Jr., Chair
•Maria Henry
•Peter Henry
•Robert Swan
SHAREHOLDER PROPOSALS
| | | | | |
| |
PROPOSAL 5 TO CONSIDER A SHAREHOLDER PROPOSAL REGARDING POLITICAL CONTRIBUTIONSSUPPLEMENTAL PAY EQUITY DISCLOSURE |
The following shareholder proposal (the "Proposal") will be voted on at the Annual Meeting only if properly presented by or on behalf of the shareholder proponent. Mercy A. Rome,Mary McInnes, c/o Newground Social Investment, 111 Queen Anne Ave N, Suite 500, Seattle, WA 98109,Arjuna Capital, 13 Elm Street, Manchester, MA 01944, a beneficial owner of at least $25,000 of Class B Stock, submitted the Proposal together with co-filer Change Finance, P.B.C. The Board of Directors recommends a vote AGAINST the proposal and asks shareholders to read through NIKE's response which follows the shareholder proposal.
|
Racial and Gender Pay Gaps
Whereas: Pay inequities persist across race and gender and pose substantial risk to companies and society at large. Black workers’ hourly median earnings represent 81 percent of white wages. The median income for women working full time is 83 percent that of men. Intersecting race, Black women earn 64 cents, Native women 51 cents, and Latina women 54 cents. At the current rate, women will not reach pay equity until 2059, Black women until 2130, and Latina women until 2224.
Citigroup estimates closing minority and gender wage gaps 20 years ago could have generated 12 trillion dollars in additional income. PwC estimates closing the gender pay gap could boost Organization for Economic Cooperation and Development countries’ economies by 2 trillion dollars annually.
Actively managing pay equity is associated with improved representation, and diversity is linked to superior stock performance and return on equity. Minorities represent 60 percent of Nike's workforce, but only 30 percent of leadership. Women represent 49 percent of Nike's workforce and 43 percent of leadership.
Best practice pay equity reporting consists of two parts:
1. unadjusted median pay gaps, assessing equal opportunity to high paying roles, 2. statistically adjusted gaps, assessing pay between minorities and non-minorities, men and women, performing similar roles.
Nike reports only statistically adjusted gaps but ignores unadjusted gaps, which address structural bias women and minorities face regarding job opportunity and pay, particularly when men hold most higher paying jobs. Median pay gaps show, quite literally, how Nike assigns value to employees through the roles they inhabit and pay they receive. Median gap reporting also provides a digestible and comparable data point to determine progress over time.
Racial and gender median pay gaps are accepted as the valid way of measuring pay inequity by the United States Census Bureau, Department of Labor, Organization for Economic Cooperation and Development, and International Labor Organization. The United Kingdom and Ireland mandate disclosure of median gender pay gaps. Nike discloses data for United Kingdom employees, reporting a median hourly gender pay gap of 7 percent and median bonus gap of 33 sharespercent.
Resolved: Shareholders request Nike report on median pay gaps across race and gender, including associated policy, reputational, competitive, and operational risks, and risks related to recruiting and retaining diverse talent. The report should be prepared at reasonable cost, omitting proprietary information, litigation strategy and legal compliance information.
Racial/gender pay gaps are defined as the difference between non-minority and minority/male and female median earnings expressed as a percentage of non-minority/male earnings (Wikipedia/OECD, respectively).
Supporting Statement: An annual report adequate for investors to assess performance could, with board discretion, integrate base, bonus and equity compensation to calculate: •percentage median gender pay gap, globally and/or by country, where appropriate •percentage median racial/minority/ethnicity pay gap, US and/or by country, where appropriate
|
| | | | | |
OPPOSITION STATEMENT The Board of Directors recommends that shareholders vote AGAINST this proposal because: •We remain committed to the principle of equal pay for equal work and to enhancing the representation of diverse individuals at all levels of the Company; and •Our current initiatives and public disclosures, including the pay equity data published in our annual Impact Report, already address the underlying rationale for the proposal and provide our shareholders with more relevant information about NIKE's commitment to pay equity and increasing diversity, equity, and inclusion ("DE&I") at all levels of the Company than the requested measure.
We remain committed to maintaining pay equity, increasing diversity at all levels of the Company, and providing transparency. As demonstrated by the 2025 People targets set forth in NIKE's annual Impact Report, NIKE is committed to fostering a diverse, equitable, and inclusive culture by focusing on representation, education, development, and community. We believe that diversity is a key component of innovation and strive to build a creative and inclusive environment, where all voices are welcomed and heard.
Our pay equity ratio, which is disclosed annually in our Impact Report, reflects our commitment to deliver equal pay for equal work. NIKE defines pay equity as equal compensation for employees across gender, race, and ethnicity, who undertake the same work at the same career level, location, experience, and performance. We have achieved and maintained a global pay equity ratio of 1:1 for men to women and a 1:1 pay equity ratio for white employees to racial and ethnic minorities in the United States. We regularly monitor internal pay infrastructure and annually review our compensation and promotion practices across all geographies, functions, and business units with the goal of ensuring we continue to achieve pay equity every year. During fiscal 2022, we also enhanced our commitment to educate employees on talent and pay practices by expanding our resources and hosting live training sessions with the goal of strengthening manager capability and confidence in having productive pay conversations.
In addition to our commitment to maintaining pay equity, we are also focused on increasing gender and racial diversity throughout the Company, including among our leadership ranks. In our annual Impact Report we disclose the actual percentage representation of women globally and racial and ethnic minorities in the United States and its trend over time to enable our shareholders to track the progress that we have made in advancing diversity in our workforce generally as well as specifically in senior leadership roles.
We have also committed to specific 2025 targets related to pay equity as well as DE&I at the Company. For example, we have adopted specific representation-related targets, including achieving 50% representation of women in the global corporate workforce, 45% representation of women globally at the VP level, 35% representation of racial and ethnic minorities in our U.S. workforce, and 30% representation of racial and ethnic minorities at the Director level and above in the United States. We have already achieved many of these targets. As of fiscal 2022, women make up 51% of our global corporate workforce and racial and ethnic minorities make up 39% of our workforce in the United States and we have increased VP-level representation for women globally to 44% (a 17 percentage point increase from 2015) and for racial and ethnic minorities in the United States to 35% (a 19 percentage point increase from 2015). NIKE also discloses its Federal Employer Information Report EEO-1 Data, although we do not use the EEO-1 Data to measure progress or believe it is appropriate to do so. The EEO-1 Data for 2021 is available on the Company’s website. And at the Board level, NIKE has adopted a set of qualification standards for director nominees, which includes, among other things, diversity and inclusion as a factor.
We maintain robust policies and programs to advance our diversity, equity, and inclusion goals throughout the Company by ensuring a diverse breadth of talent in our pipeline and developing and supporting our female and U.S. racial and ethnic minority employees. Although we have made good progress with respect to DE&I, we know there is more work to be done. We have continued to expand our programming to recruit, develop, promote, and retain diverse employees. We have scaled up our efforts to recruit the best and the brightest talent through traditional executive and campus recruiting channels and by expanding and deepening our relationships with Historically Black Colleges and Universities ("HBCUs") and Hispanic-Serving Institutions ("HSIs"). We have also launched innovative programs, such as the Serena Design Crew, an eight-month apprenticeship program designed to bring diverse, talented individuals together to work on a Serena inspired collection, and Women in Nike ("WIN"), a two-year program to provide relevant and dynamic work experience for retired or retiring WNBA players. |
| | | | | |
Specific highlights of our recent efforts to enhance the recruitment, development, and retention of diverse talent at all levels of the Company include: •Increasing our focus on diversity recruitment programs, including by expanding and deepening our relationships with HBCUs and HSIs through year-round engagement, workshops, and a commitment to a $10 million investment in HBCUs and HSIs by 2025. •Innovative programs aimed at building a pipeline of exceptional and diverse candidates, such as our Serena Design Crew apprenticeship for diverse and talented individuals and our WIN initiative for retired or retiring WNBA players. •Strategies to attract and select diverse candidates for our intern program through inclusive intern hiring and full-time employee conversion. •Eight employee-formed and managed networks that help build community for a diverse spectrum of individuals across the Company, such as the Black Employee Network and Friends, Latino & Friends Network, Native American Network & Friends, PRIDE Network and Women of Nike & Friends. •A new Inclusive Leadership education certification within our ongoing VP leadership program for all NIKE executives across the globe. •A custom unconscious bias awareness training was developed and rolled out to all employees in fiscal 2023. •Our Board’s ongoing oversight of the Company’s DE&I policies as well as the Corporate Responsibility, Sustainability & Governance Committee's regular review and evaluation of significant DE&I strategies, activities, policies, investments, and programs. •Benefits that are responsive to our employees’ diverse needs, including transgender healthcare coverage and fertility, adoption, and surrogacy benefits.
At NIKE, DE&I is integrated into the entire Talent agenda from the very beginning of the employee experience, with measurement and leadership accountability throughout each employee's career. Finally, NIKE supports our recruitment, development, promotion, and retention efforts through investments in DE&I education for all employees, to ensure that our people have the awareness and understanding necessary to build and retain diverse and inclusive teams; to empower and enable employees to grow their careers at NIKE through professional development programs and experiences; and to ensure an ecosystem of belonging and access for our internal communities through our eight employee networks.
Our long-standing commitment to and support of gender and racial equality has been affirmed by many organizations. For example, NIKE has earned the title of Best Place to Work for LGBTQ+ employees for the 20th year in a row, with a perfect score on the 2022 Corporate Equality Index, and Forbes named NIKE as one of the Best Employers for Diversity in 2023.
More information about our key initiatives and diversity metrics is available in the Diversity, Equity & Inclusion section of our website and in our FY22 NIKE, Inc. Impact Report, both of which are available through the Impact section of our website.
As described above, we continue to provide information about our pay infrastructure, pay equity, and the representation of women and racial and ethnic minority employees in senior leadership positions on our website and in our annual Impact Report. We believe that a commitment to transparency helps to build trust with our shareholders and internal and external stakeholders and holds us accountable to our commitments, which is why we continue to provide such information to our shareholders.
In contrast, the median pay gap measure seeks to compare the pay of two employees whose compensation happens to fall at the midpoint of the pay range among those employees sharing the relevant gender, racial, or ethnic characteristic, without adjusting for relevant factors that can explain differences in pay, such as their different role, skills, performance, experience, tenure, or location. Although the proposal is aimed at providing transparency with respect to pay equity and equal opportunity, this statistic does not demonstrate whether our women and racial and ethnic minority employees are being paid fairly for the roles that they are doing nor does it accurately depict female or racial and ethnic representation at NIKE’s different locations around the globe.
Our shareholders would not benefit from a surrogate measurement of pay equity that ultimately does not provide any meaningful supplemental information to our existing disclosures. Our shareholders seem to agree since a similar proposal received from the proponent in 2021 received the support of only approximately 18% of votes cast.
In summary, the Board of Directors believes the proposal is unnecessary because NIKE already publicly discloses information with respect to our DE&I initiatives, pay equity, and diversity metrics and provides our shareholders with meaningful insight into our progress in this area that more effectively responds to the underlying objective of the proposal than the unadjusted median pay gap disclosure requested by the proposal would.
|
BOARD RECOMMENDATION |
X | The Board of Directors recommends that shareholders vote AGAINST the shareholder proposal. |
| | | | | |
| |
PROPOSAL 6 TO CONSIDER A SHAREHOLDER PROPOSAL REGARDING A SUPPLY CHAIN MANAGEMENT REPORT |
The following shareholder proposal will be voted on at the Annual Meeting only if properly presented by or on behalf of the shareholder proponent. Tulipshare Ltd., 64 Nile Street, International House, London, England, N1 7SR UK, a beneficial owner of at least $25,000 of Class B Stock, submitted the Proposal. The Board of Directors recommends a vote AGAINST the Proposalproposal and asks shareholders to read through NIKE’sNIKE's response which follows the shareholder proposal.
|
RESOLVED: That the shareholders Shareholders of NIKE,Nike, Inc. ("NIKE" or "Company"Nike") hereby request that the Company provideBoard oversee and issue a report updated semiannually, disclosingto shareholders, at reasonable cost and omitting proprietary information, assessing the Company’s:effectiveness of its existing supply chain management infrastructure in ensuring alignment with Nike's equity goals and human rights commitments.
1. PoliciesSUPPORTING STATEMENT: In the Board’s discretion we recommend Nike's report include:
•Assessment of whether existing policies and proceduresimplementation mechanisms, such as codes, guidance and supply chain contract terms ensure alignment throughout the value chain; •Methodology and metrics to track and measure performance on forced labor and wage theft risks; •Consistency with OECD Guidelines, UN Guiding Principles, and Sustainable Development Goals; •Consideration of American Bar Association (ABA) Model Contract Clauses on human rights in the supply chain; and •Whether the assessment yields any changes to Company policies, decision making, and implementation mechanisms.
