DEF 14A 1 nike2020proxy.htm DEF 14A Document

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No.    )
Filed by the Registrant  x                             Filed by a Party other than the Registrant  ¨
Check the appropriate box:
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Preliminary Proxy Statement
¨
 
Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
x
 
Definitive Proxy Statement
¨
 
Definitive Additional Materials
¨
 
Soliciting Material under §240.14a-12
NIKE, INC.
(Name of registrant as specified in its charter)
(Name of person(s) filing proxy statement, if other than the registrant)
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x
 
No fee required
¨
 
Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11
 
 
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2 NIKE, INC.


MESSAGE FROM OUR
EXECUTIVE CHAIRMAN
To Our Shareholders:
Human potential, and the power of the human spirit to come back against almost insurmountable odds drives all that we do here at NIKE. We've seen it from our athletes. From LeBron James and Tiger Woods to Michael Jordan and Serena Williams. This grounding philosophy has been, and will be necessary, in the days, months, and years ahead. Constant evolution and improvement is core to our beliefs and impacts everything from the products we create, and our impact on the communities in which we live, work and play, to our commitment to sound corporate governance. At no time is this more important than now, a time when challenges are arising at an unprecedented pace, frequency, and scale.
In fiscal 2020 we demonstrated that we remain committed to fielding the best team to guide the Company in its pursuit of long-term value for our stakeholders. We continued our evolution and refreshment of the Company’s Board of Directors, evaluating the Board’s leadership structure, aligning committee membership, welcoming new and saying fond farewell to members of our Board, while always maintaining a focus on the optimal stewardship of our Company. This has resulted in increased gender diversity, lowered average age and moderated tenure, ushering in new, fresh perspectives, experiences, and expertise to our boardroom.
During fiscal 2020, the Board executed against one of its most important duties, a CEO transition. In John Donahoe, NIKE has a leader with deep knowledge of, and affinity for, all that makes us special, and extensive understanding of the capabilities essential to our future growth. John's appointment was accompanied by thoughtful transitions in certain of our senior management ranks, ensuring continuity of leadership and a skilled executive team to guide us towards NIKE’s next phase of long-term sustainable growth under the Consumer Direct Acceleration.
As we look to our Annual Meeting of Shareholders, we are pleased to share our proxy statement with you. We have maintained the changes first presented last year, including the director skills matrix and expanded director biographies, and have completely revamped the Compensation Discussion and Analysis section of this document to better ground our shareholders and constituents in our compensation philosophy, clarify disclosure, and present a more readable document generally.
We are pleased to invite you to attend the Annual Meeting of Shareholders of NIKE, Inc. to be held virtually, on Thursday, September 17, 2020, at 10:00 A.M. Pacific Time. Whether or not you plan to attend, the prompt execution and return of your proxy card will both assure that your shares are represented at the meeting and minimize the cost of proxy solicitation. Thank you for your continued support.

Sincerely,
"Constant evolution and improvement is core to our beliefs and impacts everything from the products we create, and our impact on the communities in which we live, work and play, to our commitment to sound corporate governance."
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MARK G. PARKER, EXECUTIVE CHAIRMAN

 
July 24, 2020
 



2020 PROXY STATEMENT 1


NOTICE OF ANNUAL MEETING
OF SHAREHOLDERS
September 17, 2020
TO THE SHAREHOLDERS OF NIKE, INC.
You are cordially invited to the Annual Meeting of Shareholders of NIKE, Inc., an Oregon corporation:
DATE AND TIME:
Thursday, September 17, 2020,
at 10:00 A.M. Pacific Time
LOCATION:
This year's meeting will be a virtual Annual Meeting at www.virtualshareholdermeeting.com/NKE2020
ITEMS OF BUSINESS:
PROPOSAL
 
 
PAGE REFERENCE
1    To elect the 12 directors named in the accompanying proxy statement for the ensuing year.
Page 6
 
 
 
 
 
Class A
Will elect nine directors.
Class B
Will elect three directors.

 
 
 
 
 
Holders of Class A Stock and holders of Class B Stock will vote together as one class on all other proposals.
2    To approve executive compensation by an advisory vote.
Page 28
3    To ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm.
Page 54
4    To approve the NIKE, Inc. Stock Incentive Plan, as amended and restated.
Page 56
5    To consider a shareholder proposal regarding political contributions disclosure as described in the accompanying proxy statement, if properly presented at the meeting.
Page 62
6    To transact such other business as may properly come before the meeting.
 
Due to the public health impact of the COVID-19 pandemic and to support the well-being of our employees and shareholders, we have decided to hold this year's Annual Meeting in a virtual format only. Shareholders of record at the close of business on July 17, 2020, the record date fixed by the Board of Directors, 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/NKE2020 and enter the 16-digit control number included in your Notice Regarding the Availability of Proxy Materials, voting instructions form, or proxy card. Questions may be submitted in advance of the Annual Meeting by visiting www.proxyvote.com and entering your 16-digit control number.
By Order of the Board of Directors,
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Ann M. Miller
Vice President, Corporate Secretary, and Chief Ethics & Compliance Officer
 
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Shareholders To Be Held on September 17, 2020. The proxy statement and NIKE, Inc.’s 2020 Annual Report to Shareholders are available online at www.investorvote.com or www.proxyvote.com, for registered and beneficial owners, respectively.
 


2 NIKE, INC.


TABLE OF CONTENTS
 
 
PAGE
Virtual Meeting
Introduction
Leadership Transitions
Compensation of Our Named Executive Officers
Our Compensation Process
Other Compensation Practices
STOCK INCENTIVE PLAN
To approve the NIKE, Inc. Stock Incentive Plan, as amended and restated
Summary of the Stock Incentive Plan
SHAREHOLDER PROPOSAL
To Consider a Shareholder Proposal Regarding Political Contributions Disclosure
EXHIBIT A — NIKE, INC. STOCK INCENTIVE PLAN


2020 PROXY STATEMENT 3


PROXY STATEMENT
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 our 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.
The enclosed proxy is solicited by the Board of Directors (the "Board") of NIKE, Inc. ("NIKE" or the "Company") for use at the annual meeting of shareholders to be held on September 17, 2020, and at any adjournment thereof (the "Annual Meeting"). Our principal executive offices are located at One Bowerman Drive, Beaverton, Oregon 97005-6453. This proxy statement is first being made available to shareholders on or about August 6, 2020. Shareholders may submit a proxy to vote at the Annual Meeting by following the instructions on the Notice, online or by telephone, or (if they have received paper copies of the proxy materials) by returning a proxy card.
The Company will bear the cost of soliciting proxies. 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.
Shares that are properly voted online or by telephone or for which proxy cards are properly executed and received by the Company prior to the Annual Meeting will be voted in accordance with the instructions specified in such proxies. Where no instructions are given, shares will be voted "FOR" the election of each of the named nominees for director (Proposal 1), "FOR" the proposal regarding an advisory vote to approve executive compensation (Proposal 2), "FOR" the ratification of the appointment of PricewaterhouseCoopers LLP as independent registered public accounting firm (Proposal 3), "FOR" the approval of the NIKE, Inc. Stock Incentive Plan, as amended and restated (Proposal 4), and "AGAINST" the shareholder proposal regarding political contributions disclosure (Proposal 5).
A shareholder giving the enclosed proxy has the power to revoke it at any time before it is exercised by affirmatively electing to vote at the meeting or by delivering to Ms. Ann M. Miller, Vice President, Corporate Secretary, and Chief Ethics & Compliance Officer of NIKE, Inc., either an instrument of revocation or an executed proxy bearing a later date.
VIRTUAL MEETING
Due to the public health impact of the COVID-19 pandemic and to support the well-being of our employees and shareholders, we have decided to hold this year’s Annual Meeting in a virtual meeting format only. Shareholders of record at the close of business on July 17, 2020 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/NKE2020 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. To submit questions in advance of the Annual Meeting, visit www.proxyvote.com before 11:59 P.M. Eastern Time on September 16, 2020 and enter the 16-digit control number included in your Notice, voting instructions form, or proxy card.
VOTING SECURITIES AND VOTE REQUIRED
Holders of record of NIKE’s Class A Common Stock ("Class A Stock") and holders of record of NIKE’s Class B Common Stock ("Class B Stock" and together with the Class A Stock, the "Common Stock") at the close of business on July 17, 2020 will be entitled to vote at the Annual Meeting. On that date, 315,017,252 shares of Class A Stock and 1,244,871,297 shares of Class B Stock were issued and outstanding. Neither class of Common Stock has cumulative voting rights.
Each share of Class A Stock and each share of Class B Stock is entitled to one vote on every matter submitted to the applicable shareholders at the Annual Meeting.
A majority of the votes entitled to be cast on Proposal 1, the election of directors, 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 action on Proposal 1. The holders of Class A Stock and the holders of Class B Stock will vote separately on Proposal 1. Holders of Class B Stock are currently entitled to elect 25 percent of the Board, rounded up to the next whole number. Holders of Class A Stock are currently entitled to elect the remaining directors. Under this formula, holders of Class B Stock, voting separately, will elect three directors, and holders of Class A Stock, voting separately, will elect nine directors. Under Oregon Law and our Bylaws, if a quorum of each class of Common Stock is present at the meeting, the three director nominees who receive the greatest number of votes cast by holders


4 NIKE, INC.


of Class B Stock and the nine director nominees who receive the greatest number of votes cast by holders of Class A Stock will be elected directors.
A majority of the votes entitled to be cast on Proposals 2, 3, 4, and 5 by both Class A Stock and Class B Stock together constitutes a quorum for action on those proposals. Holders of Class A Stock and holders of Class B Stock will vote together as one class on Proposals 2, 3, 4, and 5. If a quorum is present at the meeting, Proposals 2, 3, 4, and 5 will be approved if the votes cast in favor of the proposal exceed the votes cast against the proposal.
Abstentions and broker non-votes are counted for purposes of determining whether a quorum exists. Abstentions and broker non-votes are not included as votes cast and will not affect the outcome of any of the proposals. 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.


2020 PROXY STATEMENT 5


CORPORATE GOVERNANCE
 
 
 
 
PROPOSAL 1
ELECTION OF DIRECTORS
 
A Board of 12 directors will be elected at the Annual Meeting. Directors will hold office until the next annual meeting of shareholders or until their successors are elected and qualified. With the exception of Ms. Thasunda B. Duckett, all of the nominees were elected at the 2019 annual meeting of shareholders. Ms. Duckett was recommended to the Corporate Responsibility, Sustainability & Governance Committee for consideration by a third-party director search firm.
Mr. Alan B. Graf, Jr., Mr. Peter B. Henry, and Ms. Michelle A. Peluso are nominated by the Board of Directors for election by the holders of Class B Stock. The other nine nominees are nominated by the Board for election by the holders of Class A Stock.
Under Oregon law and our Bylaws, if a quorum of each class of shareholders is present at the Annual Meeting, the nine director nominees who receive the greatest number of votes cast by holders of Class A Stock and the three director nominees who receive the greatest number of votes cast by holders of Class B Stock will be elected directors. Abstentions and broker non-votes will have no effect on the results of the vote. Unless otherwise instructed, proxy holders will vote the proxies they receive for the nominees listed below. If any nominee becomes unable to serve, the holders of the proxies may, in their discretion, vote the shares for a substitute nominee or nominees designated by the Board.
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 his or her election than votes "for" such election shall tender his or her 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. The Board will publicly disclose its decision within 90 days of the certification of the election results.
Background information on the nominees as of July 24, 2020, including some of the attributes that led to their selection, appears below. The Corporate Responsibility, Sustainability & Governance Committee has determined that each director meets the qualification standards described below under "Individual Board Skills Matrix—Director Nominations". In addition, the Board firmly believes that the experience, attributes, and skills of any single director nominee should not be viewed in isolation, but rather in the context of the experience, attributes, and skills that all director nominees bring to the Board as a whole, each of which contributes to the function of an effective Board.
 
