Form PX14A6G - Notice of exempt solicitation submitted by non-management
07 August 2024 - 7:22PM
Edgar (US Regulatory)
Notice
of Exempt Solicitation
NAME OF REGISTRANT: NIKE, Inc.
NAME OF PERSONS RELYING ON EXEMPTION:
Arjuna Capital
ADDRESS OF PERSON RELYING ON EXEMPTION: 13
Elm St. Manchester, MA 01944
WRITTEN MATERIALS: The attached written materials are submitted
pursuant to Rule 14a-6(g)(1) (the “Rule”) promulgated under the Securities Exchange Act of 1934,* in connection with a proxy
proposal to be voted on at the Registrant’s 2024 Annual Meeting. *Submission is not required of this
filer under the terms of the Rule but is made voluntarily by the proponent in the interest of public disclosure and consideration of these
important issues.
August 6, 2024
Dear Nike, Inc. Shareholders,
We are writing to urge you to VOTE “FOR” PROPOSAL 4
on the proxy card, which asks the Company to report on median pay gaps across race and gender. We believe shareholders should vote
FOR the proposal for the following reasons:
| 1. | Research shows there are significant company performance benefits associated with disclosing and acting to narrow statistically-adjusted
and median pay gaps. |
| 2. | Nike does not follow best practice pay equity reporting practices as it does not report median racial or gender pay gap data. |
| 3. | Nike continues to face public scrutiny for alleged gender discrimination and unfair pay. |
| 4. | Median pay gap reporting provides valuable data distinct from the Company’s diversity data. |
| 5. | Median pay disclosures can benchmark Nike’s progress in Diversity, Equity, and Inclusion (DEI). |
| 6. | Nike lags peers on racial and gender pay equity disclosures/commitments. |
Expanded Rationale FOR Proposal 4
The Proposal makes the following request:
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).
We believe shareholders should vote “FOR” the Proposal
for the following reasons:
| 1. | Research shows there are significant company performance benefits associated with disclosing and acting to narrow statistically-adjusted
and median pay gaps: |
| a. | Pay equity within companies leads to greater workforce diversity, and greater workforce diversity leads to strong company performance
benefits. 1, 2, 3, 4 |
| b. | Closing median pay gaps by increasing female and minority representation in leadership positions is associated with strong
company performance benefits. 5, 6 |
| c. | Disclosing pay gaps leads to the narrowing of these gaps, resulting in company performance benefits. 7, 8, 9, 10, 11 |
| 2. | Nike does not follow best practice pay equity reporting practices as it does not report median racial or gender pay gap data. |
| a. | Best practice pay equity reporting consists of annually reporting two metrics: |
| i. | Unadjusted-Median Pay Gaps: Assess how pay is distributed by race and gender, and which groups hold the
high versus low-paying jobs. This is the data requested in this proposal, as Nike has refused to provide this transparency. |
| 1. | This data point is measured by assessing the median pay of minorities/women working full time versus non-minorities/men working full
time. This is the metric that the United States Census Bureau, Department of Labor, OECD, and International Labor Organization use when
discussing pay gaps. |
| 2. | Black workers in the U.S. earn 81 cents on the dollar versus white workers, and women in the U.S. earn 84 cents on the dollar versus
men on this basis. |
| 3. | United Kingdom and Ireland-based companies, and soon companies in the European Union, are mandated to report median pay gap data. |
| ii. | Statistically-Adjusted Pay Gaps: Assess the pay between minorities/non-minorities and women/men performing
similar roles —data we pressed Nike to report in 2017. |
| 1. | This data point is measured by performing a statistical analysis of race and gender pay gaps by controlling
for factors such as job, seniority, and geography. These gaps are often smaller and easier to remedy than median pay gaps. |
| 2. | There is a 4.9% adjusted gender pay gap in the United States.12 |
___________________________
1
https://www.inc.com/marcel-schwantes/new-report-pay-transparency-may-be-key-to-keeping-your-employees-in-2021.html
2
https://www.gartner.com/en/articles/gartner-top-10-strategic-predictions-for-2023-and-beyond
3
https://clsbluesky.law.columbia.edu/2018/11/23/iss-looks-at-gender-diversity-and-company-performance/
https://www.mckinsey.com/featured-insights/diversity-and-inclusion/diversity-matters-even-more-the-case-for-holistic-impact
5
https://www.credit-suisse.com/about-us-news/en/articles/news-and-expertise/cs-gender-3000-report-2019-201910.html
6
https://www.bcg.com/publications/2018/how-diverse-leadership-teams-boost-innovation
7
https://justcapital.com/reports/just-jobs-analysis-why-pay-equity-is-still-critically-important-in-the-time-of-coronavirus/
8
https://hbr.org/2019/01/research-gender-pay-gaps-shrink-when-companies-are-required-to-disclose-them?utm_medium=email&utm_source=newsletter_daily&utm_
9
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3682949
10
https://www.refinitiv.com/content/dam/marketing/en_us/documents/gated/reports/gender-pay-gap-and-investment-strategies.pdf
11
https://www.gartner.com/en/human-resources/trends/payequity
12 https://www.glassdoor.com/research/app/uploads/sites/2/2019/03/Gender-Pay-Gap-2019-Research-Report-1.pdf
| 3. | Nike continues to face public scrutiny for alleged gender discrimination and unfair pay. |