WHEREAS: In the apparel industry, forced labor occurs both in the production of raw materials and during manufacturing, especially at lower tier suppliers. An estimated 27.6 million people are trapped in forced labor, with annual increases in forced labor driven entirely by the private economy.1 UN Guiding Principles require corporate responsibility to respect human rights within operations and supply chains. Shareholders agree Nike should expand "opportunity for making,women"2 considering a majority of Nike's garment workers are women3 and the exacerbated human rights violations during the pandemic.4
Nike's impact report includes continued support for the UN Global Compact.5 However, Nike's communication on progress only meets six of seventeen Sustainable Development Goals.6 Nike has not disclosed adequate analysis regarding the efficacy of traceability steps taken to address the risks of alleged Uyghur forced labor across its supply chain tiers, nor does Nike disclose engagement with affected rightsholders or whether remedies are satisfactory to victims; KnowTheChain identified Nike policies in need of improvement: purchasing practices, worker voice, and remedy.7
In 2022, the EU adopted a Directive on corporate fundssustainability due diligence in global value chains, requiring companies like Nike to identify, prevent, end or assets, contributionsmitigate adverse impacts on human rights.8 This Directive sets obligations, penalties and expenditures (direct or indirect) to: (a) participate or intervene in any campaign on behalf of (or in opposition to) any candidateliability for public office, or: (b) influence the general public, or any segment thereof,large companies, with respect to their own operations, subsidiaries, and business partners.9
In 2023, garment-worker unions and labor-rights groups filed a complaint alleging Nike's treatment of workers and unpaid wages violated OECD guidelines.10 Nike allegedly owes an electionestimated $1.4 million in unpaid wages to Cambodian garment workers,11 with Nike's overall wage theft from workers alleged at $28 million.12
One possible approach for Nike to fulfil its responsibility to avoid causing or referendum.
2. Monetary and non-monetary contributions and expenditures (direct and indirect) usedcontributing to adverse human rights impacts in the manner described in section 1 above, including:
a. The identityits supply chain is deployment of the recipient as well as the amount paid to each; and
b.ABA's Model Contract Clauses. The title(s) of the person(s) in the Companycontract clauses are aimed at ensuring responsible for decision-making.
The report shall be presented to the board of directors or relevant board committee and posted on the Company's website within 12 months from the date of the annual meeting. This proposal does not encompass lobbying spending.
|
SUPPORTING STATEMENT
As long-term shareholders of NIKE, we support transparency and accountability in corporate electoral spending. This includes any activity considered intervention in a political campaign under the Internal Revenue Code,purchasing practices, such as directreasonable assistance to suppliers, responsible exit, and indirect contributions to political candidates, parties, or organizations, and independent expenditures or electioneering communications on behalf of federal, state, or local candidates.victim remedies.13
Disclosure is in the best interest of the company and its shareholders. The Supreme Court recognized this in its 2010 Citizens United decision, which said, "[D]isclosure permits citizens and shareholders to react to the speech of corporate entities in a proper way. This transparency enables the electorate to make informed decisions and give proper weight to different speakers and messages."1 https://www.ilo.org/wcmsp5/groups/public/---ed_norm/---ipec/documents/publication/wcms_854733.pdf
2 https://about.nike.com/en/newsroom/statements/a-letter-from-our-president-and-ceo
Publicly available records show NIKE has contributed at least $2.1 million in corporate funds since the 2010 election cycle (CQMoneyLine: http:3 https://moneyline.cq.com; National Institute on Money in State Politics: http:manufacturingmap.nikeinc.com/
4 https://www.followthemoney.org).www.payyourworkers.org/ramatex 5 https://purpose-cms-preprod01.s3.amazonaws.com/wp-content/uploads/2022/03/17210319/FY21_NIKE-Impact-Report.pdf
However, relying on publicly available data does not provide a complete picture the Company's electoral spending. For example, the Company's payments to trade associations and other tax-exempt groups that may be used for election-related activities are undisclosed and unknown. This proposal asks the Company to disclose all of its electoral spending, including payments to trade associations and other tax-exempt organizations, which may be used for electoral purposes. This would bring our Company in line with a growing number of leading companies, including The Coca-Cola Company, Microsoft Corporation, and Kellogg Company, which present this information on their websites.6 https://unglobalcompact.org/participation/report/cop/active/464879
7 https://knowthechain.org/company/nike_2021/#resources
The Company's Board and shareholders need comprehensive disclosure to fully evaluate the use of corporate assets in elections.8 https://ec.europa.eu/commission/presscorner/detail/en/ip_22_1145
9 https://www.consilium.europa.eu/en/press/press-releases/2022/12/01/council-adopts-position-on-due-diligence-rules-for-large-companies/
THEREFORE: Please vote FOR this critical governance reform.10 https://www.businessoffashion.com/articles/sustainability/worker-rights-nike-oecd-complaint-covid-19-pandemic-wage-theft/; https://globallaborjustice.org/wp-content/uploads/2023/02/OECD-Fact-Sheet-Nike.pdf
11 https://www.business-humanrights.org/en/latest-news/cambodia-trade-unions-demand-nike-matalan-pay-garment-workers-from-closed-factory-14-million-in-unpaid-compensation-damages/ 12 https://asia.floorwage.org/wp-content/uploads/2022/02/Money-Heist_Book_Final-compressed.pdf 13 https://www.americanbar.org/content/dam/aba/administrative/human_rights/contractual-clauses-project/mccs-full-report.pdf |
|
| | | | |
OPPOSITION STATEMENT
The Board of Directors recommends that shareholders vote AGAINST this Proposalproposal because: • Our current policies and public disclosures already address many of the items requested by the Proposal;•
In the Board’s judgment, more disclosure than we already provide would not beNIKE strongly believes in, the best interests of shareholders; and•
NIKE received virtually identical proposals for its Annual Meetings in 2012, 2013, 2015, 2016, 2017, and 2018 and the proposals were rejected by approximately 78%, 82%, 73%, 71%, 70%, and 73%, respectively, of shares voted.
Frankly, we agree with our shareholders.
NIKE is committed to respecting, human and labor rights throughout our operations and supply chain;
•NIKE's commitment to ethical practices in our own operations and our supply chain begins at the highest level; •NIKE expects, and supports the creation of, world-class, safe, and healthy workplaces for the people making our products; •NIKE continues to evolve and strengthen our expectations and practices; and •NIKE's policies effectively articulate our long-standing commitment to human rights and sustainable sourcing, rendering the proposal unnecessary.
NIKE strongly believes in, and is committed to respecting, human and labor rights throughout our operations and supply chain. NIKE is deeply committed to ethical standards when engagingand responsible manufacturing and to the goal that all people who make and move NIKE products are respected and valued. To inform our expectations of third-party manufacturers and suppliers, we look to the human rights defined in political activities. We have strong governance practices and accountability in corporate spending on political activities, and maintain a levelthe Universal Declaration of transparency that we believe allows shareholders to have the information they need to make informed decisions. This Proposal is unnecessary to achieve these objectivesHuman Rights and the proponent offers no new compelling evidence or arguments in supportInternational Labour Organization’s ("ILO") Declaration on Fundamental Rights at Work and consider the UN Guiding Principles on Business and Human Rights and the OECD Guidelines for Multinational Enterprises as best practices for understanding and managing human rights risks and impacts. Using these standards, we have developed a Supplier Code of the Proposal.
NIKE’s Political Contributions Policy (the "Policy"Conduct ("Supplier Code of Conduct") is designed to give shareholders confidence that there is proper oversight of political activity and to allow shareholders to assess any risks associated with significant contributions. All of our political contributions and expendituresCode Leadership Standards ("CLS"), which are made in accordance with the Policy and our objective is to strictly comply with all public reporting laws. Our Policy ensures that political contributions, trade group memberships, and policy statements are made in a manner consistent with NIKE's core values to protect or enhance shareholder value, without regard to the private political preferences of our corporate officers. Our Policy describes the policies and procedures for making corporate political contributions, how they are approved, who must approve them, and how they are reported to the Board’s Corporate Responsibility, Sustainability & Governance Committee. Our Policy ispublicly available on our website at http://investors.nike.com/investors/corporate-governance.and translated into 15 languages, and which set strong expectations for the contract manufacturers that manufacture our finished products ("suppliers"), as well as procedures for measuring compliance with such expectations. The Supplier Code of Conduct lays out minimum standards NIKE expects each supplier to meet in producing NIKE products and includes strict requirements regarding forced and child labor, excessive overtime, compensation, and freedom of association, among other requirements. The CLS articulates how NIKE measures suppliers' compliance efforts and progress against our Supplier Code of Conduct, including specific requirements on the management of key forced labor risks. NIKE also explicitly requires our suppliers to comply with all local and country-specific labor laws as well as the CLS and our Supplier Code of Conduct. NIKE has progressively raised expectations for our suppliers through evolving the standards within the Supplier Code of Conduct and CLS. Recent updates include broadening the definitions of employment fees to be borne by suppliers and strengthening the oversight requirements for labor agents recruiting and hiring foreign migrant workers.
ConsistentWe monitor compliance with our Policy, we also annually disclose on our website all direct political contributionsthe Supplier Code of Conduct and CLS through regular internal and external third-party audits, both announced and unannounced, to any candidate, political party, or ballot initiative in any year that exceed $100,000,track the environmental and all political contributions in any U.S. state where we make more than 50%social performance of our political contributions in any year. We believe these disclosures provide shareholders meaningful informationcontract manufacturers against those expectations. In the event of alleged noncompliance, we investigate and, if improvements are required, we take a collaborative approach to assess any risks posedworking with suppliers to verify corrective actions are taken, problems are remediated, and managers have onsite verification. Should a supplier fail to remediate issues identified by significant political contributions. Our disclosures are simple, accurate,an audit, it is subject to review and clearsanctions, including potential termination of the supplier relationship.
NIKE works to elevate human potential through our products, third party relationships, and operations, something that cannot be accomplished without a fundamental respect for human rights throughout NIKE's operations. NIKE expects the same from our suppliers, and we have published them for every year since 2012.
Our Policyfocus on working with long-term, strategic suppliers that demonstrate a commitment to engaging their workers, providing safe working conditions, and advancing environmental responsibility. This includes working to combat risks of forced labor. NIKE discloses all of the independent contract manufacturers and the majority of material vendors used to manufacture NIKE products in an interactive and publicly available NIKE Manufacturing Map. NIKE also requires our suppliers to source materials from vendors that management annually report on complianceare compliant with NIKE's Supplier Code of Conduct, Traceability Standards, and Restricted Substances List.
NIKE's commitment to ethical practices in our Policy toown operations and our supply chain begins at the Board’shighest level. The Board's Corporate Responsibility, Sustainability & Governance Committee reviews and reviewevaluates the strategic priorities for political contributionsCompany's significant strategies, activities, policies, investments, and trade association affiliations,programs regarding corporate purpose, including corporate responsibility, sustainability, human rights, and global community and social impact, and provides oversight of management’s efforts to ensure theythat the Company's dedication to sustainability (including environmental sustainability and human rights) is reflected in our business operations. NIKE's Responsible Supply Chain team manages the day-to-day human rights and environmental impacts and risks across the global supply chain, and drives appropriate strategies to fuel a transparent and responsible supply chain that enables NIKE's growth, builds resilience, and protects the future of sport.
NIKE works closely with suppliers, industry associations, brands, civil society, and other stakeholders to build world-class, safe, and healthy workplaces for the people making our products. NIKE believes that addressing complex and critical human rights risks, like forced labor, requires multi-stakeholder collaboration. We continually evaluate and update our systems to identify and address risks in the supply chain, including those related to forced labor. Where we identify potential adverse human rights impacts related to supply chain workers, we take steps to prevent and mitigate such impacts by leveraging our business relationships and collaborating with suppliers, stakeholders, and other brands.
NIKE is a founding signatory to the American Apparel and Footwear Association and Fair Labor Association’s Apparel & Footwear Industry Commitment to Responsible Recruitment. The principles of the Commitment, centered on addressing risks for forced labor, are aligned with NIKE's standards and the work we have been doing for more than a decade with the contract factories that manufacture our products. We believe this builds on the multi-sector focus to drive change in the dynamics of how workers are recruited, including for crossborder employment. NIKE is also a member of the Leadership Group for Responsible Recruitment, an initiative of the Institute for Human Rights and Business, and is a member of the Responsible Labor Initiative, an initiative of the Responsible Business Alliance, to further the Company’s work and goals on eliminating forced labor risks in our supply chain. Each organization helps NIKE to advance core aspects of our strategy. |
| | | | | |
A few of our fiscal 2022 highlights relating to our efforts to promote human and labor rights throughout our supply chain include: •Expanding our use of the CUMULUS Forced Labor ScreenTM (a due diligence tool to help identify risks related to the recruitment of foreign migrant workers by NIKE suppliers) to all Tier 1 finished goods and strategic Tier 2 suppliers hiring foreign migrant workers in our extended supply chain. •Collaborating with the Fair Labor Association and ILO's Better Work Programme to support the delivery of Better Work's trainings to workers at several suppliers in Jordan, focused on topics like mental well-being, sexual harassment prevention, and workplace communication. •Expanding our collaboration with the Issarra Institute by launching their Foreign Migrant Workers assessment survey in a factory in Thailand to assess gaps in the foreign migrant worker recruitment process, implementation of the Employer Pays Principle (prohibiting workers from paying fees for their employment), and working conditions.
NIKE continues to collaborate with industry experts, suppliers, industry associations, stakeholders, and other organizations to understand, evaluate and address matters related to forced labor. NIKE also continues to expand and evolve our work with other industry peers, NGOs, and organizations on issues of human rights in the countries where the Company and our suppliers operate.