BOARD RECOMMENDATION
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The Board of Directors recommends that the Class A Shareholders vote FOR the election of nominees to the Board of Directors
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The Board of Directors recommends that the Class B Shareholders vote FOR the election of nominees to the Board of Directors


6 NIKE, INC.


NIKE, INC. BOARD OF DIRECTORS
BOARD OVERVIEW
Our Board is currently comprised of twelve individuals selected on the basis of numerous criteria, including experience and achievements; fields of significant knowledge; good character; sound judgment; and diversity. We view the effectiveness of our Board both through an individual and collective lens and believe that our Board is optimized to support and guide the Company.
GENDER DIVERSITY
GENDER/ETHNIC DIVERSITY
AGE
TENURE
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BOARD SKILLS, EXPERIENCES, AND QUALIFICATIONS
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DIVERSITY 6/12
Gender or ethnic diversity that adds a range of perspectives and expands the Board’s understanding of the needs and viewpoints of consumers, employees, and other stakeholders worldwide.
FINANCIAL EXPERTISE 10/12
Financial expertise assists our Board in overseeing our financial statements, capital structure, and internal controls.
CEO EXPERIENCE 7/12
CEO experience brings leadership qualifications and skills that help our Board to capably advise, support, and oversee our management team, including regarding our strategy to drive long-term value.
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INTERNATIONAL 9/12
International exposure yields an understanding of diverse business environments, economic conditions, and cultural perspectives that informs our global business and strategy and enhances oversight of our multinational operations.
DIGITAL/TECHNOLOGY 6/12
Technology experience helps our Board oversee cybersecurity and advise our management team as we seek to enhance the consumer experience and further develop our multi-channel strategy.
RETAIL INDUSTRY 5/12
Retail experience brings a deep understanding of factors affecting our industry, operations, business needs, and strategic goals.
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MEDIA 2/12
Media experience provides the Board with insight about connecting with consumers and other stakeholders in a timely and impactful manner.
ACADEMIA 1/12
Academia provides organizational management experience and knowledge of current issues in academia and thought leadership.
HR/TALENT MANAGEMENT 6/12
HR and talent management experience assists our Board in overseeing executive compensation, succession planning, and employee engagement.
GOVERNANCE 8/12
Public company board experience provides insight into new and best practices which informs our commitment to excellence in corporate governance.
CORPORATE GOVERNANCE HIGHLIGHTS
ü    9 out of 12 directors are independent
ü    Separate Chairman, CEO, and Lead Independent Director positions with clearly defined roles
ü    Refreshed Board and committee structure, with 4 new independent directors added in last three fiscal years
ü    Retirement policy generally requires that directors do not stand for election after reaching the age of 72


2020 PROXY STATEMENT 7


NOMINEES FOR ELECTION BY CLASS A SHAREHOLDERS
CATHLEEN A. BENKO
AGE
DIRECTOR SINCE
COMMITTEE
OTHER CURRENT
PUBLIC DIRECTORSHIPS
FAVORITE NIKE PRODUCT(S)
62
2018
Compensation
None
Converse All Star Platform Low Top and Nike AeroLayer Jacket
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SKILLS, EXPERIENCES AND QUALIFICATIONS
 
 
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DIVERSITY
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DIGITAL/TECHNOLOGY
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HR/TALENT MANAGEMENT
 
 
 
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INTERNATIONAL
 
 
 
 
 
 
 
 
Ms. Benko is a former Vice Chairman and Managing Principal of Deloitte LLP ("Deloitte"), an organization that, through its subsidiaries and network of member firms, provides audit, consulting, tax, and advisory services to clients globally. During her nearly 30-year career with Deloitte, Ms. Benko held many leadership roles, several concurrent with her appointment as Vice Chairman and Managing Principal in 2011.
From 2015 to 2018, Ms. Benko served as Senior Partner working within the firm's "Digital Giants" practice where she was the senior advisory partner for several digital-native companies.
From 2010 to 2014, Ms. Benko served as Chief Digital, Brand, and Communications Officer.
Previous to her role as Chief Digital, Brand, and Communications Officer, Ms. Benko held multiple technology and talent management roles, including serving as the company’s first Vice Chairman and Chief Talent Officer from 2006 to 2010, its Chief Inclusion Officer from 2008 to 2010, and as Managing Principal, Initiative for the Retention and Advancement of Women, from 2003 to 2009.
Ms. Benko led Deloitte’s technology sector from 2003 to 2007 and was previously Deloitte’s first Global e-Business Leader, a position she held from 1998 to 2002.
Ms. Benko is chair of a Harvard Business School Advisory Council and a member of the Board of nonprofit organization American Corporate Partners.


8 NIKE, INC.


ELIZABETH J. COMSTOCK
AGE
DIRECTOR SINCE
COMMITTEE
OTHER CURRENT
PUBLIC DIRECTORSHIPS
FAVORITE NIKE PRODUCT(S)
59
2011
Compensation
None
Nike Air Force 1 and Nike Air Satin Jacket
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SKILLS, EXPERIENCES AND QUALIFICATIONS
 
 
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DIVERSITY
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DIGITAL/TECHNOLOGY
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MEDIA
 
 
 
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INTERNATIONAL
 
 
 
 
 
 
 
Ms. Comstock is the former Vice Chair of General Electric Company ("GE"). She led GE’s efforts to accelerate new growth and operated GE Business Innovations, which included Current, GE Lighting, GE Ventures & Licensing and GE sales, marketing and communications.
At GE, Ms. Comstock was appointed:
Senior Vice President, Chief Marketing and Commercial Officer in 2008,
President, NBC Universal Integrated Media in 2006,
Corporate Vice President and Chief Marketing Officer in 2003,
Vice President of Corporate Communications in 1998,
Senior Vice President, NBC Corporate Communications in 1996, and
Vice President, Communications, NBC News Communications in 1994.
Prior to joining GE in 1994, Ms. Comstock held a succession of positions at NBC, CBS, and Turner Broadcasting.
Ms. Comstock is a trustee of The National Geographic Society and Visiting Scholar at the Columbia University Center for Science and Society.


2020 PROXY STATEMENT 9


JOHN G. CONNORS
AGE
DIRECTOR SINCE
COMMITTEE
OTHER CURRENT
PUBLIC DIRECTORSHIPS
FAVORITE NIKE PRODUCT(S)
61
2005
Audit & Finance
Splunk, Inc.
Nike React and Nike SFB Boots
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SKILLS, EXPERIENCES AND QUALIFICATIONS
 
 
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FINANCIAL EXPERTISE
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DIGITAL/TECHNOLOGY
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GOVERNANCE
 
 
 
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INTERNATIONAL
 
 
 
 
 
 
 
Mr. Connors is a partner in Ignition Partners LLC, a Seattle-area venture capital firm.
Mr. Connors served as Senior Vice President and Chief Financial Officer of Microsoft Corporation ("Microsoft") from December 1999 to May 2005.
Mr. Connors joined Microsoft in 1989 and held various management positions, including:
Vice President, Worldwide Enterprise Group in 1999,
Chief Information Officer from 1996 to 1999, and
Corporate Controller from 1994 to 1996.
Mr. Connors is a member of the Board of Directors of Splunk, Inc. In addition to this public company board service, he is also a member of the Board of Directors of privately held companies Chef, Inc., ICERTIS, Inc., Maka Autonomous Robotic Systems Inc., Tempered Networks Inc., LiveStories Inc., and KenSci Inc., and is on the Board of the Washington Policy Center.


10 NIKE, INC.


TIMOTHY D. COOK, LEAD INDEPENDENT DIRECTOR
AGE
DIRECTOR SINCE
COMMITTEE
OTHER CURRENT
PUBLIC DIRECTORSHIPS
FAVORITE NIKE PRODUCT(S)
59
2005
Compensation, Chair
Apple Inc.
Nike Epic React and Nike Flex
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SKILLS, EXPERIENCES AND QUALIFICATIONS
 
 
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FINANCIAL EXPERTISE
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DIGITAL/TECHNOLOGY
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HR/TALENT MANAGEMENT
 
 
 
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CEO EXPERIENCE
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RETAIL INDUSTRY
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GOVERNANCE
 
 
 
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INTERNATIONAL
 
 
 
 
 
 
 
Mr. Cook is the Company’s Lead Independent Director and is the Chief Executive Officer of Apple Inc. ("Apple").
Mr. Cook joined Apple in March 1998 as Senior Vice President of Worldwide Operations and also served as its Executive Vice President, Worldwide Sales and Operations and Chief Operating Officer.
Mr. Cook was Vice President, Corporate Materials for Compaq Computer Corporation from 1997 to 1998.
Previous to his work at Compaq, Mr. Cook served in the positions of Senior Vice President Fulfillment and Chief Operating Officer of the Reseller Division at Intelligent Electronics from 1994 to 1997.
Mr. Cook also worked for International Business Machines Corporation from 1983 to 1994, most recently as Director of North American Fulfillment.
Mr. Cook is a member of the Board of Directors of Apple. In addition to this public company board service, he is also a member of the Board of Directors of the National Football Foundation and Duke University Board of Trustees.


2020 PROXY STATEMENT 11


JOHN J. DONAHOE II
AGE
DIRECTOR SINCE
COMMITTEE
OTHER CURRENT
PUBLIC DIRECTORSHIPS
FAVORITE NIKE PRODUCT(S)
60
2014
  Executive
PayPal Holdings, Inc.
Nike Phantom Epic React and Jordan Jumpman Hoodie
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SKILLS, EXPERIENCES AND QUALIFICATIONS
 
 
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FINANCIAL EXPERTISE
nike2019proxyimage19.jpg
DIGITAL/TECHNOLOGY
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HR/TALENT MANAGEMENT
 
 
 
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CEO EXPERIENCE
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RETAIL INDUSTRY
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GOVERNANCE
 
 
 
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INTERNATIONAL
 
 
 
 
 
 
 
Mr. Donahoe is President and Chief Executive Officer of NIKE, Inc. and has been a director since 2014.
From 2017 to 2019, Mr. Donahoe served as President and Chief Executive Officer of ServiceNow, Inc. ("ServiceNow"), provider of enterprise cloud computing services for global enterprises.
From 2008 to 2015, Mr. Donahoe served as President and Chief Executive Officer of eBay, Inc. ("eBay"), provider of the global eBay.com online marketplace and PayPal digital payments platform.
Mr. Donahoe joined eBay in 2005 as President of eBay Marketplaces, responsible for eBay’s global e-Commerce businesses.
Prior to joining eBay, Mr. Donahoe was the Chief Executive Officer and Worldwide Managing Director of Bain & Company from 1999 to 2005, and a Managing Director from 1992 to 1999.
Mr. Donahoe is Chairman and a member of the Board of Directors of PayPal Holdings, Inc. In addition to this public company board service, he also serves on the Board of Trustees for The Bridgespan Group. Mr. Donahoe served on the Board of Directors of Intel Corporation from March 2009 to May 2017, and ServiceNow from March 2017 to June 2020.


12 NIKE, INC.


THASUNDA B. DUCKETT
AGE
DIRECTOR SINCE
COMMITTEE
OTHER CURRENT
PUBLIC DIRECTORSHIPS
FAVORITE NIKE PRODUCT(S)
47
2019
Corporate Responsibility, Sustainability & Governance
None
Air Jordans, Nike Air Force 1, and Nike Air Max 270
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SKILLS, EXPERIENCES AND QUALIFICATIONS
 
 
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DIVERSITY
nike2019proxyimage17.jpg
FINANCIAL EXPERTISE
nike2019proxyimage24.jpg
CEO EXPERIENCE
 
 
 
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RETAIL INDUSTRY
nike2019proxyimage18.jpg
HR/TALENT MANAGEMENT
 
 
 
 
 
 

Ms. Duckett is the Chief Executive Officer of Chase Consumer Banking at JPMorgan Chase & Co. ("JPMorgan Chase").
From 2013 to 2016, Ms. Duckett served as the Chief Executive Officer of Chase Auto Finance.
From 2004 to 2013, Ms. Duckett held multiple management and consumer lending roles with JPMorgan Chase.
Prior to joining JPMorgan Chase, Ms. Duckett was Director of Emerging Markets at the Federal National Mortgage Association, or Fannie Mae.
Ms. Duckett is chair of the Otis and Rosie Brown Foundation and a member of the Board of Directors of the Children’s Learning Center of Fairfax County. Additionally she is on the Board of The Robert F. Kennedy Human Rights Foundation.



