NIKE TAKES HEAT OVER CEO PAY, COVID YEAR BONUSES
The Eager Beavertons spoke with its top 15 institutional shareholders,
and about a third of total Class B shareholders over a marked drop in
support for its executive compensation policies, last week’s annual
proxy statement filing revealed. While the prior five-year average of the
non-binding vote was 90% in favor, the vote for 2020’s compensation
plan tallied just 54% support. The E.B.s wrote that while shareholders were “largely supportive of the design of the underlying executive
compensation program for fiscal 2020,” they wanted further “disclosure
on Covid-related adjustments made to payouts.”
A more conspicuous concern voiced by shareholders was CEO John
Donahoe’s $53.5 million in payment for the year, buoyed by sign-on
compensation, when he took the top job in Jan. 2020. Donahoe’s fiscal ’20 compensation broke down at $548,000 salary, $6.8 million in
bonus, $21.3 million in stock awards, $23.2 in option awards, and $1.7
million in other compensation. The E.B.s said shareholders’ concerns
were mitigated after learning that Donahoe walked away from about
$79 million in incentive awards when he left his post as president/CEO
at ServiceNow in 2019 to join Nike. Donahoe’s fiscal ’21 compensation
totaled $32.9 million, with $1.5 million salary, $13.6 million bonus, $3.6
million in stock awards, $5.4 million in option awards, $4.5 million in
non-equity incentive plan compensation and $4.3 million in all other
compensation. This puts him at a 931 to 1 ratio to the median earnings
of all other Nike employees at $36,077.
Nike said it discussed further details on Covid-related adjustments to
2020 executive compensation with shareholders and would provide
more detail on bonus impacts for 2021 in this year’s filing. In response
to feedback that sign-on bonuses should be used sparingly, the company
noted that no new executive officers were hired in 2021 and “any future
new hire awards will be evaluated on a case-by-case basis” with stockholder feedback considered. Retention awards will likewise be granted
on a case-by-case basis and “granted only in limited circumstances.”
For fiscal ’22, the company will move from annual cash incentive awards
back to Performance Sharing Plan awards. The compensation committee had moved to the cash incentives in fiscal ’21 for greater flexibility
during the volatile pandemic.