NIKE continues to evolve and strengthen our expectations and practices. NIKE continues to refine our approach to supplier sustainability. We continue to adopt new strategies so our suppliers understand how to grow with NIKE's business in a sustainable and safe way. We develop five-year targets to enhance NIKE's sustainable sourcing practices, which are disclosed to shareholders in our annual Impact Report. Historically we have set an ambitious target of sourcing 100% from facilities that meet our foundational labor, health, safety, and environmental standards, focusing on finished goods manufacturing partners that we contract with directly. For our 2025 targets, we expanded the scope of this target to include key material suppliers (supplying approximately 90% of our footwear uppers and apparel materials) and focus distribution centers (representing at least 80% of volume), as well as NIKE owned or operated manufacturing facilities.
In addition, in fiscal year 2021, we updated our Supplier Code of Conduct to better reflect our priorities across labor, health and safety, and the environment, drive consistency across the NIKE supply chain and progress toward our 2025 targets. As part of these changes, we added a new requirement for suppliers to develop and share their own internal Code of Conduct. This supports suppliers in fully integrating our expectations into their own business practices and compliance policies. We also strengthened expectations on identifying and addressing forced labor and child labor by elevating key risks of forced labor beyond recruitment fees to include freedom of movement, debt bondage, and building sufficient systems to manage employment relationship of vulnerable worker groups like foreign workers. We clarified examples of hazardous work to align with the long-term business objectivesminimum working age and elevated requirements around nonretaliation or interference/intimidation to prevent right to freely associate.
As always, we plan to support our suppliers as we work together to meet our aggressive targets and implement the changes in our Supplier Code of the Company.
The additional disclosure requested in this Proposal could place NIKE at a competitive disadvantage by revealing strategiesConduct. We have transitioned to common industry assessments on environment, labor, and priorities designedhealth and safety to protect the economic future of NIKE, its employeesreduce duplication and its shareholders. Givenaudit fatigue for suppliers working with multiple brands, and to ensure that partieswe work with interests adverse to NIKE also participateothers in the political processindustry to drive impact with a unified voice. We have also enhanced supplier access to training and capacity building to
improve management systems, adopt technical improvements in environmental, labor, and health and safety standards, and to sustain those improvements.
NIKE is committed to sharing with our stakeholders how we manage social and environmental issues and impacts. At NIKE, we set open goals and implement transparent policies to promote human and labor rights and the ethical production of our products, while sharing our progress and learnings along the way. Each year's annual Impact Report highlights our progress towards our five-year targets and describes the work undertaken to support that progress. The Responsible Sourcing page of our website goes into further detail and includes our Supplier Code of Conduct and our CLS, which, as described above, specifies how contract manufacturers should implement the Supplier Code of Conduct and articulates how we measure supplier compliance efforts and progress against our Supplier Code of Conduct, including specific requirements on the management of key forced labor risks.
Finally, we have published our Statement on Forced Labor, Human Trafficking and Modern Slavery for Fiscal Year 2022 on our website. The statement describes NIKE's commitment to ethical and responsible manufacturing, our ongoing supplier diligence and monitoring to identify and assess potential forced labor risks, how we engage with suppliers to prioritize the well-being of their business advantage, any unilateral expanded disclosure could benefit them, while harming the interests of NIKEworkers, and its shareholders.our partnerships with various organizations to drive collaborative efforts to address critical human rights risks, such as forced labor.
In summary, NIKE continues to work tirelessly to integrate respect for people and the planet throughout NIKE's entire business, including our supply chain, and to disclose our initiatives and policies so our shareholders have meaningful insight into our progress in this area. We believe that our decades of commitment to these issues have led to effective and impactful solutions. The Board of Directors believes that the Proposal is unnecessary because NIKE has followed a comprehensive policyCompany's policies effectively articulate our long-standing support for, oversight and disclosure of political contributions for many years. If adopted,continued commitment to, human rights and sustainable sourcing, rendering the Proposal would cause NIKE to incur undue costproposal ineffective and administrative burden, as well as competitive harm, without commensurate benefit to our shareholders. Our shareholders have understandably rejected this Proposal six times before.
unnecessary.
|
BOARD RECOMMENDATION |
X | The Board of Directors recommends that shareholders vote AGAINST the shareholder proposal. |
STOCK OWNERSHIP INFORMATION
STOCK HOLDINGS OF CERTAIN OWNERS AND MANAGEMENT
The following table sets forth the number of shares of the classes of NIKE securities beneficially owned, as of June 30, 2020,2023, after giving effect to any transactions that occurred on such date, by (i)(1) each person known to the Company to be the beneficial owner of more than 5five percent of any class of the Company’sCompany's securities, (ii)(2) each of the directors and nominees for director, (iii)(3) each executive officer listed in the Summary Compensation Table ("Named Executive Officers"), and (iv)(4) all directors, Named Executive Officers, and other executive officers as a group. Because Class A Stock is convertible into Class B Stock on a share-for-share basis, each beneficial owner of Class A Stock is deemed by the SEC to be a beneficial owner of the same number of shares of Class B Stock. Therefore, in indicating a person’sperson's beneficial ownership of shares of Class B Stock in the table, it has been assumed that such person has converted into Class B Stock all shares of Class A Stock of which such person is a beneficial owner. For these reasons the table contains substantial duplications in the numbers of shares and percentages of Class A and Class B Stock shown for Swoosh, LLC, Philip H. Knight, and the Travis A. Knight 2009 Irrevocable Trust II, and Travis A. Knight in his capacity as the Trustee of such Trust.II. In addition, unless otherwise indicated, all persons named below can be reached c/o Ann M. Miller, Vice President, Corporate Secretary, and Chief Ethics & Compliance Officer, NIKE, Inc., One Bowerman Drive, Beaverton, Oregon 97005-6453.
|
| | | | | |
| TITLE OF CLASS | SHARES BENEFICIALLY OWNED(1) | | PERCENT OF CLASS(2) |
|
Cathleen A. Benko | Class B | 6,308 | | — |
|
Elizabeth J. Comstock | Class B | 58,809 | (3) | — |
|
John G. Connors | Class B | 110,890 | (3) | — |
|
Timothy D. Cook | Class B | 95,809 | (3) | — |
|
John J. Donahoe II(5) | Class B | 21,041 | | — |
|
Thasunda B. Duckett | Class B | 1,918 | | — |
|
Alan B. Graf, Jr. | Class B | 190,801 | | — |
|
Peter B. Henry | Class B | 4,046 | | — |
|
Travis A. Knight | Class A | 40,756,369 | (4) | 12.9 | % |
| Class B | 40,778,638 | (4) | 3.2 | % |
Mark G. Parker(5) | Class B | 4,437,366 | (3)(6) | 0.4 | % |
Michelle A. Peluso | Class B | 21,143 | | — |
|
John W. Rogers, Jr. | Class B | 12,851 | | — |
|
John R. Thompson, Jr. | Class B | 82,693 | (7) | — |
|
Andrew Campion(5) | Class B | 517,251 | (3) | — |
|
Matthew Friend(5) | Class B | 196,033 | (3) | — |
|
Hilary K. Krane(5) | Class B | 596,172 | (3)(6) | — |
|
Monique Matheson(5) | Class B | 273,039 | (3)(6) | — |
|
John F. Slusher(5) | Class B | 595,335 | (3)(6) | — |
|
Elliott J. Hill(5) | Class B | 355,838 | (3) | — |
|
Eric D. Sprunk(5) | Class B | 517,664 | (3) | — |
|
| | | | | | | | | | | | | | | | | | | | |
| TITLE OF CLASS | | SHARES BENEFICIALLY OWNED(1) | | PERCENT OF CLASS(2) | |
Cathleen Benko | Class B | | 10,942 | | — | | |
Timothy Cook | Class B | | 48,443 | (3) | — | | |
John Donahoe II(4) | Class B | | 1,435,975 | (3)(5) | 0.1 | % | |
Thasunda Duckett | Class B | | 6,552 | | — | | |
Mónica Gil | Class B | | 1,856 | | — | | |
Alan Graf, Jr. | Class B | | 195,435 | | — | | |
Maria Henry | Class B | | 1,730 | | — | | |
Peter Henry | Class B | | 4,062 | | — | | |
Travis Knight | Class B | | 26,903 | (6) | — | | |
Mark Parker(4) | Class B | | 3,212,383 | (3)(5) | 0.3 | % | |
Michelle Peluso | Class B | | 25,777 | | — | | |
John Rogers, Jr. | Class B | | 27,485 | | — | | |
Robert Swan | Class B | | 4,532 | (7) | — | | |
Andrew Campion(4) | Class B | | 433,658 | (3) | — | | |
Matthew Friend(4) | Class B | | 238,202 | (3) | — | | |
Heidi O'Neill(4) | Class B | | 246,456 | (3) | — | | |
64 NIKE, INC.2023 PROXY STATEMENT 66
|
| | | | | | | |
| | TITLE OF CLASS | | SHARES BENEFICIALLY OWNED(1) | | PERCENT OF CLASS(2) |
|
| Sojitz Corporation of America | Preferred | (8) | 300,000 | | 100.0 | % |
| 1211 S.W. 5th Ave, Pacwest Center, Ste. 2220, Portland, OR 97204 | | | | | |
| Philip H. Knight One Bowerman Drive, Beaverton, OR 97005 | Class A | | 29,154,487 | (9) | 9.3 | % |
| Class B | | 40,540,174 | (10) | 3.2 | % |
| Swoosh, LLC 22990 NW Bennett Street, Hillsboro, OR 97124 | Class A | | 236,000,000 | (11) | 74.9 | % |
| Class B | | 236,000,000 | | 15.9 | % |
| Travis A. Knight 2009 Irrevocable Trust II 22990 NW Bennett Street, Hillsboro, OR 97124 | Class A | | 40,756,369 | (4) | 12.9 | % |
| Class B | | 40,756,369 | (4) | 3.2 | % |
| The Vanguard Group 100 Vanguard Blvd., Malvern, PA 19355 | Class B | | 106,539,047 | (12) | 8.6 | % |
|
| BlackRock, Inc. 55 East 52nd Street, New York, NY 10055 | Class B | | 89,487,665 | (13) | 7.2 | % |
|
| All directors and executive officers as a group (17 persons) | Class A | | 40,756,369 | (4) | 12.9 | % |
| Class B | | 47,520,773 | (3)(4) | 3.8 | % |
| |
(1) | A person is considered to beneficially own any shares: (a) over which the person exercises sole or shared voting or investment power, or (b) of which the person has the right to acquire beneficial ownership at any time within 60 days (such as through conversion of securities or exercise of stock options). Unless otherwise indicated, voting and investment power relating to the above shares is exercised solely by the beneficial owner or shared by the owner and the owner’s spouse or children. |
| |
(2) | Omitted if less than 0.1 percent. |
| |
(3) | These amounts include the right to acquire the following numbers of shares within 60 days after June 30, 2020 pursuant to the exercise of stock options: 42,000 shares for Ms. Comstock, 66,000 shares for Mr. Connors, 66,000 shares for Mr. Cook, 2,560,000 shares for Mr. Parker, 313,750 shares for Mr. Campion, 159,700 shares for Mr. Friend, 386,000 shares for Ms. Krane, 173,750 shares for Ms. Matheson, 337,500 shares for Mr. Slusher, 175,000 shares for Mr. Hill, 288,750 shares for Mr. Sprunk, and 3,915,200 shares for the executive officer and director group. |
| |
(4) | Includes 21,613,989 shares of Class A Stock held directly by the Travis A. Knight 2009 Irrevocable Trust II (the "Trust"), of which Mr. Travis Knight is the Trustee, and 19,142,380 shares of Class A Stock held by an indirect subsidiary of the Trust. Mr. Travis Knight and members of his immediate family are among the beneficiaries of the Trust. Mr. Travis Knight disclaims beneficial ownership of the Company’s securities held directly and indirectly by the Trust, except to the extent of his pecuniary interest therein. On June 30, 2016, a wholly owned subsidiary of the Trust acquired all of the voting units in Swoosh, LLC. Mr. Travis Knight disclaims beneficial ownership of all securities held by Swoosh, LLC. |
| |
(5) | Named Executive Officer listed in the Summary Compensation Table. |
| |
(6) | Includes shares held in accounts under the NIKE, Inc. 401(k) Savings and Profit Sharing Plan: 36,390 shares for Mr. Parker, 119 shares for Ms. Krane, 11,521 shares for Ms. Matheson, and 2,805 shares for Mr. Slusher. |
| |
(7) | Includes 33,884 shares credited to Mr. Thompson’s account under the NIKE, Inc. Deferred Compensation Plan. |
| |
(8) | Preferred Stock does not have general voting rights except as provided by law, and under certain circumstances as provided in the Company’s Restated Articles of Incorporation, as amended. |
| |
(9) | Does not include 521,792 shares of Class A Stock that are owned by Mr. Philip Knight’s spouse. Mr. Philip Knight has disclaimed ownership of all such shares. Mr. Philip Knight holds the position Chairman Emeritus, and has a standing invitation to attend all meetings of the Board as a non-voting observer. |
| |
(10) | Does not include: (a) 521,792 shares of Class A Stock that are owned by Mr. Philip Knight’s spouse, and (b) 22,336,056 shares of Class B Stock held by the Knight Foundation, a charitable foundation in which Mr. Philip Knight and his spouse are directors. Mr. Philip Knight has disclaimed ownership of all such shares. |
| |
(11) | Information provided as of October 29, 2019 in the Form 4 filed by the shareholder. |
| |
(12) | Information provided as of February 12, 2020 in Schedule 13G filed by the shareholder. |
| |
(13) | Information provided as of February 5, 2020 in Schedule 13G filed by the shareholder. |
| | | | | | | | | | | | | | | | | | | | |
| TITLE OF CLASS | | SHARES BENEFICIALLY OWNED(1) | | PERCENT OF CLASS(2) | |
Sojitz Corporation of America | Preferred | (8) | 300,000 | | 100.0 | % | |
1211 S.W. 5th Ave, Pacwest Center, Ste. 2220, Portland, OR 97204 | | | | | |
Philip Knight One Bowerman Drive, Beaverton, OR 97005 | Class A | | 21,404,487 | (9) | 7.0 | % | |
Class B | | 29,740,174 | (10) | 2.4 | % | |
Swoosh, LLC 22990 NW Bennett Street, Hillsboro, OR 97124 | Class A | | 233,500,000 | (11) | 76.6 | % | |
Class B | | 233,500,000 | | 16.0 | % | |
Travis A. Knight 2009 Irrevocable Trust II 22990 NW Bennett Street, Hillsboro, OR 97124 | Class A | | 41,006,369 | (12) | 13.5 | % | |
Class B | | 41,006,369 | (12) | 3.2 | % | |
The Vanguard Group 100 Vanguard Blvd., Malvern, PA 19355 | Class B | | 109,698,806 | (13) | 8.7 | % | (12) |
|
BlackRock, Inc. 55 East 52nd Street, New York, NY 10055 | Class B | | 85,497,266 | (14) | 6.8 | % | (13) |
|
All directors and executive officers as a group (18 persons) | Class B | | 6,022,698 | (3)(5) | 0.5 | % | |
(1)A person is considered to beneficially own any shares: (a) over which the person exercises sole or shared voting or investment power, or (b) of which the person has the right to acquire beneficial ownership at any time within 60 days (such as through conversion of securities or exercise of stock options). Unless otherwise indicated, voting and investment power relating to the above shares is exercised solely by the beneficial owner or shared by the owner and the owner's spouse or children.