2020 PROXY STATEMENT 13


TRAVIS A. KNIGHT
AGE
DIRECTOR SINCE
COMMITTEE
OTHER CURRENT
PUBLIC DIRECTORSHIPS
FAVORITE NIKE PRODUCT(S)
46
2015
Executive
None
Nike Air Zoom Pegasus
bio_knight.jpg
SKILLS, EXPERIENCES AND QUALIFICATIONS
 
 
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FINANCIAL EXPERTISE
nike2019proxyimage24.jpg
CEO EXPERIENCE
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MEDIA
 
 
 
 
 
 
 
 
 
 
 
 
Mr. Knight is the President and Chief Executive Officer of the animation studio, LAIKA, LLC ("LAIKA"), which specializes in feature-length films.
Mr. Knight has been involved in all principal creative and business decisions at LAIKA since its founding in 2003, serving in successive management positions as Lead Animator, Vice President of Animation, and then as President and Chief Executive Officer in 2009.
Mr. Knight was Producer and Director of the feature film Kubo and the Two Strings (2017) which was nominated for an Academy Award and winner of the BAFTA award for Best Animated Film.
Mr. Knight has served as Producer and Lead Animator on Academy Award-nominated feature-length films The Boxtrolls (2014) and ParaNorman (2012), for which he won an Annie Award for Outstanding Achievement in Character Animation, and Lead Animator for Coraline (2009).
Prior to his work at LAIKA, Mr. Knight held various animation positions at Will Vinton Studios from 1998 to 2002, and as a stop-motion animator for television series, commercials, and network promotions. He has been recognized for his work on the Emmy Award-winning stop-motion animated television series The PJs.
Mr. Knight serves on the Board of Directors of LAIKA. He is the son of NIKE’s co-founder, Mr. Philip Knight, who currently serves as Chairman Emeritus. In addition to his skills and qualifications described above, Mr. Travis Knight was selected to serve on the Board because he has a significant role in the management of the Class A Stock owned by Swoosh, LLC, strengthening the alignment of the Board with the interests of NIKE shareholders.


14 NIKE, INC.


MARK G. PARKER, EXECUTIVE CHAIRMAN OF THE BOARD
AGE
DIRECTOR SINCE
COMMITTEE
OTHER CURRENT
PUBLIC DIRECTORSHIPS
FAVORITE NIKE PRODUCT
64
2006
Executive, Chair
The Walt Disney Company
Still can't pick just one
bio_parker.jpg
SKILLS, EXPERIENCES AND QUALIFICATIONS
 
 
nike2019proxyimage17.jpg
FINANCIAL EXPERTISE
nike2019proxyimage25.jpg
INTERNATIONAL
nike2019proxyimage18.jpg
HR/TALENT MANAGEMENT
 
 
 
nike2019proxyimage24.jpg
CEO EXPERIENCE
nike2019proxyimage27.jpg
RETAIL INDUSTRY
nike2019proxyimage20.jpg
GOVERNANCE
 
 
 
Mr. Parker is Executive Chairman of the Board of Directors of the Company. He served as President and Chief Executive Officer of the Company from 2006 to January 2020.
Mr. Parker has been employed by NIKE since 1979 with primary responsibilities in product research, design and development, marketing, and brand management.
Mr. Parker was appointed:
President and Chief Executive Officer in 2006,
President of the NIKE Brand in 2001,
Vice President of Global Footwear in 1998,
General Manager in 1993,
Corporate Vice President in 1989, and
Divisional Vice President in charge of product development in 1987.
Mr. Parker is a member of the Board of Directors of The Walt Disney Company. In addition to his skills and qualifications described above, Mr. Parker was selected to serve on the Board because the experience gained while serving as the Company's Chief Executive Officer makes his position as Executive Chairman of the Board instrumental.


2020 PROXY STATEMENT 15


JOHN W. ROGERS, JR.
AGE
DIRECTOR SINCE
COMMITTEE
OTHER CURRENT
PUBLIC DIRECTORSHIPS
FAVORITE NIKE PRODUCT(S)
62
2018
Corporate Responsibility,
Sustainability & Governance
McDonald’s Corporation and The New York Times Company
Nike KD and Nike LeBron Basketball Shoes
bio_rogers.jpg
SKILLS, EXPERIENCES AND QUALIFICATIONS
 
 
nike2019proxyimage21.jpg
DIVERSITY
nike2019proxyimage24.jpg
CEO EXPERIENCE
nike2019proxyimage20.jpg
GOVERNANCE
 
 
 
nike2019proxyimage17.jpg
FINANCIAL EXPERTISE
 
 
 
 
 
 
 
 
Mr. Rogers is Chairman, Co-CEO and Chief Investment Officer of Ariel Investments, LLC, a privately-held money management firm he founded in 1983, which serves individual and institutional investors through its mutual funds and separate accounts.
In 2008, Mr. Rogers was awarded Princeton University’s highest honor, the Woodrow Wilson Award, presented each year to the alumnus whose career embodies a commitment to national service.
Mr. Rogers served as co-chair for the Presidential Inaugural Committee 2009, and more recently, joined the Barack Obama Foundation’s Board of Directors.
Mr. Rogers is a member of the Board of Directors of McDonald’s Corporation and The New York Times Company. In addition to this public company board service, he also serves as trustee of the University of Chicago, the Robert F. Kennedy Center for Justice and Human Rights, the National Association of Basketball Coaches (NABC) Foundation, Inc., and is a life trustee of the Chicago Symphony Orchestra. Mr. Rogers served on the Board of Directors of Exelon Corporation from October 2000 until April 2019.

BOARD RECOMMENDATION
iconcheckmark.jpg
The Board of Directors recommends that the Class A Shareholders vote FOR the election of the nominees above to the Board of Directors.


16 NIKE, INC.


NOMINEES FOR ELECTION BY CLASS B SHAREHOLDERS
ALAN B. GRAF, JR.
AGE
DIRECTOR SINCE
COMMITTEE
OTHER CURRENT
PUBLIC DIRECTORSHIPS
FAVORITE NIKE PRODUCT(S)
66
2002
Audit & Finance, Chair
Mid-America Apartment Communities, Inc.
Nike Air Max 270, Nike Air Max, and Nike Polos
bio_graf.jpg
SKILLS, EXPERIENCES AND QUALIFICATIONS
 
 
nike2019proxyimage17.jpg
FINANCIAL EXPERTISE
nike2019proxyimage25.jpg
INTERNATIONAL
nike2019proxyimage20.jpg
GOVERNANCE
 
 
 
 
 
 
 
 
 
 
 
 
 
Mr. Graf is the Executive Vice President and Chief Financial Officer of FedEx Corporation ("FedEx"), a position he has held since 1998, and is a member of FedEx’s Executive Committee.
Mr. Graf joined FedEx in 1980 and was Senior Vice President and Chief Financial Officer for FedEx Express, FedEx’s predecessor, from 1991 to 1998.
Mr. Graf previously served on the Board of Directors of Kimball International Inc., Storage USA, Inc., and Arkwright Mutual Insurance Co.
Mr. Graf is a member of the Board of Directors of Mid-America Apartment Communities, Inc. In addition to this public company board service, he is also a director of the Indiana University Foundation and a Trustee of the University of Memphis. While Mr. Mr. Graf has announced his intention to retire from his position as CFO of FedEx, NIKE stands behind his seat on our Board and believes that he has provided, and will continue to provide, exemplary guidance and advice, and gives the necessary attention and dedication to his role as a Board member and as a committee chair.


2020 PROXY STATEMENT 17


PETER B. HENRY
AGE
DIRECTOR SINCE
COMMITTEE
OTHER CURRENT
PUBLIC DIRECTORSHIPS
FAVORITE NIKE PRODUCT(S)
50
2018
Audit & Finance
Citigroup Inc.
Nike Epic React
bio_henry.jpg
SKILLS, EXPERIENCES AND QUALIFICATIONS
 
 
nike2019proxyimage21.jpg
DIVERSITY
nike2019proxyimage25.jpg
INTERNATIONAL
nike2019proxyimage20.jpg
GOVERNANCE
 
 
 
nike2019proxyimage17.jpg
FINANCIAL EXPERTISE
nike2019proxyimage33.jpg
ACADEMIA
 
 
 
 
 
 
Mr. Henry is Dean Emeritus of New York University’s Leonard N. Stern School of Business and the William R. Berkley Professor of Economics and Finance.
Mr. Henry assumed the Deanship of the Stern School of Business in January 2010 and served through December 2017.
Prior to joining Stern, Mr. Henry was the Konosuke Matsushita Professor of International Economics at the Stanford University Graduate School of Business.
In June 2009, President Obama appointed Mr. Henry to the President’s Commission on White House Fellowships.
In 2008, Mr. Henry led Barack Obama’s Presidential Transition Team in its review of international lending agencies such as the IMF and the World Bank.
Mr. Henry is a member of the Board of Directors of Citigroup Inc. In addition to this public company board service, he also serves on the Board of Directors of the National Bureau of Economic Research and the Economic Club of New York and serves on the Advisory Board for Protiviti. Mr. Henry is a member of the Council of Foreign Relations and the Economic Advisory Panel of the Federal Reserve Bank of New York. Mr. Henry served on the Board of Directors of General Electric from July 2016 until April 2018 and Kraft Foods Group, Inc. and its predecessor, Kraft Foods Inc., from May 2011 until July 2015.


18 NIKE, INC.


MICHELLE A. PELUSO
AGE
DIRECTOR SINCE
COMMITTEE
OTHER CURRENT
PUBLIC DIRECTORSHIPS
FAVORITE NIKE PRODUCT(S)
48
2014
Corporate Responsibility,
Sustainability & Governance, Chair
None
Nike React Infinity Run, Nike Air Satin Jacket, and Nike Air Max Tailwind IV
bio_peluso.jpg
SKILLS, EXPERIENCES AND QUALIFICATIONS
 
 
nike2019proxyimage34.jpg
DIVERSITY
nike2019proxyimage25.jpg
INTERNATIONAL
nike2019proxyimage18.jpg
HR/TALENT MANAGEMENT
 
 
 
nike2019proxyimage17.jpg
FINANCIAL EXPERTISE
nike2019proxyimage19.jpg
DIGITAL/TECHNOLOGY
nike2019proxyimage20.jpg
GOVERNANCE
 
 
 
nike2019proxyimage24.jpg
CEO EXPERIENCE
nike2019proxyimage27.jpg
RETAIL INDUSTRY
 
 
 
 
 
Ms. Peluso is Senior Vice President Digital Sales and Chief Marketing Officer at IBM.
Ms. Peluso served as Chief Executive Officer of online shopping destination Gilt Groupe, Inc. ("Gilt") from 2013 until its sale to Hudson’s Bay Company in February 2016, and was on Gilt’s Board of Directors from 2009 to 2016.
Prior to joining Gilt in 2013, Ms. Peluso served as Global Consumer Chief Marketing and Internet Officer of Citigroup Inc. from 2009 to 2013.
From 2002 to 2009, Ms. Peluso held senior management positions at Travelocity.com LP ("Travelocity"), being appointed Chief Operating Officer in 2003, and President and Chief Executive Officer in December 2003.
Prior to joining Travelocity, in 1999 Ms. Peluso founded Site59, an online travel site, serving as its Chief Executive Officer until its acquisition by Travelocity in 2002.
Ms. Peluso is a director of the nonprofit TechnoServe.
BOARD RECOMMENDATION
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The Board of Directors recommends that the Class B Shareholders vote FOR the election of the nominees above to the Board of Directors.


2020 PROXY STATEMENT 19


INDIVIDUAL BOARD SKILLS MATRIX
EXPERIENCE, EXPERTISE, OR ATTRIBUTES
BENKO
COMSTOCK
CONNORS
COOK
DONAHOE
DUCKETT
GRAF
HENRY
KNIGHT
PARKER
PELUSO
ROGERS
nike2019proxyimage51.jpg
DIVERSITY
Gender or ethnic diversity that adds a range of perspectives and expands the Board’s understanding of the needs and viewpoints of consumers, employees, and other stakeholders worldwide.
ü
ü
 
 
 
ü
 
ü
 
 
ü
ü
nike2019proxyimage45.jpg
FINANCIAL EXPERTISE
Financial expertise assists our Board in overseeing our financial statements, capital structure, and internal controls.
 
 
ü
ü
ü
ü
ü
ü
ü
ü
ü
ü
nike2019proxyimage46.jpg
CEO EXPERIENCE
CEO experience brings leadership qualifications and skills that help our Board to capably advise, support, and oversee our management team, including regarding our strategy to drive long-term value.
 