| a. | Over the last several years, Nike has faced allegations of gender discrimination and unfair pay. In 2018, The Wall Street Journal
reported that many Nike employees had raised issues of “pay disparities and gender imbalances at the highest ranks of Nike.”13
An ongoing gender discrimination lawsuit, first filed against Nike in 2018, alleges “a culture of unequal compensation and sexual
harassment.”14 Additionally, in February 2024 a former Nike finance manager sued
the company over alleged gender discrimination claiming that Nike has “fostered a discriminatory work environment that devalues
women, pays them less than their male counterparts, offers them lower starting salaries than their male counterparts, and denies women
promotional opportunities that are otherwise available to men with equal or fewer qualifications.”15
Given these controversies, disclosure of median pay gaps will enhance trust between Nike, its employees, and investors that the company
is fulfilling its commitment to maintaining pay equity and increasing diversity and inclusivity at all levels of the Company. |
| 4. | Median pay gap reporting provides valuable data distinct from the company’s diversity data. |
| a. | The Board contends the adoption of the proposal is unnecessary, arguing representation and statistically-adjusted data are adequate
substitutions. However, median pay gaps provide a comprehensive view as to whether minorities/women are holding as many high-paying jobs
as non-minorities/men. |
| b. | Median pay data provides a digestible data point for investors to compare progress year-over-year. This data shows us, quite literally,
how companies assign value to their employees through the roles they inhabit and the pay they receive. |
| c. | Statistically-adjusted numbers alone can be misleading if not complemented with median pay gap data. While it may be easier for companies
to narrow statistically-adjusted pay gaps with a handful of pay adjustments within certain employment categories, such adjustments may
not impact employees at-large nor improve representation across pay scales. Conversely, narrowing median pay gaps requires hiring, developing,
and promoting minorities/women into higher-paying positions across the firm. |
| 5. | Median Pay Disclosure can benchmark Nike’s progress in Diversity, Equity, and Inclusion (DEI). |
| a. | The Company describes its DEI initiatives and goals to justify its obfuscation of median pay data. While these initiatives are important,
disclosure of median pay gap data will ensure investors and employees that Nike’s DEI work is working to improve pay equity and
diverse representation. Median pay gap data will complement the Company’s efforts and allow Nike to benchmark its progress toward
DEI goals. Nike’s refusal to publish median pay gap data reflects a lack of transparency and accountability to investors and employees. |
___________________________
13
https://www.wsj.com/articles/inside-nike-women-staffers-circulated-survey-about-workplace-behavior-1521451801
14 https://www.oregonlive.com/business/2018/08/class-action_lawsuit_on_nike_w.html
15 https://www.oregonlive.com/business/2024/01/former-nike-senior-director-sues-alleging-gender-discrimination.html
16 https://static1.squarespace.com/static/5bc65db67d0c9102cca54b74/t/65f0b24549f03056f8edb5b9/1710273095112/Arjuna+Capital+-+Racial+and+Gender+Pay+Scorecard+2024.pdf
| 6. | Nike lags peers on racial and gender pay equity disclosures/commitments. |
| a. | More
companies are disclosing racial and gender median pay gaps annually, committing to an honest accounting of pay equity that will strengthen
diversity and talent retention. Of the 100 largest U.S. companies, 25 percent of the consumer companies have
committed to disclosing median pay gaps. This includes Starbucks, Lowe’s, Home Depot - and most recently Walmart.16 |
For all the reasons provided above, we strongly urge you to support
the Proposal. Pay transparency has been shown to narrow pay gaps and improve diversity at companies that disclose them, which we believe
is in the long-term best interest of shareholders.
Please contact Julia Cedarholm at juliac@arjuna-capital.com for additional
information.
Sincerely,
Natasha Lamb
Arjuna Capital
This is not a solicitation of authority to vote your proxy. Please
DO NOT send us your proxy card. Arjuna Capital is not able to vote your proxies, nor does this communication contemplate such an event.
The proponent urges shareholders to vote for Proxy Item 4 following the instruction provided on the management’s proxy mailing.
The views expressed are those of the authors and Arjuna Capital
as of the date referenced and are subject to change at any time based on market or other conditions. These views are not intended to be
a forecast of future events or a guarantee of future results. These views may not be relied upon as investment advice. The information
provided in this material should not be considered a recommendation to buy or sell any of the securities mentioned. It should not be assumed
that investments in such securities have been or will be profitable. This piece is for informational purposes and should not be construed
as a research report.
___________________________
16 https://static1.squarespace.com/static/5bc65db67d0c9102cca54b74/t/65f0b24549f03056f8edb5b9/1710273095112/Arjuna+Capital+-+Racial+and+Gender+Pay+Scorecard+2024.pdf
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