(2)Omitted if less than 0.1 percent.
(3)These amounts include the right to acquire the following numbers of shares within 60 days after June 30, 2023 pursuant to the exercise of stock options: 14,000 shares for Mr. Cook, 1,257,670 shares for Mr. Donahoe, 1,819,077 shares for Mr. Parker, 419,827 shares for Mr. Campion, 222,625 shares for Mr. Friend, 188,529 shares for Ms. O'Neill, and 3,954,301 shares for the executive officer and director group.
(4)Named Executive Officer listed in the Summary Compensation Table.
(5)Includes shares held in accounts under the NIKE, Inc. 401(k) Savings and Profit Sharing Plan: 146 shares for Mr. Donahoe, 37,435 shares for Mr. Parker, and 52,219 shares for the executive officer and director group.
(6)Does not include 233,500,000 shares of Class A Stock that are owned by Swoosh, LLC. Mr. Travis Knight has disclaimed beneficial ownership of all such shares.
(7)Includes 1,580 shares held by the Swan Family Revocable Trust.
(8)Preferred Stock does not have general voting rights except as provided by law, and under certain circumstances as provided in the Company's Restated Articles of Incorporation, as amended.
(9)Does not include 521,792 shares of Class A Stock that are owned by Mr. Philip Knight's spouse. Mr. Philip Knight has disclaimed ownership of all such shares. Mr. Philip Knight holds the position Chairman Emeritus, and has a standing invitation to attend all meetings of the Board as a non-voting observer.
(10)Does not include 521,792 shares of Class A Stock that are owned by Mr. Philip Knight's spouse. Mr. Philip Knight has disclaimed ownership of all such shares.
(11)Information provided as of July 17, 2020 PROXY STATEMENT 65in the Form 4 filed by the shareholder.
(12)Includes 21,863,989 shares of Class A Stock held directly by the Travis A. Knight 2009 Irrevocable Trust II (the "Trust") and 19,142,380 shares of Class A Stock held by an indirect subsidiary of the Trust. Mr. Travis Knight and members of his immediate family are among the beneficiaries of the Trust. Mr. Travis Knight disclaims beneficial ownership of the Company's securities held directly and indirectly by the Trust, except to the extent of his pecuniary interest therein.
(13)Information provided as of December 30, 2022 in Schedule 13G filed by the shareholder. (14)Information provided as of December 31, 2022 in Schedule 13G filed by the shareholder.
DELINQUENT SECTION 16(a) REPORTS
Section 16(a) of the Exchange Act requires our directors and executive officers, and holders of more than 10 percent of a registered class of the Company's equity securities, to file with the SEC reports regarding their ownership and changes in ownership of Common Stock and other equity securities of the Company. Directors, officers, and greater than 10 percent shareholders are required by the regulations of the SEC to furnish the Company with copies of all Section 16(a) forms they file. Based solely on a review of such reports furnished to the Company and written representations that no other reports were required, during fiscal 2023, we believe that all such reports that were required to be filed under Section 16(a) were timely filed, except that an amended Form 3 was filed for Robert Swan on June 22, 2023 to report certain indirect holdings that were inadvertently omitted from his initial, timely Form 3.
ADDITIONAL INFORMATION
TRANSACTIONS WITH RELATED PERSONS
Philip H. Knight, the father of NIKE director Travis A. Knight, serves as Chairman Emeritus, which provides a standing invitation for Philip H. Knight to attend meetings of the Board and its committees as a non-voting observer. In fiscal 2020,2023, as Chairman Emeritus, Mr. Knight received an annual salary of $500,000, and medical and dental insurance coverage generally available to employees.
In connection with his retirementJohn Donahoe II and in recognition of his substantial service and unique insights and experience, the Company have entered into a consulting agreement with John R. Thompson, Jr., a member of the Company's Board in fiscal 2020. Pursuant to the terms of the agreement, effective June 1, 2020,time sharing agreements under which Mr. Thompson serves as Director Emeritus ofDonahoe reimburses the Company for limited personal use of Company aircraft, which is intended to increase his security, availability, and when and as required by the Board, provides consulting services and advice to the Board and other officers ofproductivity. In fiscal 2023, Mr. Donahoe reimbursed the Company asapproximately $395,000 under the Board may specify until such time as either party terminates the agreement by providing 30 days' written notice. As Director Emeritus, Mr. Thompson is eligible to attend meetings of the Board and certain committees as a non-voting observer. For his services and commitment, the Company will pay Mr. Thompson the same compensation and benefits he would have been eligible to receive for his service as a non-employee director as of June 1, 2020, which equals approximately $267,000, and reimburse him for reasonable expenses incurred in connection with his services.sharing agreements.
Eric Sprunk’s daughter, Nicole Sprunk,Mark Parker's son, Matthew Parker, was employed by the Company in fiscal 2023 in a non-executive role in fiscal 2020 as a Brand Director. During fiscal 2020,for which the Company paid Matthew Parker aggregate compensation to Nicole Sprunk of $330,113, comprised of salary, bonus, the value of stock granted, certain maternity leave benefits and matching contributions to the Company-sponsored retirement plan.approximately $135,000. The compensation and benefits received by Nicole SprunkMatthew Parker were consistent with compensation and benefits paid to other employees holding similar positions.
The Company’sCompany's written policy requires the Corporate Responsibility, Sustainability & Governance Committee to review any transaction or proposed transaction with a related person that would be required to be reported under Item 404(a) of Regulation S-K, and to determine whether to ratify or approve the transaction, with ratification or approval to occur only if the committee determines that the transaction is fair to the Company or that approval or ratification of the transaction is in the interest of the Company.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee of the Board of Directors during fiscal 20202023 were Timothy D. Cook, Cathleen A. Benko, and Mónica Gil, as well as Elizabeth J. Comstock.Comstock (who served on the committee until she retired from the Board effective September 9, 2022). The committee is composed solely of independent, non-employee directors. No member of the Compensation Committee has been an executive officer of the Company, and no member of the Compensation Committee had any relationships requiring disclosure by the Company under the SEC’sSEC's rules requiring disclosure of certain relationships and related-party transactions. None of the Company’sCompany's executive officers served as a director or member of a compensation committee (or other committee serving an equivalent function) of any other entity, the executive officers of which served as a director or member of the Compensation Committee of the Company during fiscal 2020.2023.
OTHER MATTERS AT THE MEETING
As of the time this proxy statement was printed, management was unaware of any proposals to be presented for consideration at the Annual Meeting other than those set forth herein, but if other matters do properly come before the Annual Meeting, the persons named in the proxy will vote the shares represented by such proxy according to their best judgment.
SHAREHOLDER PROPOSALSGENERAL INFORMATION
A proposalWhy am I receiving these proxy materials?
You are receiving the enclosed proxy materials in connection with the solicitation of proxies by the Board of NIKE for use at the Annual Meeting. As a shareholder for inclusionof record as of the close of business on July 12, 2023, which is the record date fixed by the Board, you are invited to attend the virtual Annual Meeting and are urged to vote your shares on the proposals described in this proxy statement.
How are the Company’sproxy materials being distributed?
This proxy statement is first being made available to shareholders on or about July 28, 2023. We are furnishing proxy materials to our shareholders primarily via the Internet, by mailing a Notice Regarding the Availability of Proxy Materials, or "Notice", instead
of mailing printed copies of those materials to each shareholder. The Notice directs shareholders to a website where they can access our proxy materials, including our proxy statement and formour annual report, and view instructions on how to vote online or by telephone. If you would prefer to receive a paper copy of our proxy materials, please follow the instructions included in the Notice. If you have previously elected to receive our proxy materials electronically, you will continue to receive access to these materials electronically unless you elect otherwise.
What is included in the proxy materials?
Our proxy materials include our Notice, our proxy statement, and our Annual Report on Form 10-K for the 2021 annual meetingyear ended May 31, 2023. Our Notice directs shareholders to a website where they can access our proxy materials.
Why is the Company holding a virtual Annual Meeting?
While we initially pivoted to a virtual format due to public health concerns, we are continuing to use this format because of the success of the last three virtual meetings; the advantages of the virtual format, including enhanced accessibility for our shareholders; and our ability to ensure that shareholders will be afforded the same rights and opportunities to participate in our virtual Annual Meeting as they would at an in-person meeting.
How can I attend and participate in the virtual Annual Meeting?
Holders of record of our Class A Stock and Class B Stock at the close of business on July 12, 2023 may attend the Annual Meeting, vote, and submit questions in advance of and during the meeting.
To attend, vote at, and submit questions during the Annual Meeting, visit www.virtualshareholdermeeting.com/NKE2023 and enter the 16-digit control number included in your Notice, voting instructions form, or proxy card.
Online access to the webcast will open approximately 15 minutes prior to the start of the Annual Meeting to allow time for you to log in and test the computer audio system.
How can I ask questions at the Annual Meeting?
We are committed to ensuring that shareholders will be afforded the same rights and opportunities to participate in our virtual Annual Meeting as they would at an in-person meeting. Shareholders of record at the close of business on July 12, 2023 may submit questions in advance of and during the Annual Meeting.
•To submit questions in advance of the Annual Meeting: Visit www.proxyvote.com and enter your 16-digit control number included in your Notice, voting instructions form, or proxy card. Questions submitted in advance must be submitted before 11:59 P.M. Eastern Time on September 11, 2023.
•To submit questions during the Annual Meeting: Visit www.virtualshareholdermeeting.com/NKE2023 and enter the 16-digit control number included in your Notice, voting instructions form, or proxy card.
What will I be voting on at the Annual Meeting?
You will be voting:
•To elect the 13 director nominees identified in this Proxy Statement. The holders of NIKE's Class A Stock will vote to elect nine of the director nominees identified in this Proxy Statement, and the holders of NIKE's Class B Stock will vote to elect the remaining four director nominees identified in this Proxy Statement;
•To approve executive compensation by an advisory vote;
•To hold an advisory vote on the frequency of advisory votes on executive compensation;
•To ratify the appointment of PwC as our independent registered public accounting firm;
•To consider a shareholder proposal regarding Supplemental Pay Equity Disclosure, if properly presented at the meeting;
•To consider a shareholder proposal regarding a Supply Chain Management Report, if properly presented at the meeting; and
•To transact such other business as may properly come before our Annual Meeting.
How does the Board recommend that I vote on these proposals?