 
 
ü
ü
ü
 
 
ü
ü
ü
ü
nike2019proxyimage47.jpg
INTERNATIONAL
International exposure yields an understanding of diverse business environments, economic conditions, and cultural perspectives that informs our global business and strategy and enhances oversight of our multinational operations.
ü
ü
ü
ü
ü
 
ü
ü
 
ü
ü
 
nike2019proxyimage48.jpg
DIGITAL/TECHNOLOGY
Technology experience helps our Board oversee cybersecurity and advise our management team as we seek to enhance the consumer experience and further develop our multi-channel strategy.
ü
ü
ü
ü
ü
 
 
 
 
 
ü
 
nike2019proxyimage49.jpg
RETAIL INDUSTRY
Retail experience brings a deep understanding of factors affecting our industry, operations, business needs, and strategic goals.
 
 
 
ü
ü
ü
 
 
 
ü
ü
 
nike2019proxyimage50.jpg
MEDIA
Media experience provides the Board with insight about connecting with consumers and other stakeholders in a timely and impactful manner.
 
ü
 
 
 
 
 
 
ü
 
 
 
nike2019proxyimage52.jpg
ACADEMIA
Academia provides organizational management experience and knowledge of current issues in academia and thought leadership.
 
 
 
 
 
 
 
ü
 
 
 
 
nike2019proxyimage53.jpg
HR/TALENT MANAGEMENT
HR and talent management experience assists our Board in overseeing executive compensation, succession planning, and employee engagement.
ü
 
 
ü
ü
ü
 
 
 
ü
ü
 
nike2019proxyimage54.jpg
GOVERNANCE
Public company board experience provides insight into new and best practices which informs our commitment to excellence in corporate governance.
 
 
ü
ü
ü
 
ü
ü
 
ü
ü
ü


20 NIKE, INC.


DIRECTOR NOMINATIONS
The Corporate Responsibility, Sustainability & Governance Committee identifies potential director candidates through a variety of means, including recommendations from members of the Corporate Responsibility, Sustainability & Governance Committee or the Board, suggestions from Company management, and shareholder recommendations. The committee also may, in its discretion, engage director search firms to identify candidates. Shareholders may recommend director candidates for consideration by the Corporate Responsibility, Sustainability & Governance Committee by submitting a written recommendation to the committee, c/o Ann M. Miller, Vice President, Corporate Secretary, and Chief Ethics & Compliance Officer, NIKE, Inc., One Bowerman Drive, Beaverton, Oregon 97005-6453. The recommendation should include the candidate’s name, age, qualifications (including principal occupation and employment history), and written consent to be named as a nominee in the Company’s proxy statement and to serve as a director, if elected.
The Board of Directors has adopted qualification standards for the selection of non-management nominees for director, which can be found at our corporate website: http://investors.nike.com. As provided in these standards and the Company’s corporate governance guidelines, nominees for director are selected on the basis of, among other things, distinguished business experience or other non-business achievements; education; significant knowledge of international business, finance, marketing, technology, human resources, diversity & inclusion, law, or other fields which are complementary to, and balance the knowledge of, other Board members; a desire to represent the diverse interests of all stakeholders; independence; good character; ethics; sound judgment; diversity; and ability to devote substantial time to discharge Board responsibilities.
The Corporate Responsibility, Sustainability & Governance Committee identifies qualified potential candidates without regard to their age, gender, race, national origin, sexual orientation, or religion. While the Board has no policy regarding Board member diversity, the Corporate Responsibility, Sustainability & Governance Committee considers and discusses diversity in selecting nominees for director and in the re-nomination of an incumbent director. The committee views diversity broadly to include, among other things, differences in backgrounds, qualifications, experiences, viewpoint, geographic location, education, skills and expertise (including financial, accounting, compliance, corporate social responsibility, public policy, cybersecurity, or other expertise relevant to service on the Board), professional and industry experience, and personal characteristics (including gender, ethnicity/race, and sexual orientation). The Board believes that a variety and balance of perspectives on the Board results in more thoughtful and robust deliberations, and ultimately, better decisions.
In considering the re-nomination of an incumbent director, the Corporate Responsibility, Sustainability & Governance Committee reviews the director’s overall service to the Company during his or her term, including the number of meetings attended, level of participation, and quality of performance, as well as any special skills, experience, or diversity that such director brings to the Board. All potential new director candidates, whether recommended by shareholders or identified by other means, are initially screened by the Chair of the Corporate Responsibility, Sustainability & Governance Committee, who may seek additional information about the background and qualifications of the candidate, and who may determine that a candidate does not have qualifications that merit further consideration by the full committee. With respect to new director candidates who pass the initial screening, the Corporate Responsibility, Sustainability & Governance Committee meets to discuss and consider each candidate’s qualifications and potential contributions to the Board, and determines by majority vote whether to recommend such candidates to the Board. The final decision to either appoint a candidate to fill a vacancy between annual meetings or include a candidate on the slate of nominees proposed at an annual meeting is made by the Board.
It is the general policy of the Board that directors will not stand for re‑election after reaching the age of 72.
DIRECTOR INDEPENDENCE
Pursuant to New York Stock Exchange ("NYSE") listing rules, in order for a director to qualify as "independent", the Board of Directors must affirmatively determine that the director has no material relationship with the Company that would impair the director’s independence. The Board affirmatively determined that commercial or charitable relationships below the following thresholds will not be considered material relationships that impair a director’s independence: (i) if a NIKE director or immediate family member is an executive officer of another company that does business with NIKE and the annual sales to, or purchases from, NIKE are less than one percent of the annual revenues of the other company; and (ii) if a NIKE director or immediate family member serves as an officer, director, or trustee of a charitable organization, and NIKE’s contributions to the organization are less than one percent of that organization’s total annual charitable receipts. After applying this categorical standard and the applicable NYSE independence standards, the Board has determined that the following directors who served during fiscal 2020 — Cathleen A. Benko, Elizabeth J. Comstock, John G. Connors, Timothy D. Cook, Thasunda B. Duckett, Alan B. Graf, Jr., Peter B. Henry, John C. Lechleiter, Michelle A. Peluso, and John W. Rogers, Jr. — have no material relationship with the Company and, therefore, are independent. Messrs. John J. Donahoe II, Travis A. Knight, and Mark G. Parker were not independent pursuant to NYSE rules. Messrs. Donahoe and Parker were not independent pursuant to NYSE rules because they were employed by the Company during fiscal 2020. Mr. Knight was not independent pursuant to NYSE rules because he is the son of NIKE’s co-founder and former Chairman of the Board, Mr. Philip H. Knight, who received compensation in excess of the


2020 PROXY STATEMENT 21


threshold set forth in applicable NYSE rules (the "NYSE threshold") for his position as Chairman Emeritus. The compensation paid to Mr. Philip H. Knight is described in the section below titled "Stock Ownership Information—Transactions with Related Persons". Mr. John R. Thompson, Jr., former head basketball coach at Georgetown University, was determined to be independent from September 1, 2019 until his retirement from the Board on May 31, 2020. Effective June 1, 2020, the Company and Mr. Thompson entered into a consulting agreement the terms of which are described in the section below titled "Stock Ownership Information—Transactions with Related Persons".
BOARD STRUCTURE AND RESPONSIBILITIES
The Board is currently composed of nine independent directors and three directors who are not independent under the NYSE listing rules. During fiscal 2020, there were six meetings of the Board and all of our currently serving directors attended at least 75 percent of the total number of meetings of the Board and committees on which he or she served. Mr. Thompson attended less than 75 percent of such meetings. The Company encourages all directors to attend each annual meeting of shareholders. With the exception of Mr. Thompson, all directors serving at the time of the 2019 annual meeting attended the 2019 annual meeting.
BOARD LEADERSHIP STRUCTURE
NIKE’s governing documents provide the Board with flexibility to select the appropriate leadership structure of the Company. In determining the leadership structure, the Board considers many factors, including the specific needs of the business, fulfilling the duties of the Board, and the best interests of the Company’s shareholders. Effective January 2020, the Company separated the position of Chairman of the Board from the position of President and CEO, although this is not a permanent policy of the Board. The Executive Chairman, Mr. Mark G. Parker, presides over meetings of the Board of Directors and shareholders. The President and CEO, Mr. John J. Donahoe II, appointed to his position effective January 2020, is in charge of the general supervision, direction, and control of the business and affairs of the Company, subject to the overall direction and supervision of the Board and its committees.
Given the particular experience and tenure of Messrs. Parker and Donahoe, the Board believes this leadership structure is appropriate for the Company because it separates the leadership of the Board from the duties of day-to-day leadership of the Company. This structure permits Mr. Donahoe to primarily focus his time and attention on the business, while Mr. Parker directs his attention to the broad strategic issues considered by the Board of Directors. This structure works particularly well given the talent, experience and professional relationship of Messrs. Donahoe and Parker established during Mr. Donahoe's service on the Board beginning in 2014.
In 2016, the Corporate Responsibility, Sustainability & Governance Committee established the position of lead independent director to ensure strong independent leadership of the Board. The position of Lead Independent Director is entrusted to execute the following functions:
serve as a liaison between the Chairman, CEO, and the independent directors;
approve the meeting agendas for the Board;
advise the Chairman and CEO regarding the sufficiency, quality, quantity, and timeliness of information provided to the Board;
ensure that meeting schedules permit sufficient time for discussion of all agenda items;
provide consultation and direct communication with major shareholders, if requested;
preside at meetings of the Board at which the Chairman is not present, including executive sessions; and
perform other duties specified in the Lead Independent Director Charter.
In June 2019, the Board re-appointed Mr. Tim Cook to serve as Lead Independent Director for a term of three years. Mr. Cook will continue to serve as Lead Independent Director of the Company working in collaboration with Messrs. Parker and Donahoe.
The chairs of Board committees also play an active role in the leadership structure of the Board. The Corporate Responsibility, Sustainability & Governance Committee and the Board endeavor to select independent committee chairs who will provide strong leadership to guide the important work of the Board committees. Committee chairs work with the Company’s senior executives to ensure the committees are discussing the key strategic risks and opportunities of the Company. In the absence of the Lead Independent Director, a presiding director is appointed to chair executive sessions of non-management directors (consisting of all directors other than Messrs. Parker and Donahoe). The position of presiding director is rotated among the chairs of the various Board committees, other than the Executive Committee. Executive sessions are regularly scheduled and held at least once each year.
Mr. Philip H. Knight, co-founder and former Chairman of the Company, serves as Chairman Emeritus, with a standing invitation to attend meetings of the Board and its committees as a non-voting observer. Mr. John R. Thompson, Jr., former Georgetown University basketball coach and Board member, serves as Director Emeritus, and has a standing invitation to attend meetings of


22 NIKE, INC.


the Board and its committees as a non-voting observer. The Board believes that it benefits from the valuable experience and insights of the Company’s co-founder and former Chairman of the Board, and from Mr. Thompson given his tenure on the Board and intimate knowledge of matters related to product, marketing, and elite athlete relationships.
For all of these reasons, the Board believes this leadership structure is optimal.
BOARD COMMITTEES
The Board’s current standing committees are an Audit & Finance Committee; a Compensation Committee; a Corporate Responsibility, Sustainability & Governance Committee; and an Executive Committee. The Board may appoint other committees from time to time. Each standing committee has a written charter and all such charters, as well as the Company’s corporate governance guidelines, are available at the Company’s corporate website, http://investors.nike.com, and will be provided in print to any shareholder who submits a request in writing to NIKE Investor Relations, One Bowerman Drive, Beaverton, Oregon 97005-6453.
AUDIT & FINANCE COMMITTEE
MEMBERS:
John G. Connors
Peter B. Henry
Alan B. Graf, Jr., Chair
MEETINGS IN FY ’20: 13
ROLES AND RESPONSIBILITIES:
The Audit & Finance Committee provides assistance to the Board in fulfilling its legal and fiduciary obligations with respect to:
•    Matters involving the Company’s accounting, auditing, financial reporting, internal controls, information security (including risks related to cyber security), data protection, and overseeing the financial policies and activities of the Company that may have a material impact on the results of operations or the financial position of the Company;
    The integrity of the Company’s financial statements, the compliance with legal and regulatory requirements, the independent auditor’s qualifications and independence, and the performance of the Company’s internal audit function and independent auditor; and
    Considering long-term financing options, long-range tax, financial regulatory and foreign currency issues facing the Company, and management’s recommendations concerning capital deployment strategy, major capital expenditures, and material acquisitions or divestitures.
The Board has determined that each member of the Audit & Finance Committee meets all independence and financial literacy requirements applicable to audit committees under the NYSE listing standards and applicable regulations adopted by the U.S. Securities and Exchange Commission (the "SEC"). The Board has also determined that Mr. Alan B. Graf, Jr. is an "audit committee financial expert" as defined in regulations adopted by the SEC.
COMPENSATION COMMITTEE
MEMBERS:
Cathleen A. Benko
Elizabeth J. Comstock
Timothy D. Cook, Chair
MEETINGS IN FY ’20: 5
ROLES AND RESPONSIBILITIES:
The Compensation Committee discharges the Board's responsibilities regarding executive and director compensation and senior leadership succession, and its duties include the following:
    Evaluate the performance of the CEO;
    Review and approve the compensation of each executive officer;
    Grant equity incentive awards under the NIKE, Inc. Stock Incentive Plan, and determine targets and awards under the NIKE, Inc. Executive Performance Sharing Plan and the NIKE, Inc. Long-Term Incentive Plan;
    Review and provide guidance to management regarding Company policies, programs, and practices related to talent management and development for executive officers and senior management; and
    Make recommendations to the Board regarding the compensation of directors.
The Board has determined that each member of the Compensation Committee meets all independence requirements applicable to compensation committees under the NYSE listing standards.


