Executive Compensation
Jay MacDowell, Andrew Adelman xunhaoliang
Named Executive Officers
-John Donahue II – President and Chief Executive Officer
-Mark Parker – Executive Chairman
-Matthew Friend – Executive Vice President and Chief Financial Officer
-Andrew Campion – Chief Operating Officer
-Heidi O’Neill – President, Consumer and Marketplace
Executive Summary
-Executive Compensation Program received 54% approval from shareholders
-Shared additional compensation program details
-Shareholder satisfaction
Base Salary + Annual Cash Incentive + Long Term Incentive
-Annual incentive – based on company performance during fiscal year
-Long Term – company performance over 3 years
CEO pay
-Compensation Committee stated a payout of 90% was paid to all NEO’s
Guiding Compensation Principles
-Highly incentive based to drive results and shareholder value
-Long term incentives to increase alignment between executives and
shareholders, support retention, emphasize long term performance
-To foster teamwork they align compensation across executive roles
-Determine compensation by considering all factors relating to the business and
the market for top tier talent
Compensation Elements
-Base Salary- fixed cash
-Annual Cash Incentive Award – Earn 0%-150% based on company
-Long Term Incentive Awards
Cash – cash based on company performance 0%-200%
Stock – options and restricted stock units (retention)
Benefits
-No pension or supplemental retirement plan
-Home securities and financial planning services
-CEO and Chairman have limited personal use of company aircraft
-Certain executive officers can receive products, event tickets, and travel benefits
not offered to all employees
Executive Compensation Governance
-Base a majority of total compensation on performance and retention incentives
-Mitigate undue risk by using multiple performance periods and metrics, incentive
payment caps, and a clawback policy (all payments)
-Base incentive awards on clearly disclosed, objective performance goals
Maintain robust stock ownership guidelines
-Vest stock-based awards over time to promote long-term performance and retention
-Provide only double-trigger change-in-control acceleration for stock-based awards
Determining Executive Compensation
-The compensation committee evaluates the performance of the CEO and reviews
the performance evaluations of their other named executive officers.
-Compensation committee then recommends their compensation for approval by
the independent member of the board.
-Compensation committee also grants equity incentive awards under the Nike Inc.
Stock Incentive Plan.
-Other executive incentive compensation arrangements and profit sharing plan
contributions are also recommended to the board by the committee.
Determining Executive Compensation (continued)
-Nike’s human resources staff retains independent compensation consulting firms
to provide surveys and reports containing competitive market date.
-However, these consultants do not formulate executive compensation strategies
for Nike or recommend individual executive compensation.
-The human resources staff uses the surveys and reports to make
recommendations to the compensation committee concerning executive
compensation.
Peer Group
-Compensation committee uses a peer group to provide a reference for assessing
executive compensation levels and practices.
-Peer Group consists of companies with similar revenue size, market
capitalization, brand value, products, or markets or with which they compete for
executive talents.
Peer Group (continued)
-Nike’s peer group consisted of the following companies in 2021: American
Express Company, Best Buy Company, Inc., The Coca Cola Company,
Colgate-Palmolive Company, Comcast Corporation, The Gap, Inc., Kellogg
Company, Kimberly-Clark Corporation, McDonald’s Corporation, Microsoft
Corporation, Mondelez International Inc., Oracle Corporation, Pepsico Inc.,
Proctor and Gamble Company, Starbucks Corporation, Target Corporation, TJX
Companies, The Walt Disney Company.
Peer Group (continued)
-Nike’s peer group seems reasonable because it includes companies that share
similar characteristics. Financial professionals can compare companies in the peer
group and the peer group can be helpful for equity analysis.
Clawback policy
-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, stock-based 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
Total CEO Compensation
Pay Ratio
Our Thoughts