Our Board recommends:
•For the holders of NIKE's Class A Stock, a vote FOR the election of each of Mr. Timothy Cook, Mr. John Donahoe II, Ms. Thasunda Duckett, Ms. Mónica Gil, Ms. Maria Henry, Mr. Peter Henry, Mr. Travis Knight, Mr. Mark Parker, and Ms. Michelle Peluso to serve as directors until the next annual meeting;
•For the holders of NIKE's Class B Stock, a vote FOR the election of each of Ms. Cathleen Benko, Mr. Alan Graf, Jr., Mr. John Rogers, Jr., and Mr. Robert Swan, to serve as directors until the next annual meeting;
•For all shareholders, a vote FOR the advisory resolution approving the compensation of our Named Executive Officers as described in this proxy statement;
•For all shareholders, a vote for 1 YEAR regarding the frequency of advisory votes on executive compensation;
•For all shareholders, a vote FOR ratification of the appointment of PwC as our independent registered public accounting firm;
•For all shareholders, a vote AGAINST the shareholder proposal regarding Supplemental Pay Equity Disclosure; and
•For all shareholders, a vote AGAINST the shareholder proposal regarding a Supply Chain Management Report.
How do I vote my shares?
You may vote by proxy or at the Annual Meeting. If you received a printed copy of the proxy materials by Ann M. Miller, Vice President,mail, you may vote your shares by proxy before the Annual Meeting using one of the following methods: (1) vote via the internet at the website address listed on the Notice; (2) vote by telephone; or (3) complete, sign, date, and return your proxy card or voting instruction form in the postage-paid envelope we have provided. If you received only the Notice, you may vote your shares at the website address listed on the Notice or by telephone. If you plan to vote during the Annual Meeting rather than in advance, you may do so by entering the 16-digit control number included in your Notice, voting instructions form, or proxy card. Even if you plan to attend the Annual Meeting, you are encouraged to vote by proxy prior to the meeting. You can always change your vote, as described in more detail under "Can I change my vote or revoke my proxy?"
What is the difference between holding shares as a shareholder of record and as a beneficial owner or street name holder?
If your shares are registered directly in your name with our transfer agent, Computershare Trust Company, N.A., you are considered the "shareholder of record" with respect to those shares and we have sent the Notice (or if you received printed proxy materials, the Notice, proxy statement, and proxy card) directly to you. You may submit a proxy and vote those shares in the manner described in this proxy statement and the Notice.
If your shares are held in a stock brokerage account or by a bank, broker or other holder of record, you are considered the "beneficial owner" of shares held in street name. The Notice, voting instructions form, and/or proxy card have been forwarded to you by your broker, bank, or other holder of record who is considered the shareholder of record with respect to those shares. As the beneficial owner, you have the right to direct your broker, bank, or other holder of record on how to vote your shares by using the voting instruction card included in the mailing or by following their instructions for voting.
What does it mean if I receive more than one proxy card or Notice?
If you receive more than one proxy card or Notice, it means that you hold shares registered in more than one account. To ensure that all of your shares are voted, please follow the instructions included on each Notice you receive or, if you received printed proxy materials by mail, complete, sign, and return each proxy card you receive.
How many shares may be voted at the Annual Meeting?
On the close of business on July 12, 2023, 304,897,252 shares of Class A Stock and 1,225,074,356 shares of Class B Stock were issued and outstanding and entitled to vote at the meeting.
What constitutes a quorum?
For Proposal 1, the election of directors, a majority of the votes entitled to be cast by each of the Class A Stock and Class B Stock separately constitutes a quorum of Class A Stock and Class B Stock, respectively. For Proposals 2, 3, 4, 5, and 6, a majority of the votes entitled to be cast by both of the Class A Stock and Class B Stock together constitutes a quorum
Abstentions and broker non-votes are counted for purposes of determining whether a quorum exists. Broker non-votes occur when a person holding shares in street name, such as through a brokerage firm, does not provide instructions as to how to vote those shares and the broker does not then vote those shares on the shareholder's behalf.
How are votes calculated?
Each share of Class A Stock and each share of Class B Stock is entitled to one vote. The holders of our Common Stock will vote together on all matters at the Annual Meeting except for the election of directors, for which the holders of Class A Stock and holders of Class B Stock will vote separately. For more information regarding our Class A Stock and Class B Stock, see the section above titled "Corporate Governance—Capital Structure".
How many votes are required to approve each proposal and how are votes counted?
| | | | | | | | | | | | | | | | | |
| How many votes are required for approval? | How are director withhold votes treated? | How are abstentions treated? | How are broker non-votes handled? | How will signed proxies that do not specify voting preferences be treated? |
Proposal 1—Elect the director nominees | For the directors elected by holders of Class A Stock: a plurality of votes of the holders of Class A Stock cast, subject to our director resignation policy if a director receives less than majority support
For the directors elected by holders of Class B Stock: a plurality of votes of the holders of Class B Stock cast, subject to our director resignation policy if a director receives less than majority support
| Withhold votes will not be counted as votes cast for purposes of the plurality voting standard, but will be considered in determining whether our director resignation policy applies to a director | Abstentions are not included as votes cast and will not affect the outcome of the proposal | Broker non-votes are not included as votes cast and will not affect the outcome of the proposal | Shares will be voted "FOR" the election of each of the named nominees for director |
Proposal 2—Advisory vote to approve executive compensation | Votes of Common Stock cast in favor of the proposal must exceed votes of Common Stock cast against the proposal | N/A | Abstentions are not included as votes cast and will not affect the outcome of the proposal | Broker non-votes are not included as votes cast and will not affect the outcome of the proposal | Shares will be voted "FOR" the proposal regarding an advisory vote to approve executive compensation |
Proposal 3—Advisory vote on the frequency of advisory votes on executive compensation | Votes of Common Stock cast in favor of one frequency under the proposal must exceed votes of Common Stock cast in favor of the other frequencies under the proposal. If no frequency receives a majority vote, then the Board will consider the option that receives the highest number of votes cast to be the frequency recommended by stockholders | N/A | Abstentions are not included as votes cast and will not affect the outcome of the proposal | Broker non-votes are not included as votes cast and will not affect the outcome of the proposal | Shares will be voted for "1 YEAR" for the proposal regarding an advisory vote on the frequency of advisory votes on executive compensation |
Proposal 4— Ratify selection of PwC as our independent registered public accounting firm | Votes of Common Stock cast in favor of the proposal must exceed votes of Common Stock cast against the proposal | N/A | Abstentions are not included as votes cast and will not affect the outcome of the proposal | Banks, brokers and other holders of record may exercise discretion and vote on this matter and these will be counted as votes cast | Shares will be voted "FOR" the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm |
Proposal 5— Consider a shareholder proposal regarding Supplemental Pay Equity Disclosure | Votes of Common Stock cast in favor of the proposal must exceed votes of Common Stock cast against the proposal | N/A | Abstentions are not included as votes cast and will not affect the outcome of the proposal | Broker non-votes are not included as votes cast and will not affect the outcome of the proposal | Shares will be voted "AGAINST" the shareholder proposal regarding supplemental pay equity disclosure |
Proposal 6— Consider a shareholder proposal regarding a Supply Chain Management Report | Votes of Common Stock cast in favor of the proposal must exceed votes of Common Stock cast against the proposal | N/A | Abstentions are not included as votes cast and will not affect the outcome of the proposal | Broker non-votes are not included as votes cast and will not affect the outcome of the proposal | Shares will be voted "AGAINST" the shareholder proposal regarding a supply chain management report |
What happens if a director fails to receive the support of a majority of votes cast?
The Bylaws and the Corporate Governance Guidelines of the Company provide that any nominee for director in an uncontested election who receives a greater number of votes "withheld" from their election than votes "for" such election shall tender their resignation for consideration by the Corporate Responsibility, Sustainability & Governance Committee. The committee will
recommend to the Board the action to be taken with respect to the resignation, and the Board will publicly disclose its decision within 90 days after the certification of the election results.
Can I change my vote or revoke my proxy?
You can change your vote or revoke your proxy at any time before it is exercised at the Annual Meeting by voting your shares online during the Annual Meeting or by delivering to the Corporate Secretary and Chief Ethics & Compliance Officer of NIKE, Inc. at One Bowerman Drive, Beaverton, Oregon 97005-6453 either written notice of your revocation or an executed proxy bearing a later date.
How are proxies being solicited?
In addition to soliciting proxies by mail, certain officers and employees of the Company, without extra compensation, may also solicit proxies personally or by telephone. Copies of proxy solicitation materials will be furnished to fiduciaries, custodians, and brokerage houses for forwarding to the beneficial owners of shares held in their names. We may retain Georgeson, Inc. to solicit proxies at a cost we anticipate will not exceed $17,500. The Company will bear the cost of soliciting proxies.
How do I find out the voting results?
Preliminary voting results will be announced at the Annual Meeting, and final voting results will be published in a Current Report on Form 8-K within four business days following the Annual Meeting.
How can I submit a proposal for next year's annual meeting?
A shareholder proposal (other than a proxy access nomination) intended for inclusion in the Company's proxy statement and form of proxy for the 2024 annual meeting of shareholders must be received by the Corporate Secretary of NIKE, Inc. at shareholder.proposals@Nike.com on or before April 8, 2021 to be eligible for inclusion.March 30, 2024. Rules under the Securities Exchange Act of 1934, as amended, describe standards as to the submission of shareholder proposals. A shareholder proxy access nomination intended for inclusion in the Company's proxy statement and form of proxy for the 2024 annual meeting of shareholders must be received, along with the other information required by the Company's Bylaws, by the Corporate Secretary of NIKE, Inc. at One Bowerman Drive, Beaverton, Oregon 97005-6453, no earlier than February 29, 2024 and no later than March 30, 2024.
In addition, the Company’sCompany's Bylaws require that any shareholder wishing to make a nomination for director or wishing to introduce a proposal or other business at a shareholder meeting must give the Company at least 60 days’days' advance written notice which(which for the 20212023 annual meeting of shareholders iswas July 18, 2021,14, 2023) and that notice must meet certain other requirements described in the Bylaws.
In addition to satisfying the foregoing requirements under the Company's Bylaws, to comply with the universal proxy rules, shareholders who intend to solicit proxies in support of director nominees other than the Company's nominees for the 2024 annual meeting of shareholders must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act no later than July 14, 2024. The advance notice requirement under Rule 14a-19 does not override or supersede the longer advance notice requirement under the Company's Bylaws.
For the Board of Directors,
Ann M. Miller
Mary Hunter
Vice President, Corporate Secretary and Chief Ethics & Compliance Officer
20202023 PROXY STATEMENT 6772
EXHIBIT A
NIKE, INC. STOCK INCENTIVE PLAN
As amended as of June 17, 2020
1. Purpose. The purpose of this Stock Incentive Plan (the “Plan”) is to enable NIKE, Inc. (the “Company”) to attract and retain experienced officers, directors, employees, consultants, advisors, and independent contractors and to provide an incentive for them to apply their best efforts on behalf of the Company.
2. Shares Subject to the Plan.
(a) Shares Authorized. Subject to adjustment as provided below and in paragraph 9, the shares to be offered under the Plan shall consist of Class B Common Stock of the Company (“Shares”), and the total number of Shares that may be issued under the Plan shall not exceedseven hundred ninety-eight million (798,000,000) Shares (the “Plan Limit”).
(b) Share Usage. If an option or stock appreciation right granted under the Plan expires, terminates or is canceled, the unissued Shares subject to such option or stock appreciation right shall again be available under the Plan. If any Shares issued pursuant to a Stock Award (as defined in paragraph 7) are forfeited to the Company, or the award expires, terminates or is canceled, the number of Shares forfeited or unissued shall again be available under the Plan. Upon the exercise of an option or stock appreciation right, the number of Shares reserved for issuance under the Plan shall be reduced by the number of Shares issued upon such exercise, plus the number of Shares, if any, withheld upon exercise as full or partial payment of the exercise price or to satisfy the tax withholding amount. Cash payments of stock appreciation rights shall not reduce the number of Shares reserved for issuance under the Plan. Upon the issuance of Shares under a Stock Award, the number of Shares reserved for issuance under the Plan shall be reduced by the number of Shares issued. For all purposes of this paragraph 2(b), the number of Shares “issued” pursuant to a Stock Award shall be net of any Shares withheld to satisfy tax withholding obligations with respect to the award. The number of Shares available for issuance under the Plan shall not be reduced to reflect any dividends or dividend equivalents that are reinvested into additional Shares or credited as additional Shares subject or paid with respect to an award.
(c) Fungible Share Provision. Any Shares subject to an option or stock appreciation right granted under the Plan shall be counted against the Plan Limit as one Share for every one Share subject to such option or stock appreciation right, except that a stock appreciation right payable solely in cash shall not be counted against the Plan Limit. Any Shares issued pursuant to a Stock Award shall be counted against the Plan Limit as one Share for every one Share so issued; provided, however, that if the aggregate number of Shares issued pursuant to Stock Awards and Share-denominated awards intended to qualify as qualified performance-based compensation under Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), and the regulations thereunder (“Performance-Based Awards”) granted after July 16, 2010 exceeds the Full Value Limit (as defined below), any excess Shares issued under those awards shall be counted against the Plan Limit as two and eight-tenths (2.8) Shares for every one Share so issued. If any Shares issued pursuant to a Stock Award or a Performance-Based Award are counted against the Plan Limit as two and eight-tenths (2.8) Shares as provided above, and any Shares issued pursuant to a Stock Award or a Performance-Based Award are subsequently forfeited to the Company, the number of Shares that again become available under the Plan shall be equal to the number of Shares forfeited (up to the aggregate number of Shares previously counted against the Plan Limit as two and eight-tenths (2.8) Shares) multiplied by two and eight-tenths (2.8). Subject to adjustment as provided in paragraph 9, the “Full Value Limit” shall equal twenty-five million (25,000,000) Shares plus the number of Shares issued pursuant to Stock Awards granted on or before July 16, 2010 that are forfeited to the Company or withheld to satisfy tax withholding obligations after July 16, 2010.