2020 PROXY STATEMENT 23


CORPORATE RESPONSIBILITY, SUSTAINABILITY & GOVERNANCE COMMITTEE
MEMBERS:
Thasunda B. Duckett*
Michelle A. Peluso, Chair
John W. Rogers, Jr.
MEETINGS IN FY ’20: 5
ROLES AND RESPONSIBILITIES:
The Corporate Responsibility, Sustainability & Governance Committee sets the tone and pace for corporate governance and oversees the Company's Purpose Offense. Its duties include the following:
    Review and evaluate NIKE’s significant strategies, activities, policies, investments, and programs regarding social purpose, corporate responsibility, and sustainability;
•    Provide oversight of management’s efforts to ensure that the Company’s dedication to sustainability is reflected in its business operations;
    Monitor the Company’s progress towards its diversity and inclusion objectives and compliance with the Company’s responsibilities as an equal opportunity employer;
•    Review and evaluate the social, political, and environmental impact, trends, and issues in connection with the Company’s business activities and make recommendations to the Board;
    Provide oversight of the Company’s community and social impact efforts;
•    Oversee protection of the Company’s corporate reputation and other matters of importance to the Company and its stakeholders;
•    Continue to identify individuals qualified to become Board members and recommend director nominees for election at each annual shareholder meeting;
•    Develop and recommend to the Board corporate governance guidelines and a code of business conduct and ethics; and
•    Oversee the annual self-evaluations of the Board and its committees and make recommendations to the Board concerning the structure and membership of the other Board committees.
The Board has determined that each member of the Corporate Responsibility, Sustainability & Governance Committee meets all independence requirements applicable to
nominating/corporate governance committees under the NYSE listing standards.
* Ms. Duckett was elected to the Board of Directors effective November 14, 2019.
EXECUTIVE COMMITTEE
MEMBERS:
John J. Donahoe II
Travis A. Knight
Mark G. Parker, Chair
MEETINGS IN FY ’20: 1
ROLES AND RESPONSIBILITIES:
The Executive Committee is authorized to act on behalf of the Board on all corporate actions for which applicable law does not require participation by the full Board.
•    In practice, the Executive Committee acts in place of the full Board only when emergency issues or scheduling conflicts make it difficult or impracticable to assemble the full Board.
•    All actions taken by the Executive Committee must be reported at the next Board meeting, or as soon thereafter as practicable.
The Executive Committee held one formal meeting during fiscal 2020, and took action by unanimous written consent.


24 NIKE, INC.


THE BOARD’S ROLE IN RISK OVERSIGHT
While the Company’s management team is responsible for day-to-day management of the various risks facing the Company, the Board takes an active role in the oversight of the management of critical business risks. The Board does not view risk in isolation. Risks are considered in virtually every business decision and as part of NIKE’s business strategy. The Board recognizes it is neither possible nor prudent to eliminate all risk. Purposeful and appropriate risk-taking is essential for the Company to be competitive on a global basis and to achieve its strategic objectives.
 
THE BOARD OF DIRECTORS
The Board implements its risk oversight function both as a whole and through committees, which play a significant role in carrying out risk oversight. While the Audit & Finance Committee is responsible for oversight of management’s risk management policies, oversight responsibility for particular areas of risk is allocated among the Board committees according to the committee’s area of responsibility as reflected in the committee charters.
 
graphic_orangearrow.jpg
 
BOARD COMMITTEES
 
 
The AUDIT & FINANCE COMMITTEE oversees risks related to the Company’s financial statements, the financial reporting process, accounting, legal matters, investments, access to capital and capital deployment, currency risk and hedging programs, information security (including risks related to cyber security), and data protection. The committee oversees the internal audit function, reviews a risk-based plan of internal audits, and reviews a risk-based integrated audit of internal controls over financial reporting. The committee meets separately with the Vice President of Corporate Audit and Chief Risk Officer, representatives of the independent registered public accountants, and senior management.
 
 
The COMPENSATION COMMITTEE oversees risks associated with the Company’s compensation philosophy and programs, management succession plans, and executive development.
 
 
The CORPORATE RESPONSIBILITY, SUSTAINABILITY & GOVERNANCE COMMITTEE oversees risks associated with corporate social purpose and company governance, including NIKE’s Code of Conduct and its compliance programs, and the structure and performance of the Board and its committees. The committee also oversees protection of the Company’s corporate reputation including issues that involve social and community engagement, workplace diversity and inclusion, and sustainability innovation relating to the Company’s products, its supply chain (including labor practices), and the environment.
 
graphic_blackarrow.jpg
 
EXECUTIVE LEADERSHIP TEAM
Each committee chair works with one or more senior executives assigned to assist the committee in: developing agendas for the year and for each meeting, paying particular attention to areas of business risk identified by management, Board members, internal and external auditors, and in their committee charter; and scheduling agenda topics, presentations, and discussions regarding business risks within their area of responsibility. At meetings, the committees discuss areas of business risk, the potential impact, and management’s initiatives to manage business risk, often within the context of important business decisions. Through this process key business risk areas are reviewed at appropriate times, with some topics reviewed on several occasions throughout the year. At every Board meeting each committee chair provides a report to the full Board outlining its discussions and actions, including those affecting the oversight of various risks.
 
The Company believes its leadership structure, discussed in detail above, supports the risk oversight function of the Board. Strong directors chair the various committees involved in risk oversight, there is open communication between management and directors, and all directors are involved in the risk oversight function.


2020 PROXY STATEMENT 25


 
SHAREHOLDER COMMUNICATIONS WITH DIRECTORS
Shareholders or interested parties desiring to communicate directly with the Board, with non-management directors, or with any individual director may do so in writing addressed to the intended recipient or recipients, c/o Ann M. Miller, Vice President, Corporate Secretary, and Chief Ethics & Compliance Officer, NIKE, Inc., One Bowerman Drive, Beaverton, Oregon 97005-6453. All such communications will be reviewed, compiled as necessary, and then forwarded to the designated recipient or recipients in a timely manner.
 
CODE OF CONDUCT
The NIKE Code of Conduct, which was refreshed in 2019, is available at the Company’s corporate website, http://investors.nike.com, and will be provided in print without charge to any shareholder who submits a request in writing to NIKE Investor Relations, One Bowerman Drive, Beaverton, Oregon 97005-6453. The Code of Conduct applies to all of the Company’s employees and directors, including our CEO and all other executive officers. The Code of Conduct provides that any waiver of the Code of Conduct for executive officers or directors may be made only by the Board or a committee of the Board. Any such waiver will be publicly disclosed, when required by law. The Company plans to disclose amendments to, and waivers from, the Code of Conduct on the Company’s corporate website: http://investors.nike.com.
DIRECTOR COMPENSATION FOR FISCAL 2020
NAME
FEES EARNED OR
PAID IN CASH
($)
 
STOCK
AWARDS
(1)(2) 
($)

CHANGE IN
PENSION VALUE AND
NONQUALIFIED DEFERRED
COMPENSATION EARNINGS
($)

ALL OTHER
COMPENSATION
(3) 
($)

TOTAL
($)
Cathleen A. Benko
100,000
 
175,049


20,000

295,049
Elizabeth J. Comstock
100,000
 
175,049


20,000

295,049
John G. Connors
105,000
 
175,049


20,000

300,049
Timothy D. Cook
150,000
 
175,049


20,000

345,049
Thasunda B. Duckett
54,670
(4) 
175,056



229,726
Alan B. Graf, Jr.
130,000
 
175,049



305,049
Peter B. Henry
103,118
 
175,049


5,000

283,167
Travis A. Knight
100,000
 
175,049



275,049
John C. Lechleiter
31,253
(5) 


20,000

51,253
Michelle A. Peluso
118,967
 
175,049


20,000

314,016
John W. Rogers, Jr.
100,000
 
175,049


20,000

295,049
John R. Thompson, Jr.
82,000
(6) 
175,049


22,536

279,585
(1)
Represents the grant date fair value of restricted stock awards granted in fiscal 2020 computed in accordance with accounting guidance applicable to stock-based compensation. The grant date fair value is based on the closing market price of our Class B Stock on the grant date. As of May 31, 2020, non-employee directors held the following number of outstanding shares of unvested restricted stock: Ms. Benko, 1,996; Ms. Comstock, 1,996; Mr. Connors, 1,996; Mr. Cook, 1,996; Ms. Duckett, 1,918; Mr. Graf, 1,996; Mr. Henry, 1,996; Mr. Knight, 1,996; Ms. Peluso, 1,996; Mr. Rogers, 1,996; and Mr. Thompson, 1,996.
(2)
As of May 31, 2020, non-employee directors held outstanding options for the following number of shares of our Class B Stock: Ms. Comstock, 42,000; Mr. Connors, 66,000; Mr. Cook, 66,000; and Dr. Lechleiter, 66,000.
(3)
Includes matched contributions to charities in the following amounts: Ms. Benko, $20,000; Ms. Comstock, $20,000; Mr. Connors, $20,000; Mr. Cook, $20,000; Mr. Henry, $5,000; Dr. Lechleiter, $20,000; Ms. Peluso, $20,000; and Mr. Rogers, $20,000. For Mr. Thompson, includes medical and life insurance premiums of $22,536 paid by the Company.
(4)
Ms. Duckett was appointed to the Board of Directors on November 14, 2019 (includes prorated annual retainer payments).
(5)
Dr. Lechleiter did not stand for re-election at our 2019 annual meeting of shareholders and retired effective September 19, 2019 (includes prorated annual retainer payments).
(6)
Mr. Thompson retired from the Board effective May 31, 2020 and transitioned to the role of Director Emeritus.


26 NIKE, INC.


DIRECTOR FEES AND ARRANGEMENTS
Under our standard director compensation program in effect for fiscal 2020, non-employee directors receive:
An annual retainer of $100,000, paid in quarterly installments.
Upon appointment to the Board, a one-time, sign-on restricted stock award valued at $175,000 on the date of grant, generally, the date of appointment. The one-time, sign-on restricted stock award is subject to forfeiture in the event that service as a director terminates prior to the anniversary of the date of grant.
An annual restricted stock award valued at $175,000 on the date of grant, generally, the date of each annual meeting of shareholders. The annual restricted stock award is subject to forfeiture in the event that service as a director terminates prior to the earlier of the next annual meeting and the anniversary of the date of grant.
For the Lead Independent Director, an annual retainer of $30,000, paid in quarterly installments.
For chairs of Board committees (other than the Executive Committee), an annual retainer of $20,000 for each committee chaired ($25,000 for the chair of the Audit & Finance Committee), paid in quarterly installments.
For Audit & Finance Committee members, an additional annual retainer of $5,000, paid in quarterly installments.
Payment or reimbursement of travel and other expenses incurred in attending Board meetings.
Matching charitable contributions under the NIKE Matching Gift Program, under which directors are eligible to contribute to qualified charitable organizations and the Company provides a matching contribution to the charities in an equal amount, up to $20,000 in the aggregate, for each director annually.
In fiscal 2020, Mses. Benko, Comstock, Duckett and Peluso, Messrs. Connors, Cook, Graf, Henry, Knight, and Rogers, and Dr. Lechleiter participated in our standard director compensation program as described above, and Mr. Donahoe participated in our standard director compensation program prior to his appointment as President and Chief Executive Officer, effective January 2020. Mr. Parker does not receive any additional compensation for services provided as a director.
Mr. Thompson did not participate in our standard director compensation program, pursuant to his election made in fiscal 2000. In fiscal 2020, Mr. Thompson received an annual retainer of $82,000 (instead of the $100,000 annual retainer fee paid under our standard program), medical insurance, and $500,000 of life insurance coverage paid for by the Company. Additionally, on September 19, 2019, the date of the 2019 annual meeting of shareholders, Mr. Thompson received an annual restricted stock award valued at $175,000 on the same terms that apply to the restricted stock awards granted pursuant to our standard program. He was also eligible for payment or reimbursement of Board-related expenses, and participation in the NIKE Matching Gift Program on the same basis as other directors.
Effective June 1, 2020, the Company changed the standard director compensation program by increasing the value of the annual restricted stock award to $185,000 and increasing the value of the one-time, sign-on restricted stock award to $185,000 for newly appointed non-employee directors. All other components of director compensation remain the same.
STOCK OWNERSHIP GUIDELINES FOR DIRECTORS
NIKE maintains stock ownership guidelines for all non-employee directors. Under these guidelines, directors are required to hold NIKE stock valued at five times their annual cash retainer. New directors are required to attain these ownership levels within five years of their election to the Board. Each of our directors has met or is on track to meet the specified ownership level.
DIRECTOR PARTICIPATION IN DEFERRED COMPENSATION PLAN
Under our Deferred Compensation Plan, non-employee directors may elect in advance to defer up to 100 percent of the director fees paid by the Company. For a description of the plan, see the section below titled "Compensation Discussion and Analysis—Executive Compensation Tables—Non-Qualified Deferred Compensation in Fiscal 2020—Non-Qualified Deferred Compensation Plans". In addition, in fiscal 2000, Mr. Thompson received credits to a fully vested NIKE stock account under the Deferred Compensation Plan in exchange for his waiver of rights to future payments under a former non-employee director retirement program. The Class B Stock credited to Mr. Thompson’s account will be distributed to him upon termination of his service as Director Emeritus and the account is credited with quarterly dividends until distributed.


2020 PROXY STATEMENT 27


COMPENSATION DISCUSSION AND ANALYSIS
 
 
PROPOSAL 2
SHAREHOLDER ADVISORY VOTE TO APPROVE 
EXECUTIVE COMPENSATION
 
In accordance with the requirements of Section 14A of the Securities Exchange Act of 1934, we are submitting to shareholders our annual "say-on-pay proposal", an advisory vote to approve the compensation of our Named Executive Officers as described in this proxy statement.
At the Company’s 2019 annual meeting of shareholders, approximately 97% of the votes cast on the say-on-pay proposal were voted in favor of the proposal. The Compensation Committee believes this affirms shareholders’ support of the Company’s approach to executive compensation and the committee’s decisions.
As discussed in this section, our executive compensation program is designed to attract and retain top-tier talent and maximize shareholder value. To achieve the objectives of our executive compensation program and emphasize pay-for-performance principles, the Compensation Committee has continued to employ strong governance practices, including:
    basing a majority of total compensation on performance and retention incentives;
    setting annual and long-term cash incentive award targets based on clearly disclosed, objective performance measures;
•    mitigating undue risk associated with compensation by using multiple performance targets, caps on potential incentive payments, and a clawback policy; and
•    requiring executive officers to hold NIKE stock through published stock ownership guidelines.
Because your vote is advisory, it will not be binding on the Board. However, the Board values shareholder opinions, and the Compensation Committee will take into account the outcome of the vote when considering future executive compensation arrangements.
 
BOARD RECOMMENDATION
iconcheckmark.jpg
The Board of Directors recommends that shareholders vote FOR approval of the following resolution:
RESOLVED, that the shareholders approve the fiscal 2020 compensation paid to the Named Executive Officers as disclosed in this proxy statement pursuant to the SEC’s compensation disclosure rules (which disclosure includes the Compensation Discussion and Analysis, the compensation tables, and the narrative disclosures that accompany the compensation tables).
 
 


28 NIKE, INC.


INTRODUCTION
This Compensation Discussion and Analysis ("CD&A") describes our compensation program, philosophy, decisions, and process for the compensation of our "Named Executive Officers" (also referred to as our "NEOs") for fiscal 2020:
NAMED EXECUTIVE OFFICER
TITLE
John J. Donahoe II
President and Chief Executive Officer (since January 13, 2020)
Mark G. Parker
Executive Chairman (since January 13, 2020)
Chairman, President, and Chief Executive Officer (until January 12, 2020)
Matthew Friend
Executive Vice President and Chief Financial Officer (since April 1, 2020)
Andrew Campion
Chief Operating Officer (since April 1, 2020)
Executive Vice President and Chief Financial Officer (until March 31, 2020)
Hilary K. Krane
Executive Vice President, Chief Administrative Officer and General Counsel
Monique Matheson
Executive Vice President, Global Human Resources
John F. Slusher
Executive Vice President, Global Sports Marketing
Elliott J. Hill
President, Consumer and Marketplace (until March 31, 2020)
Eric D. Sprunk
Chief Operating Officer (until March 31, 2020)

This CD&A is organized into five sections:
Executive Summary (page 29)
Leadership Transitions (page 31)
Compensation of Our Named Executive Officers (page 32)
Our Compensation Process (page 39)
Other Compensation Practices (page 40)
EXECUTIVE SUMMARY
GUIDING PRINCIPLES
To drive business results and maximize shareholder value, our executive compensation is highly incentive-based.
To emphasize long-term performance, increase alignment between executives and shareholders, and support retention, incentive compensation is weighted towards long-term awards.
To foster teamwork and ensure internal pay equity, we utilize a cohort approach by aligning compensation across certain executive roles.
To ensure that our executive compensation program supports our business strategy and talent plan, we determine cohort compensation levels by holistically considering factors relating to our business, the market for top-tier talent, and the applicable executives.


2020 PROXY STATEMENT 29


ANNUAL DIRECT COMPENSATION ELEMENTS
NIKE's annual direct compensation for the Named Executive Officers generally consists of the following elements:
ELEMENT
 
KEY CHARACTERISTICS
 
PURPOSE
Base Salary
 
Fixed cash compensation
 
Provides market competitive baseline compensation to attract and retain top-tier talent
Annual Cash Incentive Award - Executive Performance Sharing Plan ("PSP")
 
Variable cash incentive compensation earned at 0% – 150% based on Company performance over a 1-year performance period
 
Motivates and rewards achievement of sustainable and profitable growth
Long-Term Incentive Awards
Cash
Long-Term Incentive Plan ("LTIP")
 
Variable cash incentive compensation earned at 0% – 200% based on Company performance over a 3-year performance period
 
Motivates and rewards achievement of long-term shareholder value and growth
Stock
Stock Options
 
Stock-based incentive compensation that generally vests in 4 equal annual installments; only provides value if our stock price appreciates
 
Aligns NEOs' interests with those of our shareholders by rewarding achievement of upside potential; promotes retention
Restricted Stock Units ("RSUs")
 
Stock-based incentive compensation that generally vests in 3 equal annual installments; value tied to our stock price
 
Aligns NEOs' interests with those of our shareholders by rewarding long-term value creation; promotes retention

EXECUTIVE COMPENSATION GOVERNANCE PRACTICES
 
 
 
WHAT WE DO
 
WHAT WE DON’T DO
ü    Base a majority of total compensation on performance and retention incentives
ü    Mitigate undue risk by using multiple performance periods and metrics, incentive payment caps, and a clawback policy
ü    Base annual and long-term cash incentive awards on clearly disclosed, objective performance goals
ü    Maintain robust stock ownership guidelines
ü    Vest stock-based awards over time to promote long-term performance and retention
ü    Provide only double-trigger change-in-control acceleration for stock-based awards
 
û    No retirement acceleration for RSUs
û    No dividend equivalents paid on RSUs unless and until shares are earned
û    No repricing of stock options
û    No hedging transactions or short sales permitted
û    No pension or supplemental executive retirement plan
û    No tax gross-ups for perquisites
û    No cash-based change-in-control benefits
û    No excise tax gross-ups upon change of control
 
 
 
FISCAL 2020 DEVELOPMENTS
Fiscal 2020 was a year of transformation, both at NIKE and around the world. For NIKE, fiscal 2020 brought key changes to our leadership team. In January 2020, our long-time President and CEO, Mr. Mark G. Parker, transitioned into the role of Executive Chairman while Mr. John J. Donahoe II, a tenured director of the Company, stepped into the roles of President and CEO. Additional executive officer transitions occurred in April 2020, in accordance with our succession planning offense. Around the same time, the world was being transformed as a result of COVID-19. First identified in December 2019, and subsequently declared a pandemic by the World Health Organization, COVID-19 has significantly impacted the health, safety, and livelihood of people around the world, and brought economic challenges on a global scale to countries, companies and financial markets. Because NIKE's fiscal year ended on May 31, 2020, fiscal 2020 included a period of strong pre-pandemic performance followed by a shorter period which was significantly impacted by COVID-19. The Compensation Committee's actions addressing each of these key developments—our leadership transitions and the COVID-19 pandemic—and the resulting impacts on fiscal 2020 executive compensation are discussed in detail throughout the CD&A.


30 NIKE, INC.


LEADERSHIP TRANSITIONS
During fiscal 2020, we made significant changes to our executive team intended to build on our solid foundation and enable our next phase of sustainable growth. On January 13, 2020, Mr. Donahoe became President and CEO of NIKE and Mr. Parker—our President and CEO since 2006—became Executive Chairman. Mr. Elliott J. Hill and Mr. Eric D. Sprunk announced their retirements as President of Consumer and Marketplace and Chief Operating Officer, respectively, on February 12, 2020. On April 1, 2020, Mr. Andrew Campion succeeded Mr. Sprunk as Chief Operating Officer and Mr. Matthew Friend succeeded Mr. Campion as Chief Financial Officer. These executive transitions were executed in accordance with the Company’s succession planning offense to establish the executive team that will set the pace for the Company. In connection with, and in support of, these transitions, the Compensation Committee approved certain compensation arrangements and one-time awards, as described below.
In connection with the CEO transition, the Compensation Committee approved compensation arrangements for each of Messrs. Donahoe and Parker. The compensation package for Mr. Donahoe was designed to tie his pay to Company performance and align his long-term economic interests with those of our shareholders. Mr. Donahoe's annual direct compensation is consistent with our executive compensation program and competitive in light of the market for top-tier talent. Mr. Donahoe's fiscal 2020 annual direct compensation is discussed in more detail below in the section titled "Compensation of Our Named Executive Officers". As illustrated below, the Compensation Committee also made certain one-time grants to Mr. Donahoe, consisting of a cash incentive award and sign-on stock-based awards under our Stock Incentive Plan. These one-time CEO transition grants are intended to immediately align Mr. Donahoe's incentives with the Company's ongoing and long-term success and to make Mr. Donahoe whole for a portion of compensation that he forfeited from his prior employer in connection with his appointment as NIKE's CEO:
 
ONE-TIME CEO TRANSITION GRANTS FOR MR. DONAHOE
 
transitiongrants.jpg
Transition-Period Cash Incentive Award
 
• Cash incentive award granted to support a smooth and effective transition
 
• Earned based on the achievement of qualitative, transition-related performance metrics over the performance period of January 13, 2020 to May 31, 2021
 
Sign-On Performance Options
 
• Vesting conditioned on (1) a 20% increase in the value of our Class B Stock from the value on the grant date and (2) Mr. Donahoe's continued service with the Company for at least 3 years
 