(d) Award Limits.
(i) Incentive Stock Options. Subject to adjustment under paragraph 9, a maximum of seven hundred ninety-eight million (798,000,000) Shares shall be available for issuance under incentive stock options as defined in Section 422 of the Code (“Incentive Stock Options”).
(ii) Limits on Awards to Non-Employee Directors. No Non-Employee Director may be granted any award or awards denominated in Shares that exceed in the aggregate $500,000 in value (such value computed as of the date of grant in accordance with applicable financial accounting rules) in any fiscal year, plus an additional $500,000 in value for one-time awards to a newly appointed or elected Non-Employee Director. A “Non-Employee Director” is any member of the Board of Directors who is not an employee of the Company.
(e) Dividends. Participants in the Plan may, if the Committee (as defined in paragraph 4) so determines, be credited with dividends or dividend equivalents for dividends paid with respect to Shares underlying an award in a manner determined by the Committee in its sole discretion, provided that with respect to awards that are subject to achievement of performance goals, any such credited dividends or dividend equivalents may only be paid with respect to the portion of such awards that is actually earned.
The Committee may apply any restrictions to the dividends or dividend equivalents that the Committee deems appropriate. The Committee, in its sole discretion, may determine the form of payment of dividends or dividend equivalents, including cash, shares of the Class B Common Stock, restricted stock or restricted stock units.
3. Duration of Plan. The Plan shall continue in effect until all Shares available for issuance under the Plan have been issued and all restrictions on such Shares have lapsed; provided, however, that no awards shall be made under the Plan on or after the 10th anniversary of the last action by the shareholders approving any amendment to the Plan or amendment and restatement of the Plan to increase the number of Shares available for issuance under the Plan. The Board of Directors may suspend or terminate the Plan at any time except with respect to awards and Shares subject to restrictions then outstanding under the Plan. Termination shall not affect any outstanding awards or the forfeitability of Shares issued under the Plan.
4. Administration. The Plan shall be administered by a committee appointed by the Board of Directors of the Company consisting of not less than two directors (the “Committee”), which shall determine and designate from time to time the individuals to whom awards shall be made, the amount of the awards and the other terms and conditions of the awards, except that only the Board of Directors may amend or terminate the Plan as provided in paragraphs 3 and 13. Subject to the provisions of the Plan, the Committee may from time to time adopt and amend rules and regulations relating to administration of the Plan, adopt forms of award agreements setting out the terms and conditions of the awards, advance the lapse of any waiting period, accelerate any exercise date, waive or modify any restriction applicable to Shares (except those restrictions imposed by law) and make all other determinations in the judgment of the Committee necessary or desirable for the administration of the Plan. The interpretation and construction of the provisions of the Plan and related agreements by the Committee shall be final and conclusive. The Committee may correct any defect or supply any omission or reconcile any inconsistency in the Plan or in any related agreement in the manner and to the extent it shall deem expedient to carry the Plan into effect, and it shall be the sole and final judge of such expediency. The Committee may allocate among its members and delegate to any person who is not a member of the Committee any of its powers, responsibilities or duties.
5. Types of Awards; Eligibility; General Terms of Awards.
(a) Awards. The Committee may, from time to time, take the following actions, separately or in combination, under the Plan: (i) grant Incentive Stock Options as provided in paragraph 6(b); (ii) grant options other than Incentive Stock Options (“Non-Statutory Stock Options”) as provided in paragraph 6(c); (iii) grant Stock Awards, including restricted stock and restricted stock units, as provided in paragraph 7; and (iv) grant stock appreciation rights as provided in paragraph 8.
(b) Eligibility. Any such awards may be made to employees, including employees who are officers or directors, of the Company or any parent or subsidiary corporation of the Company and to other individuals described in paragraph 1; provided, however, that only employees of the Company shall be eligible to receive Incentive Stock Options under the Plan. The Committee shall select the individuals to whom awards shall be made. The Committee shall specify the action taken with respect to each individual to whom an award is made under the Plan.
(c) Termination of Service. For purposes of the Plan, service means service as a Non-Employee Director, consultant, advisor or independent contractor of the Company or a parent or subsidiary corporation of the Company and termination of service means termination of employment or service.
6. Option Grants.
(a) Grant. The Committee may grant options under the Plan. With respect to each option grant, the Committee shall determine the number of Shares subject to the option, the option price, the period of the option, the time or times at which the option may be exercised and whether the option is an Incentive Stock Option or a Non-Statutory Stock Option.
(b) Incentive Stock Options. Incentive Stock Options shall be subject to the following terms and conditions:
(i) An Incentive Stock Option may be granted under the Plan to an employee possessing more than 10 percent of the total combined voting power of all classes of stock of the Company or of any parent or subsidiary of the Company only if the option price is at least 110 percent of the fair market value of the Shares subject to the option on the date it is granted, as described in paragraph 6(b)(iii), and the option by its terms is not exercisable after the expiration of five years from the date it is granted.
(ii) Subject to paragraphs 6(b)(i) and 6(d), Incentive Stock Options granted under the Plan shall continue in effect for the period fixed by the Committee, except that no Incentive Stock Option shall be exercisable after the expiration of 10 years from the date it is granted.
(iii) The option price per share shall be determined by the Committee at the time of grant. Subject to paragraph 6(b)(i), the option price shall not be less than 100 percent of the fair market value of the Shares covered by the Incentive Stock Option at the date the option is granted. The fair market value shall be deemed to be the closing price of the Class B Common Stock of the Company as reported in the New York Stock Exchange Composite Transactions in the Wall Street Journal on the date the option is granted, or if there has been no sale on that date, on the last preceding date on which a sale occurred, or such other reported value of the Class B Common Stock of the Company as shall be specified by the Committee.
(iv) No Incentive Stock Option shall be granted on or after the tenth anniversary of the last action by the Board of Directors approving an increase in the number of Shares available for issuance under the Plan, which action was subsequently approved within 12 months by the shareholders.
(c) Non-Statutory Stock Options. The option price for Non-Statutory Stock Options shall be determined by the Committee at the time of grant. The option price may not be less than 100 percent of the fair market value of the Shares covered by the Non-Statutory Stock Option on the date the option is granted. The fair market value of Shares covered by a Non-Statutory Stock Option shall be determined pursuant to paragraph 6(b)(iii). No Non-Statutory Stock Option shall be exercisable after the expiration of 10 years from the date it is granted.
(d) Exercise of Options. Except as provided in the applicable award agreement, no option granted under the Plan may be exercised unless at the time of such exercise the optionee is employed by or providing services to the Company or any parent or subsidiary corporation of the Company and shall have been so employed or providing services continuously since the date such option was granted. Absence on leave or on account of illness or disability under rules established by the Committee shall not, however, be deemed an interruption of employment or service for this purpose. Except as provided in paragraphs 9 and 10, options granted under the Plan may be exercised from time to time over the period stated in each option in such amounts and at such times as shall be prescribed by the Committee, provided that options shall not be exercised for fractional Shares. Unless otherwise determined by the Committee, if the optionee does not exercise an option in any one year with respect to the full number of Shares to which the optionee is entitled in that year, the optionee’s rights shall be cumulative and the optionee may purchase those Shares in any subsequent year during the term of the option.
(e) Nontransferability. Except as provided below, each stock option granted under the Plan by its terms shall be nonassignable and nontransferable by the optionee, either voluntarily or by operation of law, and each option by its terms shall be exercisable during the optionee’s lifetime only by the optionee. A stock option may be transferred by will or by the laws of descent and distribution of the state or country of the optionee’s domicile at the time of death. A Non-Statutory Stock Option shall also be transferable pursuant to a qualified domestic relations order as defined under the Code or Title I of the Employee Retirement Income Security Act. The Committee may, in its discretion, authorize all or a portion of a Non-Statutory Stock Option granted to an optionee to be on terms which permit transfer by the optionee to (i) the spouse, children or grandchildren of the optionee (“Immediate Family Members”), (ii) a trust or trusts for the exclusive benefit of Immediate Family Members, or (iii) a partnership in which Immediate Family Members are the only partners, provided that (x) there may be no consideration for any transfer, (y) the option agreement pursuant to which the options are granted must expressly provide for transferability in a manner consistent with this paragraph, and (z) subsequent transfers of transferred options shall be prohibited except by will or by the laws of descent and distribution. Following any transfer, options shall continue to be subject to the same terms and conditions as were applicable immediately prior to transfer, provided that for purposes of paragraphs 6(d), 6(f), 9 and 10 the term “optionee” shall be deemed to refer to the transferee. The events of termination of service as set forth in the applicable award agreement shall continue to be applied with respect to the original optionee, following which the options shall be exercisable by the transferee only to the extent, and for the periods specified, and all other references to employment or service, termination of service, life or death of the optionee, shall continue to be applied with respect to the original optionee.
(f) Purchase of Shares. Unless the Committee determines otherwise, Shares may be acquired pursuant to an option granted under the Plan only upon receipt by the Company of notice from the optionee of the optionee’s intention to exercise, specifying the number of Shares as to which the optionee desires to exercise the option and the date on which the optionee desires to complete the transaction, and if required in order to comply with the Securities Act of 1933, as amended, containing a representation that it is the optionee’s present intention to acquire the Shares for investment and not with a view to distribution. Unless the Committee determines otherwise, on or before the date specified for completion of the purchase of Shares pursuant to an option, the optionee must have paid the Company the full purchase price of such Shares in cash or with the consent of the Committee, in whole or in part, in Class B Common Stock of the Company valued at fair market value, or by having the Company withhold shares of Class B Common Stock of the Company that would otherwise be issued on exercise of the option that have an aggregate fair market value equal to the aggregate purchase price of the Shares being purchased under the option. The fair market value of Class B Common Stock of the Company provided in payment of the purchase price shall be the closing price of the Class B Common Stock of the Company as reported in the New York Stock Exchange Composite Transactions in the Wall Street Journal or such other reported value of the Class B Common Stock of the Company as shall be specified by the Committee, on the date the option is exercised, or if such date is not a trading day, then on the immediately preceding trading day. No Shares shall be issued until full payment
therefor has been made. With the consent of the Committee, an optionee may request the Company to apply automatically the Shares to be received upon the exercise of a portion of a stock option to satisfy the purchase price for additional portions of the option. Each optionee who has exercised an option shall immediately upon notification of the amount due, if any, pay to the Company in cash amounts necessary to satisfy any applicable federal, state and local tax withholding requirements. If additional withholding is or becomes required beyond any amount deposited before delivery of the Shares, the optionee shall pay such amount to the Company on demand. If the optionee fails to pay the amount demanded, the Company may withhold that amount from other amounts payable by the Company to the optionee, including salary, subject to applicable law. With the consent of the Committee, an optionee may satisfy the minimum statutory withholding obligation, in whole or in part, by having the Company withhold from the Shares to be issued upon the exercise that number of Shares that would satisfy the withholding amount due or by delivering Class B Common Stock of the Company to the Company to satisfy the withholding amount.
(g) No Repricing. Except for actions approved by the shareholders of the Company or adjustments made pursuant to paragraph 9, the option price for an outstanding option granted under the Plan may not be decreased after the date of grant nor may the Company grant a new option or pay any cash or other consideration (including another award under the Plan) in exchange for any outstanding option granted under the Plan at a time when the option price of the outstanding option exceeds the fair market value of the Shares covered by the option.
7. Stock Awards. The Committee may grant Shares as stock awards under the Plan (“Stock Awards”). Stock Awards shall be subject to the terms, conditions, and restrictions determined by the Committee, including time-based and performance-based vesting conditions. The restrictions may include restrictions concerning transferability and forfeiture of the Shares awarded, together with such other restrictions as may be determined by the Committee. Stock Awards subject to restrictions may be either restricted stock awards under which Shares are issued immediately upon grant subject to forfeiture if vesting conditions are not satisfied, or restricted stock unit awards under which Shares are not issued until after vesting conditions are satisfied. Restricted stock awards may be evidenced in such manner as the Committee deems appropriate, in its sole discretion, including book-entry registration (in which case the restrictions shall be placed on the book-entry registration) or issuance of one or more stock certificates (in which case the certificates shall bear any legends required by the Committee). The Committee may require the recipient to sign an agreement as a condition of the award, but may not require the recipient to pay any monetary consideration other than amounts necessary to satisfy tax withholding requirements. The agreement may contain any terms, conditions, restrictions, representations and warranties required by the Committee. The Company may require any recipient of a Stock Award to pay to the Company in cash upon demand amounts necessary to satisfy any applicable federal, state or local tax withholding requirements. If the recipient fails to pay the amount demanded, the Company may withhold that amount from other amounts payable by the Company to the recipient, including salary, subject to applicable law. With the consent of the Committee, a recipient may satisfy the minimum statutory withholding obligation, in whole or in part, by having the Company withhold from the awarded Shares that number of Shares that would satisfy the withholding amount due or by delivering Class B Common Stock of the Company to the Company to satisfy the withholding amount.