Sign-On RSUs
 
• Vest in equal annual installments over 3 years
 
• Accumulate dividend equivalents that are paid only upon vesting
 
To support a smooth and effective CEO transition, the Compensation Committee granted Mr. Parker a one-time, transition-period cash incentive award with a target value of $10,000,000, which will be earned based on the achievement of qualitative, transition-related performance metrics over the performance period of January 13, 2020 to May 31, 2021.
The Compensation Committee approved annual direct compensation for Mr. Friend in connection with his transition into the role of Chief Financial Officer. The Compensation Committee had previously approved annual direct compensation for Mr. Campion in his role as Chief Financial Officer and determined to maintain that compensation for the remainder of the fiscal year. Fiscal 2020 annual direct compensation for each of these executives is consistent with our executive compensation program and is discussed in more detail below in the section titled "Compensation of Our Named Executive Officers".
The Compensation Committee also approved one-time grants of stock-based transition awards to Messrs. Campion and Friend in the amounts of $10,000,000 and $6,000,000, respectively, to support business and leadership continuity during this transitional period. These awards are in the form of RSUs that vest in equal annual installments over four years and accumulate dividend equivalents that are paid only upon vesting. To further support business and leadership continuity during this executive transition period, and to promote the ongoing engagement of the continuing members of our senior leadership team, the Compensation


2020 PROXY STATEMENT 31


Committee also approved one-time grants of stock-based retention awards in the amount of $4,000,000 to each of Ms. Hilary K. Krane, Ms. Monique Matheson, and Mr. John F. Slusher. These awards are in the form of RSUs that cliff vest at the end of the three-year retention period and accumulate dividend equivalents that are paid only upon vesting. The transition and retention awards were granted on June 1, 2020 and therefore will be reflected in next year's Summary Compensation Table as part of fiscal 2021 compensation.
COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS
COMPENSATION OBJECTIVES AND STRUCTURE
Our executive compensation program is designed to attract and retain top-tier talent in a competitive marketplace and to maximize shareholder value by rewarding NEOs for strong Company performance. The program generally consists of annual direct compensation, with a focus on incentive compensation, and competitive benefits that are generally consistent with the benefits offered to our other U.S.-based employees. During fiscal 2020, the Compensation Committee also approved special one-time grants of incentive-based and stock-based compensation to certain NEOs in connection with senior leadership changes to support continuity during a key transitional period, as described in the section above titled "Leadership Transitions". In addition, in response to the COVID-19 pandemic, the Compensation Committee made certain determinations with respect to fiscal 2020 incentive compensation to recognize strong performance prior to the pandemic, ensure sustained engagement, and drive key business results, as described in the sections below titled "Long-Term Cash Incentive—Fiscal 2020 – 2022 LTIP Award Grants" and "Cash Bonus".
We structure our executive compensation program in the context of our business strategy and talent plan. To foster teamwork and ensure internal pay equity, we utilize a cohort approach that aligns compensation across certain executive roles. Cohort compensation levels are determined by holistically considering factors such as future potential, individual performance, market insights, succession planning, retention, and leadership continuity. New executives are phased into a cohort by taking into consideration their relative experience, expected contributions, and market position.
Our philosophy is to "pay for performance" in order to drive business results and maximize shareholder value. As a result, executive compensation is highly incentive-based and weighted towards long-term awards to emphasize long-term performance and support retention. Our executive compensation program as a whole, and in particular annual direct compensation, balances performance incentives using performance metrics and performance periods, with a mixture of cash- and stock-based compensation elements. Stock-based compensation is also structured to pay for performance and is delivered 60% in the form of stock options and 40% in the form of RSUs. The following charts illustrate the mix of components that make up fiscal 2020 target annual direct compensation for our NEOs.
fy20targettotalannualdirectc.jpg
*
Represents the average for Messrs. Donahoe and Parker.
**
Represents the average for Messrs. Friend, Campion, Slusher, Hill, and Sprunk and Mses. Krane and Matheson.


32 NIKE, INC.


BASE SALARY
Base salary is a fixed element of compensation that serves to attract and retain top-tier talent. The Compensation Committee generally reviews and determines base salaries for our Named Executive Officers in June, with any adjustments becoming effective in August of the same year. For fiscal 2020, the Compensation Committee granted increases for each of Messrs. Campion, Slusher, Hill, and Sprunk and Ms. Krane to ensure that their salary levels remain positioned competitively relative to the market. Mr. Parker's base salary remained unchanged compared to fiscal 2019. The Compensation Committee determined base salaries for Messrs. Donahoe and Friend in connection with their appointment as President and CEO, and Chief Financial Officer, respectively, and for Ms. Matheson during its yearly review of executive annual direct compensation.
NAMED EXECUTIVE OFFICER
FISCAL 2020 BASE SALARY

% CHANGE(1)
John J. Donahoe II

$1,500,000

N/A
Mark G. Parker

$1,700,000

0%
Matthew Friend

$875,000

N/A
Andrew Campion

$1,100,000

4.8%
Hilary K. Krane

$1,100,000

4.8%
Monique Matheson

$1,100,000

N/A
John F. Slusher

$1,100,000

18.9%
Elliott J. Hill

$1,200,000

4.3%
Eric D. Sprunk

$1,200,000

4.3%
(1)
Represents the change in base salary compared to fiscal 2019.
ANNUAL CASH INCENTIVE
Annual cash incentive awards are paid to the Named Executive Officers under our Executive Performance Sharing Plan ("PSP"). PSP awards reflect our "pay for performance" philosophy: they are earned between 0% and 150% of target based on Company performance during the fiscal year. The Compensation Committee retains discretion to reduce or eliminate PSP award payouts based on individual or Company performance. To align employees and reinforce our one-team culture, the same compensation philosophy, structure, and metrics that underlie our PSP awards apply to all global employees who are eligible to participate in the Company's success through incentive bonuses.
The Compensation Committee increased the PSP target award for each of Messrs. Campion, Slusher, Hill, and Sprunk and Ms. Krane from 100% of base salary to 120% for fiscal 2020 to strengthen the competitiveness of their total direct compensation while ensuring that their compensation remains highly incentive-based. Mr. Parker's PSP target award remained the same as in fiscal 2019. The Compensation Committee determined PSP target awards for Messrs. Donahoe and Friend in connection with their appointment as President and CEO, and Chief Financial Officer, respectively, and for Ms. Matheson during its yearly review of executive annual direct compensation. The fiscal 2020 PSP target awards are:
NAMED EXECUTIVE OFFICER
FISCAL 2020 PSP TARGET AWARD
(% OF BASE SALARY)
John J. Donahoe II
200%
Mark G. Parker
200%
Matthew Friend
120%
Andrew Campion
120%
Hilary K. Krane
120%
Monique Matheson
120%
John F. Slusher
120%
Elliott J. Hill
120%
Eric D. Sprunk
120%
The metric for fiscal 2020 PSP awards was "Adjusted EBIT", calculated as earnings before interest and taxes ("EBIT") adjusted to exclude the effect of acquisitions, divestitures, accounting changes, restructurings, unanticipated exchange rate fluctuations and other extraordinary, unusual, or infrequently occurring items. The Compensation Committee selected Adjusted EBIT as the measure of Company performance because EBIT represents the key measure used internally to manage financial performance and drive operational performance, and adjusting EBIT to exclude the impact of certain non-operational events helps to drive and reward organic growth. The elimination of unanticipated foreign exchange volatility was added to the set of EBIT adjustments for


2020 PROXY STATEMENT 33


fiscal 2020 awards because such volatility is disconnected from actual operating results, and this adjustment enables PSP to more precisely reward achievement of sustainable, profitable growth.
In June 2019, the Compensation Committee established challenging performance goals, as illustrated below, to drive growth consistent with NIKE's long-term financial model while supporting executives' continued engagement. For fiscal 2020, NIKE achieved annual Adjusted EBIT of $3,633 million. This achievement was below the threshold performance goal, and as a result, each Named Executive Officer’s PSP award paid out at 0%.
FISCAL 2020 PSP PERFORMANCE GOAL
(Dollars in millions)
% PAYOUT
THRESHOLD
50%
TARGET
100%
MAXIMUM
150%
Adjusted EBIT
graphic_annualcashincentive.jpg
LONG-TERM CASH INCENTIVE
Long-term cash incentive awards are paid to the Named Executive Officers under our Long-Term Incentive Plan ("LTIP"). Like the PSP awards, LTIP awards reflect our "pay for performance" philosophy: they are earned between 0% and 200% of target based on Company performance during a three-year performance period. The Compensation Committee retains discretion to adjust LTIP award payouts based on individual or Company performance.
At the beginning of each fiscal year, the Compensation Committee sets target award amounts for our executive officers, selects LTIP award metrics, and determines performance goals. The Compensation Committee then determines the applicable payout percentage at the end of the three-year performance period.
In connection with Mr. Donahoe's appointment as President and CEO, the Compensation Committee granted Mr. Donahoe LTIP awards with respect to each outstanding tranche of LTIP awards, consistent with our practice for individuals newly eligible for LTIP awards. Mr. Donahoe's fiscal 2018 – 2020 LTIP target award and fiscal 2019 – 2021 LTIP target award were each set at $5,000,000. The terms and performance metrics of these awards are discussed in our 2018 and 2019 proxy statements, respectively. Mr. Donahoe's fiscal 2020 – 2022 LTIP award is described immediately below.
FISCAL 2020 – 2022 LTIP AWARD GRANTS
For each of Messrs. Parker, Campion, Slusher, Hill, and Sprunk and Ms. Krane, the Compensation Committee maintained fiscal 2020 – 2022 LTIP target awards at the same level as was set for LTIP awards granted in fiscal 2019. The Compensation Committee determined fiscal 2020 – 2022 LTIP target awards for Messrs. Donahoe and Friend in connection with their appointment as President and CEO, and Chief Financial Officer, respectively, and for Ms. Matheson during its yearly review of executive annual direct compensation. The fiscal 2020 – 2022 LTIP target awards were:
NAMED EXECUTIVE OFFICER
FISCAL 2020 – 2022 LTIP
TARGET AWARD
John J. Donahoe II
$5,000,000
Mark G. Parker
$5,000,000
Matthew Friend
$1,000,000
Andrew Campion
$1,000,000
Hilary K. Krane
$1,000,000
Monique Matheson
$1,000,000
John F. Slusher
$1,000,000
Elliott J. Hill
$1,000,000
Eric D. Sprunk
$1,000,000
In June 2019, the Compensation Committee selected, and set performance goals for, two equally weighted performance metrics for the fiscal 2020 – 2022 LTIP awards: (1) revenues and (2) diluted earnings per share ("EPS"), in each case excluding generally the effect of acquisitions, divestitures, accounting changes, changes in tax law, and other extraordinary, unusual, or infrequently occurring items (respectively, "Adjusted Revenue" and "Adjusted EPS"). In June 2020, in response to the COVID-19 pandemic, the Compensation Committee modified the performance metrics for these awards to ensure sustained engagement and drive key business results during a dynamic and unprecedented period for the Company. As modified, the fiscal 2020 – 2022 LTIP awards


34 NIKE, INC.


are earned 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"), as shown in the table below:
FISCAL 2020 – 2022 PERFORMANCE GOAL
% PAYOUT
THRESHOLD
25%
TARGET
100%
MAXIMUM
200%
 
Relative TSR1
graphiclongtermcashincentive.jpg
 
(1)
Relative TSR for fiscal years 2020, 2021, and 2022, calculated using the 20-trading day average stock price and assuming that dividends paid during the performance period are reinvested in the applicable company’s stock.
LTIP award payout based on Relative TSR performance is subject to a cap of 100% of target if Absolute TSR for the performance period is negative. The Compensation Committee selected three-year Relative TSR as the performance metric because it is an objective and transparent measure of long-term shareholder value, especially in the context of a volatile market. Furthermore, the cap on payout if Absolute TSR is negative incentivizes NEOs to pursue long-term growth.
FISCAL 2018 – 2020 LTIP AWARD RESULTS
For fiscal 2020, the Named Executive Officers were eligible to receive payout of their fiscal 2018 – 2020 LTIP awards. These awards were earned based on three-year cumulative Adjusted Revenue and Adjusted EPS performance targets for fiscal years 2018 – 2020 that were set in June 2017. In June 2020, the Compensation Committee determined that a payout of 0% under these awards was earned by each NEO based on the average of the cumulative Adjusted Revenue and cumulative Adjusted EPS achievements as shown in the table below.
FISCAL 2018 – 2020 PERFORMANCE GOALS
(Dollars in millions, except per share data)
% PAYOUT
THRESHOLD
50%
TARGET
100%
MAXIMUM
200%
 
Adjusted Revenue1
graphlongtermcashincentiva01.jpg
TOTAL PAYOUT:
0%
Adjusted EPS1
graphlongtermcashincentiva02.jpg
(1)
Cumulative Adjusted Revenue and cumulative Adjusted EPS for fiscal years 2018, 2019, and 2020.
LONG-TERM STOCK INCENTIVE
Stock-based incentive awards reward long-term Company performance and align executives' interests with those of our shareholders. Such awards form the largest component of our NEOs' annual direct compensation, constituting on average 49% of fiscal 2020 total target compensation for Messrs. Donahoe and Parker (43% for our other NEOs) and 66% of fiscal 2020 total long-term incentive compensation for Messrs. Donahoe and Parker (72% for our other NEOs).
We grant stock-based incentive awards under our Stock Incentive Plan in the form of stock options and RSUs. Historically, the Compensation Committee has determined stock option grants for our NEOs as a number of shares and RSU grants as a dollar value. For fiscal 2020, the Compensation Committee determined both stock option grants and RSUs as dollar values. This change eliminates the impact of stock price volatility on stock option grants and enables the committee to more precisely balance the mixture of stock-based compensation elements. Accordingly, for each of our NEOs, the stock portion of incentive compensation was granted 60% in the form of stock options and 40% in the form of RSUs.