8. Stock Appreciation Rights.
(a) Grant. Stock appreciation rights may be granted under the Plan by the Committee, subject to such rules, terms, and conditions as the Committee prescribes.
(b) Exercise.
(i) A stock appreciation right shall be exercisable only at the time or times established by the Committee, except that no stock appreciation right shall be exercisable after the expiration of 10 years from the date it is granted. If a stock appreciation right is granted in connection with an option, the stock appreciation right shall be exercisable only to the extent and on the same conditions that the related option could be exercised. Upon exercise of a stock appreciation right, any option or portion thereof to which the stock appreciation right relates terminates. If a stock appreciation right is granted in connection with an option, upon exercise of the option, the stock appreciation right or portion thereof to which the option relates terminates.
(ii) The Committee may withdraw any stock appreciation right granted under the Plan at any time and may impose any conditions upon the exercise of a stock appreciation right or adopt rules and regulations from time to time affecting the rights of holders of stock appreciation rights. Such rules and regulations may govern the right to exercise stock appreciation rights granted before adoption or amendment of such rules and regulations as well as stock appreciation rights granted thereafter.
(iii) Each stock appreciation right shall entitle the holder, upon exercise, to receive from the Company in exchange therefor an amount equal in value to the excess of the fair market value on the date of exercise of one Share over its fair market value on the date of grant or such higher amount as the Committee may determine (or, in the case of a stock appreciation right granted in connection with an option, the option price per Share under the option to which the stock appreciation right relates), multiplied by the number of Shares covered by the stock appreciation right or the option, or portion thereof, that is
surrendered. Payment by the Company upon exercise of a stock appreciation right may be made in Shares valued at fair market value, in cash, or partly in Shares and partly in cash, all as determined by the Committee.
(iv) For purposes of this paragraph 8, the fair market value of the Class B Common Stock of the Company on the date a stock appreciation right is exercised shall be the closing price of the Class B Common Stock of the Company as reported in the New York Stock Exchange Composite Transactions in the Wall Street Journal, or such other reported value of the Class B Common Stock of the Company as shall be specified by the Committee, on the date the stock appreciation right is exercised, or if such date is not a trading day, then on the immediately preceding trading day.
(v) No fractional Shares shall be issued upon exercise of a stock appreciation right. In lieu thereof, cash shall be paid in an amount equal to the value of the fractional share.
(vi) Each stock appreciation right granted under the Plan by its terms shall be nonassignable and nontransferable by the holder, either voluntarily or by operation of law, except by will or by the laws of descent and distribution of the state or country of the holder’s domicile at the time of death, and each stock appreciation right by its terms shall be exercisable during the holder’s lifetime only by the holder; provided, however, that a stock appreciation right not granted in connection with an Incentive Stock Option shall also be transferable pursuant to a qualified domestic relations order as defined under the Code or Title I of the Employee Retirement Income Security Act.
(vii) Each participant who has exercised a stock appreciation right shall, upon notification of the amount due, pay to the Company in cash amounts necessary to satisfy any applicable federal, state or local tax withholding requirements. If the participant fails to pay the amount demanded, the Company may withhold that amount from other amounts payable by the Company to the participant including salary, subject to applicable law. With the consent of the Committee a participant may satisfy the minimum statutory obligation, in whole or in part, by having the Company withhold from any Shares to be issued upon the exercise that number of Shares that would satisfy the withholding amount due or by delivering Class B Common Stock of the Company to the Company to satisfy the withholding amount.
(c) No Repricing. Except for actions approved by the shareholders of the Company or adjustments made pursuant to paragraph 9, the grant price for an outstanding stock appreciation right granted under the Plan may not be decreased after the date of grant nor may the Company grant a new stock appreciation right or pay any cash or other consideration (including another award under the Plan) in exchange for any outstanding stock appreciation right granted under the Plan at a time when the grant price of the outstanding stock appreciation right exceeds the fair market value of the Shares covered by the stock appreciation right.
9. Changes in Capital Structure. If the outstanding Shares are hereafter increased or decreased or changed into or exchanged for a different number or kind of shares or other securities of the Company by reason of any recapitalization, reclassification, stock split, combination of shares, dividend payable in shares, or large nonrecurring cash dividend, the authorization limits under paragraphs 2(a), 2(c) and 2(d)(i) shall be adjusted proportionately. In addition, the number and kind of shares subject to outstanding awards, and the exercise price of outstanding options and stock appreciation rights shall be adjusted, to the end that the recipient’s proportionate interest is maintained as before the occurrence of such event. The Committee may also require that any securities issued in respect of or exchanged for Shares issued hereunder that are subject to restrictions be subject to similar restrictions. Notwithstanding the foregoing, the Committee shall have no obligation to effect any adjustment that would or might result in the issuance of fractional shares, and any fractional shares resulting from any adjustment may be disregarded or provided for in any manner determined by the Committee. Any adjustments made pursuant to this paragraph 9 shall be conclusive.
10. Sale of the Company; Change in Control.
(a) Sale of the Company. Unless otherwise provided in the applicable award agreement, if during the term of an option, stock appreciation right or restricted stock unit award, there shall occur a merger, consolidation or plan of exchange involving the Company pursuant to which outstanding Shares are converted into cash or other stock, securities or property, or a sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all, or substantially all, the assets of the Company, then either:
(i) the option, stock appreciation right or restricted stock unit award shall be converted into an option, stock appreciation right or restricted stock unit award to acquire stock of the surviving or acquiring corporation in the applicable transaction for a total purchase price equal to the total price applicable to the unexercised portion of the option, stock appreciation right or restricted stock unit award, and with the amount and type of shares subject thereto and exercise price per share thereof to be conclusively determined by the Committee, taking into account the relative values of the companies involved in the applicable transaction and the exchange rate, if any, used in determining shares of the surviving corporation to be held by holders of Shares following the applicable transaction, and disregarding fractional shares; or
(ii) all unissued Shares subject to restricted stock unit awards shall be issued immediately prior to the consummation of such transaction, all options and stock appreciation rights will become exercisable for 100 percent of the Shares subject to the option or stock appreciation right effective as of the consummation of such transaction, and the Committee shall approve some arrangement by which holders of options and stock appreciation rights shall have a reasonable opportunity to exercise all such options and stock appreciation rights effective as of the consummation of such transaction or otherwise realize the value of these awards, as determined by the Committee. Any option or stock appreciation right that is not exercised in accordance with procedures approved by the Committee shall terminate.
(b) Change in Control. Unless otherwise provided in the applicable award agreement, if paragraph 10(a)(ii) does not apply, all options and stock appreciation rights granted under the Plan shall become exercisable in full for a remaining term extending until the earlier of the expiration date of the applicable option or stock appreciation right or the expiration of four years after the date of termination of service, and all Stock Awards shall become fully vested , if a Change in Control occurs and at any time after the earlier of Shareholder Approval (as defined below), if any, or the Change in Control and on or before the second anniversary of the Change in Control, (i) the award holder’s service is terminated by the Company (or its successor) without Cause (as defined below), or (ii) the award holder’s service is terminated by the award holder for Good Reason (as defined below).
(i) For purposes of the Plan, a “Change in Control” of the Company shall mean the occurrence of any of the following events:
(A) At any time during a period of two consecutive years, individuals who at the beginning of such period constituted the Board of Directors of the Company (“Incumbent Directors”) shall cease for any reason to constitute at least a majority thereof; provided, however, that the term “Incumbent Director” shall also include each new director elected during such two-year period whose nomination or election was approved by two-thirds of the Incumbent Directors then in office;
(B) At any time that the holders of the Class A Common Stock of the Company have the right to elect (voting as a separate class) a majority of the members of the Board of Directors, any “person” or “group” (within the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act) shall, as a result of a tender or exchange offer, open market purchases or privately negotiated purchases from anyone other than the Company, have become the beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act), directly or indirectly, of more than 50 percent of the then outstanding Class A Common Stock of the Company;
(C) At any time after such time as the holders of the Class A Common Stock of the Company cease to have the right to elect (voting as a separate class) a majority of the members of the Board of Directors, any “person” or “group” (within the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act) shall, as a result of a tender or exchange offer, open market purchases or privately negotiated purchases from anyone other than the Company, have become the beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company ordinarily having the right to vote for the election of directors (“Voting Securities”) representing 30 percent or more of the combined voting power of the then outstanding Voting Securities;
(D) A consolidation, merger or plan of exchange involving the Company (“Merger”) as a result of which the holders of outstanding Voting Securities immediately prior to the Merger do not continue to hold at least 50 percent of the combined voting power of the outstanding Voting Securities of the surviving corporation or a parent corporation of the surviving corporation immediately after the Merger, disregarding any Voting Securities issued to or retained by such holders in respect of securities of any other party to the Merger; or
(E) A sale, lease, exchange, or other transfer (in one transaction or a series of related transactions) of all or substantially all of the assets of the Company.
(ii) For purposes of the Plan, “Shareholder Approval” shall mean approval by the shareholders of the Company of a transaction, the consummation of which would be a Change in Control.
(iii) For purposes of this Plan, “Cause” shall mean (A) the willful and continued failure to perform substantially the award holder’s reasonably assigned duties with the Company (other than any such failure resulting from incapacity due to physical or mental illness) after a demand for substantial performance is delivered to the award holder by the Company which specifically identifies the manner in which the Company believes that the award holder has not substantially performed the award holder’s duties, or (B) the willful engagement in illegal conduct which is materially and demonstrably injurious to the Company. No act, or failure to act, shall be considered “willful” if the award holder reasonably believed that the action or omission was in, or not opposed to, the best interests of the Company.
(iv) For purposes of the Plan, “Good Reason” shall mean (A) the assignment of a different title, job or responsibilities that results in a material decrease in the level of responsibility of the award holder after Shareholder Approval, if applicable, or the Change in Control when compared to the award holder’s level of responsibility for the Company’s operations prior to Shareholder Approval, if applicable, or the Change in Control; provided that Good Reason shall not exist if the award holder continues to have the same or a greater general level of responsibility for Company operations after the Change in Control as the award holder had prior to the Change in Control even if the Company operations are a subsidiary or division of the surviving company, (B) a reduction in the award holder’s base pay as in effect immediately prior to Shareholder Approval, if applicable, or the Change in Control, (C) a material reduction in the total package of benefits available to the award holder under cash incentive, stock incentive and other employee benefit plans after Shareholder Approval, if applicable, or the Change in Control compared to the total package of such benefits as in effect prior to Shareholder Approval, if applicable, or the Change in Control, or (D) the award holder is required to be based more than 50 miles from where the award holder’s office is located immediately prior to Shareholder Approval, if applicable, or the Change in Control except for required travel on company business to an extent substantially consistent with the business travel obligations which the award holder undertook on behalf of the Company prior to Shareholder Approval, if applicable, or the Change in Control. Notwithstanding any provision in this Plan to the contrary, a termination of an employment or other service relationship by the award holder will not be for Good Reason unless (1) the award holder notifies the Company in writing of the existence of the condition that the award holder believes constitutes Good Reason within thirty (30) days of the initial existence of such condition (which notice specifically identifies such condition), (2) the Company fails to remedy such condition within thirty (30) days after the date that it receives such notice (the “Remedial Period”), and (3) the award holder actually terminates the award holder’s employment or other service relationship within thirty (30) days after the expiration of the Remedial Period. If the award holder terminates his or her employment or other service relationship before the expiration of the Remedial Period or after the Company remedies the condition, then the award holder’s termination will not be considered to be for Good Reason.
11. Corporate Mergers, Acquisitions, etc. The Committee may also grant options, stock appreciation rights and Stock Awards under the Plan having terms, conditions and provisions that vary from those specified in the Plan, provided that any such awards are granted in substitution for, or in connection with the assumption of, existing options, stock appreciation rights or Stock Awards issued by another corporation and assumed or otherwise agreed to be provided for by the Company pursuant to or by reason of a transaction involving a corporate merger, consolidation, plan of exchange, acquisition of property or stock, separation, reorganization or liquidation to which the Company or a parent or subsidiary corporation of the Company is a party. The number of Shares available for issuance under the Plan shall not be reduced to reflect any awards granted in substitution for awards of an acquired company.
12. Clawback Policy. Unless otherwise provided in the applicable award agreement, all awards under the Plan shall be subject to (a) any applicable securities, tax and stock exchange laws, rules and regulations relating to the recoupment or clawback of incentive compensation, (b) the NIKE, Inc. Policy for Recoupment of Incentive Compensation as approved by the Committee and in effect at the time of grant, (c) such other policy for clawback or recoupment of incentive compensation as may subsequently be approved from time to time by the Committee, and (d) any clawback or recoupment provisions set forth in the agreement evidencing the award.
13. Amendment of Plan. The Board of Directors may at any time, and from time to time, modify or amend the Plan in such respects as it shall deem advisable because of changes in the law while the Plan is in effect or for any other reason, provided that no amendment of the Plan shall be made without shareholder approval if shareholder approval of the amendment is at the time required by the rules of any stock exchange on which the Class B Stock may then be listed. Except as provided in paragraphs 8, 9 and 10, however, no change in an award already granted shall be made without the written consent of the holder of such award.
14. Approvals. The obligations of the Company under the Plan are subject to the approval of state and federal authorities or agencies with jurisdiction in the matter. The Company will use its best efforts to take steps required by state or federal law or applicable regulations, including rules and regulations of the Securities and Exchange Commission and any stock exchange or trading system on which the Company’s shares may then be listed or admitted for trading, in connection with the grants under the Plan. The foregoing notwithstanding, the Company shall not be obligated to issue or deliver Class B Common Stock under the Plan if such issuance or delivery would violate applicable state or federal securities laws.
15. Employment and Service Rights. Nothing in the Plan or any award pursuant to the Plan shall (a) confer upon any participant any right to be continued in the employment of or service with the Company or any parent or subsidiary corporation of the Company or interfere in any way with the right of the Company or any parent or subsidiary corporation of the Company by whom such participant is employed or to whom such participant is providing services to terminate such participant’s employment or service at any time, for any reason, with or without cause, or to increase or decrease such participant’s compensation or benefits, or (b) confer upon any person engaged by the Company any right to be employed or retained by the Company or to the continuation, extension, renewal, or modification of any compensation, contract, or arrangement with or by the Company.
16. Rights as a Shareholder. The recipient of any award under the Plan shall have no rights as a shareholder with respect to any Shares until the date such Shares are actually issued to the recipient. Except as otherwise expressly provided in the Plan, no adjustment shall be made for dividends or other rights for which the record date is prior to the date of such issuance.
17. Choice of Law and Venue. The Plan, all awards granted thereunder and all determinations made and actions taken pursuant thereto, to the extent not otherwise governed by the laws of the United States, shall be governed by the laws of the State of Oregon. For purposes of litigating any dispute that arises under the Plan, all awards granted thereunder and all determinations made and actions taken pursuant thereto, the parties hereby submit to and consent to the jurisdiction of, and agree that such litigation shall be conducted in, the courts of Washington County, Oregon or the United States District Court for the District of Oregon, where this Agreement is made and/or to be performed.
18. Section 409A.
(a) All awards made under the Plan that are intended to be “deferred compensation” subject to Section 409A of the Code (“Section 409A”) will be interpreted, administered and construed to comply with Section 409A, and all awards made under the Plan that are intended to be exempt from Section 409A will be interpreted, administered and construed to comply with and preserve such exemption. The Board of Directors and the Committee will have full authority to give effect to the intent of the foregoing sentence. To the extent necessary to give effect to this intent, in the case of any conflict or potential inconsistency between this paragraph 18 of the Plan and a provision of any award or award agreement with respect to an award, this paragraph 18 of the Plan will govern.
(b) Without limiting the generality of paragraph 18(a), with respect to any award made under the Plan that is intended to be “deferred compensation” subject to Section 409A:
(i) any payment due upon a recipient’s termination of employment will be paid only upon such recipient’s separation from service from the Company within the meaning of Section 409A ;
(ii) any payment due upon a change in control of the Company will be paid only if such change in control constitutes a “change in ownership” or “change in effective control” within the meaning of Section 409A, and in the event that such change in control does not constitute a “change in the ownership” or “change in the effective control” within the meaning of Section 409A, such award will vest upon the change in control and any payment will be delayed until the first compliant date under Section 409A;
(iii) any payment to be made with respect to any award (or any other payment under this Plan) that would be subject to the limitations in Section 409A(a)(2)(B) of the Code will be delayed until six months after the recipient’s separation from service (or earlier death) in accordance with the requirements of Section 409A;
(iv) to the extent necessary to comply with Section 409A, any other securities, other awards or other property that the Company may deliver in lieu of Shares in respect of an award will not have the effect of deferring delivery or payment beyond the date on which such delivery or payment would occur with respect to the Shares that would otherwise have been deliverable (unless the Committee elects a later date for this purpose in accordance with the requirements of Section 409A);
(v) if the award includes a “series of installment payments” (within the meaning of Section 1.409A-2(b)(2)(iii) of the Treasury Regulations), the recipient’s right to the series of installment payments will be treated as a right to a series of separate payments and not as a right to a single payment;
(vi) if the award includes “dividend equivalents” (within the meaning of Section 1.409A-3(e) of the Treasury Regulations), the recipient’s right to the dividend equivalents will be treated separately from the right to other amounts under the award; and
(vii) for purposes of determining whether the recipient has experienced a separation from service from the Company within the meaning of Section 409A, “subsidiary” will mean a corporation or other entity in a chain of corporations or other entities in which each corporation or other entity, starting with the Company, has a controlling interest in another corporation or other entity in the chain, ending with such corporation or other entity. For purposes of the preceding sentence, the term “controlling interest” has the same meaning as provided in Section 1.414(c)-2(b)(2)(i) of the Treasury Regulations, provided that the language “at least 20 percent” is used instead of “at least 80 percent” each place it appears in Section 1.414(c)-2(b)(2)(i) of the Treasury Regulations.
ANNUAL
MEETING
AND
PROXY STATEMENT
September 17, 202012, 2023
Whether or not you plan to attend the meeting, please sign and date the enclosed proxy card and return it in the enclosed envelope, or vote online or by telephone following the instructions on the proxy card.
|
| |
| VOTE BY INTERNET
Before The Meeting - Go to www.proxyvote.com
Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time on September 16, 2020. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
During The Meeting - Go to www.virtualshareholdermeeting.com/NKE2020
You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions.
VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time on September 16, 2020. Have your proxy card in hand when you call and then follow the instructions.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
|
NIKE, INC.
ANN M. MILLER
ONE BOWERMAN DRIVE
BEAVERTON, OR 97005-6453
|
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
|
| |
D21035-P43098 | KEEP THIS PORTION FOR YOUR RECORDS |
| DETACH AND RETURN THIS PORTION ONLY |
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
|
| | | | | | | | | | | | | | | | | | |
NIKE, INC. | | | | | | | | | | | |
| The Board of Directors recommends a vote FOR all the nominees listed in Proposal 1, a vote FOR Proposals 2, 3, and 4, and a vote AGAINST Proposal 5.
| | | | | | | | | | | | | |
| | | | | | | | | | | | |
| 1. | Class A director nominees: To elect a Board of Directors for the ensuing year. | | For | Withhold | | | | | | | | |
| | | | | | | | | | | | | |
| | 1a. | Cathleen A. Benko | | ☐ | ☐ | | | | | For | Against | Abstain | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | 1b. | Elizabeth J. Comstock | | ☐ | ☐ | | 2. | To approve executive compensation by an advisory vote. | | ☐ | ☐ | ☐ | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | 1c. | John G. Connors | | ☐ | ☐ | | 3. | To ratify the appointment of PricewaterhouseCoopers LLP as independent registered public accounting firm. | | ☐ | ☐ | ☐ | |
| | | | | | | | | | | | | | |
| | 1d. | Timothy D. Cook | | ☐ | ☐ | | 4. | To approve the Nike, Inc. Stock Incentive Plan, as amended and restated. | | ☐ | ☐ | ☐ | |
| | | | | | | | | | | | | | |
| | 1e. | John J. Donahoe II | | ☐ | ☐ | | 5. | To consider a shareholder proposal regarding political contributions disclosure. | | ☐ | ☐ | ☐ | |
| | | | | | | | | | | | | | |
| | 1f. | Thasunda B. Duckett | | ☐ | ☐ | | 6. | To transact such other business as may properly come before the meeting. | | | | | |
| | | | | | | | | | | | | | |
| | 1g. | Travis A. Knight | | ☐ | ☐ | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | 1h. | Mark G. Parker | | ☐ | ☐ | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | 1i. | John W. Rogers, Jr. | | ☐ | ☐ | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title. | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| Signature [PLEASE SIGN WITHIN BOX] | Date | | | | | Signature (Joint Owners) | Date | | | | | |
| | | | | | | | | | | | | | |
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The proxy materials for the Annual Meeting are available at www.proxyvote.com.
|
| | |
| D21036-P43098 | |
| | |
| Proxy - NIKE, INC. | |
| | |
| CLASS A COMMON STOCK PROXY
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE 2020 ANNUAL MEETING OF SHAREHOLDERS
SEPTEMBER 17, 2020
The undersigned hereby appoints Mark G. Parker, Travis A. Knight, and Michelle A. Peluso, and each of them, proxies with full power of substitution, to vote, as designated on the reverse side, on behalf of the undersigned, all shares of Class A Common Stock which the undersigned may be entitled to vote at the Annual Meeting of Shareholders of NIKE, Inc. on September 17, 2020, and any adjournments thereof, with all powers that the undersigned would possess if personally present. A majority of the proxies or substitutes present at the meeting may exercise all powers granted hereby.
THE SHARES REPRESENTED BY THE PROXY WILL BE VOTED AS SPECIFIED, BUT IF NO SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE NOMINEES FOR DIRECTOR FOR PROPOSAL 1, FOR PROPOSALS 2, 3, AND 4, AND AGAINST PROPOSAL 5. THE PROXIES MAY VOTE IN THEIR DISCRETION AS TO OTHER MATTERS WHICH MAY COME BEFORE THE MEETING.
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES, BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. THE PROXIES CANNOT VOTE THESE SHARES UNLESS YOU SIGN AND RETURN THIS CARD OR PROPERLY VOTE BY PHONE OR INTERNET.
Continued and to be signed on reverse side
| |
| | |
|
| |
| VOTE BY INTERNET
Before The Meeting - Go to www.proxyvote.com
Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time on September 16, 2020. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
During The Meeting - Go to www.virtualshareholdermeeting.com/NKE2020
You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions.
VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time on September 16, 2020. Have your proxy card in hand when you call and then follow the instructions.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
|
NIKE, INC.
ANN M. MILLER
ONE BOWERMAN DRIVE
BEAVERTON, OR 97005-6453
|
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
|
| |
D21037-P43098 | KEEP THIS PORTION FOR YOUR RECORDS |
| DETACH AND RETURN THIS PORTION ONLY |
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
|
| | | | | | | | | | | | | | | | | | |
NIKE, INC. | | | | | | | | | | | |
| The Board of Directors recommends a vote FOR all the nominees listed in Proposal 1, a vote FOR Proposals 2, 3, and 4, and a vote AGAINST Proposal 5.
| | | | | | | | | | | | | |
| | | | | | | | | | | | |
| 1. | Class B director nominees: To elect a Board of Directors for the ensuing year. | | For | Withhold | | | | | | | | |
| | | | | | | | | | | | | |
| | 1a. | Alan B. Graf, Jr. | | ☐ | ☐ | | | | | | | | |
| | | | | | | | | | | | | | |
| | 1b. | Peter B. Henry | | ☐ | ☐ | | | | | | | | |
| | | | | | | | | | | | | | |
| | 1c. | Michelle A. Peluso | | ☐ | ☐ | | | | | For | Against | Abstain | |
| | | | | | | | | | | | | | |
| 2. | To approve executive compensation by an advisory vote. | | | ☐ | ☐ | ☐ | |
| | | | | | | | | | | | | | |
| 3. | To ratify the appointment of PricewaterhouseCoopers LLP as independent registered public accounting firm. | | ☐ | ☐ | ☐ | |
| | | | | | | | | | | | | | |
| 4. | To approve the Nike, Inc. Stock Incentive Plan, as amended and restated. | | ☐ | ☐ | ☐ | |
| | | | | | | | | | | | | | |
| 5. | To consider a shareholder proposal regarding political contributions disclosure. | | ☐ | ☐ | ☐ | |
| | | | | | | | | | | | | | |
| 6. | To transact such other business as may properly come before the meeting. | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title. | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| Signature [PLEASE SIGN WITHIN BOX] | Date | | | | | Signature (Joint Owners) | Date | | | | | |
| | | | | | | | | | | | | | |
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The proxy materials for the Annual Meeting are available at www.proxyvote.com.
|
| | |
| D21038-P43098 | |
| | |
| Proxy - NIKE, INC. | |
| | |
| CLASS B COMMON STOCK PROXY
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE 2020 ANNUAL MEETING OF SHAREHOLDERS
SEPTEMBER 17, 2020
The undersigned hereby appoints Mark G. Parker, Travis A. Knight, and Michelle A. Peluso, and each of them, proxies with full power of substitution, to vote, as designated on the reverse side, on behalf of the undersigned, all shares of Class B Common Stock which the undersigned may be entitled to vote at the Annual Meeting of Shareholders of NIKE, Inc. on September 17, 2020, and any adjournments thereof, with all powers that the undersigned would possess if personally present. A majority of the proxies or substitutes present at the meeting may exercise all powers granted hereby.
THE SHARES REPRESENTED BY THE PROXY WILL BE VOTED AS SPECIFIED, BUT IF NO SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE NOMINEES FOR DIRECTOR FOR PROPOSAL 1, FOR PROPOSALS 2, 3, AND 4, AND AGAINST PROPOSAL 5. THE PROXIES MAY VOTE IN THEIR DISCRETION AS TO OTHER MATTERS WHICH MAY COME BEFORE THE MEETING.
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES, BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. THE PROXIES CANNOT VOTE THESE SHARES UNLESS YOU SIGN AND RETURN THIS CARD OR PROPERLY VOTE BY PHONE OR INTERNET.
| |
| Continued and to be signed on reverse side
| |
| | |