2020 PROXY STATEMENT 35


The fiscal 2020 stock-based incentive awards were:
NAMED EXECUTIVE OFFICER
STOCK OPTIONS
RSUs
TOTAL FISCAL 2020 STOCK-BASED INCENTIVE AWARDS
John J. Donahoe II
$5,400,000
$3,600,000
$9,000,000
Mark G. Parker
$6,000,000
$4,000,000
$10,000,000
Matthew Friend
$600,000
$400,000
$1,000,000
Andrew Campion
$1,740,000
$1,160,000
$2,900,000
Hilary K. Krane
$1,740,000
$1,160,000
$2,900,000
Monique Matheson
$1,740,000
$1,160,000
$2,900,000
John F. Slusher
$1,740,000
$1,160,000
$2,900,000
Elliott J. Hill
$1,950,000
$1,300,000
$3,250,000
Eric D. Sprunk
$1,950,000
$1,300,000
$3,250,000
For fiscal 2020, the Compensation Committee increased the total value of stock-based incentive awards for Mr. Parker by $1,948,000 compared to his awards granted in fiscal 2019 (based on the grant date fair value of fiscal 2019 stock options as reported in last year's proxy statement and the award value of fiscal 2019 RSUs). Due to the change to a 60% / 40% mixture of stock options and RSUs, this resulted in an increase in the stock option award value of $2,948,000 and a decrease in the RSU award value of $1,000,000. Compared to fiscal 2019 awards, the Compensation Committee increased the total value of fiscal 2020 stock-based incentive awards for each of Mr. Campion and Ms. Krane by $354,800 (consisting of a stock option increase of $344,800 and a RSU increase of $10,000), for Mr. Slusher by $742,000 (consisting of a stock option increase of $432,000 and a RSU increase of $310,000), and for each of Messrs. Hill and Sprunk by $430,400 (consisting of a stock option increase of $380,400 and a RSU increase of $50,000). In each case, the increase in the total value of fiscal 2020 stock-based incentive awards reflects the Compensation Committee's consideration of multiple factors, including performance, succession planning, our cohort compensation approach, and the desired mix for stock-based incentive awards. The Compensation Committee determined the value of stock-based incentive awards for Mr. Donahoe in connection with his appointment as President and CEO and for Ms. Matheson during its yearly review of executive annual direct compensation. For Mr. Friend, the value of stock-based incentive awards for fiscal 2020 was determined by the Company in connection with his previous role, prior to his appointment as an executive officer.
STOCK OPTIONS
Stock options align our Named Executive Officers' interests with those of our shareholders by rewarding the achievement of upside potential, and they reflect our "pay for performance" philosophy because they provide value to the NEOs only if the price of our Class B Stock appreciates.
The number of stock options granted to each NEO for fiscal 2020 was determined by dividing the NEO's award value by the Black-Scholes value (calculated based on a twenty-day average stock price and the available five-year and seven-year interest rates) of a stock option on the date of grant. Options granted to the Named Executive Officers vest in equal annual installments over four years and have an exercise price equal to the closing market price of our stock on the date of grant. To promote retention, stock options generally provide that if a Named Executive Officer leaves the Company, he or she forfeits any unvested stock options. Forfeiture is subject to a limited retirement provision designed to encourage executives to delay retirement (as described in the section below titled "Executive Compensation Tables—Potential Payments Upon Termination or Change-in-Control").
RSU AWARDS
RSUs align our Named Executive Officers' interests with those of our shareholders by rewarding the achievement of long-term value creation, and they reflect our "pay for performance" philosophy because their value is directly tied to our Class B Stock price.
The number of RSUs granted to each NEO for fiscal 2020 was determined by dividing the NEO's award value by the closing market price of our Class B Stock on the date of grant. RSUs granted to the Named Executive Officers vest in equal annual installments over three years and accumulate dividend equivalents that are paid only upon vesting. To promote retention, RSU awards generally provide that any unvested RSUs are forfeited if the Named Executive Officer leaves the Company.
CASH BONUS
As described above, our Named Executive Officers received 0% payouts for both the fiscal 2020 PSP and the fiscal 2018 – 2020 LTIP. Overall performance was below threshold for each plan due to the significant impact of the COVID-19 pandemic on our incentive plans during the final quarter of the applicable performance period. Prior to the fourth quarter of fiscal 2020, Adjusted


36 NIKE, INC.


EBIT was on track to yield an above-target payout for the PSP, and Adjusted Revenue and Adjusted EPS were on track to yield an LTIP payout between threshold and target levels.
Consistent with our "pay for performance" philosophy, the Compensation Committee and the Company determined to recognize the Company's strong pre-pandemic performance for all employees, both to reward strong pre-pandemic performance and to ensure sustained employee engagement and retention, and drive business results during an unprecedented period of transition. Therefore, with respect to each incentive-eligible employee who is not an executive officer, the annual bonus payout was adjusted from 0% to 100% to approximate Adjusted EBIT performance during the first three quarters of the one-year performance period for the fiscal 2020 PSP, and the LTIP payout was adjusted from 0% to 75% to approximate Adjusted Revenue and Adjusted EPS performance during the first eleven quarters of the three-year performance period for the fiscal 2018 – 2020 LTIP. To approximate the short- and long-term cash incentive payouts that were received by all other eligible employees, the Compensation Committee granted discretionary cash bonuses to each of our Named Executive Officers. The discretionary cash bonus award to each of our NEOs was as follows:
NAMED EXECUTIVE OFFICER
DISCRETIONARY CASH BONUS
John J. Donahoe II
$6,750,000
Mark G. Parker
$6,025,000
Matthew Friend
$1,576,800
Andrew Campion
$2,070,000
Hilary K. Krane
$2,070,000
Monique Matheson
$2,070,000
John F. Slusher
$2,070,000
Elliott J. Hill
$2,190,000
Eric D. Sprunk
$2,190,000
MR. PARKER'S 2015 PERFORMANCE-BASED RSU AWARD
As previously disclosed in our 2016 proxy statement, in June 2015 the Compensation Committee granted Mr. Parker performance-based RSUs ("PSUs") that were to be earned between 0% and 100% of target based on cumulative revenue growth and cumulative EPS growth, each equally weighted, over the five-year performance period of fiscal 2016 through fiscal 2020 (subject to Mr. Parker's continued employment with the Company until June 30, 2020). In June 2020, the Compensation Committee determined that cumulative revenue growth over the performance period was approximately $179,781,000, corresponding to an earnout of 0%, and cumulative EPS growth over the performance period (which was not adjusted for the December 2015 stock split, in order to align with the pre-stock split targets) was $22.18, corresponding to an earnout of 0%. Accordingly, the Compensation Committee determined that the PSUs were earned at 0%.
OTHER COMPENSATION
PROFIT SHARING AND RETIREMENT PLANS
We maintain a U.S. tax qualified retirement savings plan—the 401(k) Savings and Profit Sharing Plan for Employees of NIKE, Inc. (the "401(k) Plan")—under which all eligible U.S. employees, including the Named Executive Officers, are able to make pre-tax and after-tax contributions from their cash compensation. We make annual matching contributions for all participants equal to 100% of their pre-tax contributions up to 5% of their total eligible compensation.
We also generally make annual profit sharing contributions to the accounts of eligible U.S. employees, including the Named Executive Officers, under the 401(k) Plan. The aggregate profit sharing contribution amount, if any, is determined each year by the Board of Directors. This aggregate contribution is allocated among eligible employees based on an equal percentage of their total salary and annual cash incentive award for the year. For fiscal 2020, the profit sharing contribution percentage for each eligible employee was 0%.
The Internal Revenue Code limits the amount of compensation that can be deferred under the 401(k) Plan, and also limits the amount of salary and annual cash incentive award ($280,000 for fiscal 2020) that may be taken into account when determining contributions under that plan. Accordingly, we provide our Named Executive Officers and other highly compensated employees with the opportunity to defer their compensation, including amounts in excess of the tax law limit, under our nonqualified Deferred Compensation Plan. We also make profit sharing contributions under the Deferred Compensation Plan with respect to salary and annual cash incentive award of any eligible employee that exceeds the tax law limit, and for fiscal 2020 these contributions were equal to 0% of the total salary and annual cash incentive award of each Named Executive Officer in excess of $280,000. These contributions under the Deferred Compensation Plan allow our Named Executive Officers and other highly compensated employees to receive profit sharing contributions in the same percentage as our other employees. We do not match deferrals to


2020 PROXY STATEMENT 37


the Deferred Compensation Plan. Balances in the Deferred Compensation Plan, including the balances of the Named Executive Officers, are unsecured and at-risk, meaning that the balances may be forfeited in the event of the Company’s financial distress, such as bankruptcy. Fiscal 2020 matching and profit sharing contributions to the Named Executive Officers under the qualified and nonqualified plans are included in the All Other Compensation column in the Summary Compensation Table on page 43.
EMPLOYEE STOCK PURCHASE PLAN
Our Employee Stock Purchase Plan allows eligible employees in the United States and in many countries outside of the United States, including the Named Executive Officers, to purchase Class B Stock through payroll deductions at a 15% discount to the market price on the first or last trading day of the six-month purchase period, depending on which day the stock price was lower. In fiscal 2020, all of our Named Executive Officers participated in our Employee Stock Purchase Plan, with the exception of Messrs. Donahoe and Parker.
PERQUISITES AND OTHER BENEFITS
Our executive compensation program includes limited perquisites and other personal benefits for our Named Executive Officers, which generally consist of home security and financial planning services. In addition, our CEO and Executive Chairman are entitled to limited personal use of Company aircraft, primarily pursuant to time sharing agreements, which is intended to increase the security, availability, and productivity of these individuals, and enhanced charitable gift matching under our Employee Matching Gift Program, with an annual contribution limit of $1,000,000 and Company matching on a 4:1 basis. Finally, given the nature of our business, from time to time certain Company employees, including certain executive officers, may receive Company product, event tickets, or travel benefits that are not generally offered to all employees. We do not provide any tax gross-ups on perquisites to our executive officers. Greater detail about the perquisites and personal benefits provided to our Named Executive Officers in fiscal 2020 is provided in the footnotes to the Summary Compensation Table on page 43.
NON-COMPETITION AGREEMENTS
In exchange for non-competition agreements from each of our Named Executive Officers, we have agreed to provide monthly payments during the non-compete period following termination of employment, as described in the section below titled "Executive Compensation Tables—Potential Payments upon Termination or Change-in-Control". We believe that it is appropriate to compensate individuals to refrain from working with competitors following termination, and that compensation enhances the enforceability of such agreements.
LETTER AGREEMENTS
In connection with the CEO transition, we entered into letter agreements with each of Mr. Donahoe and Mr. Parker. Other than these two letter agreements, we do not have employment contracts with any of our executive officers.
Mr. Donahoe's letter agreement sets forth the terms of his target annual direct compensation—consisting of a base salary of $1,500,000, a PSP target award of $3,000,000, and a long-term incentive target award of $14,000,000 in the forms and on the terms determined by the Compensation Committee from time to time—and his enhanced charitable gift matching under our Employee Matching Gift Program as described in the section above titled "Perquisites and Other Benefits". In addition, the letter agreement specifies that, for fiscal 2020, Mr. Donahoe's long-term incentive award will consist of the LTIP and long-term stock-based incentive awards described above in the sections titled "Long-Term Cash Incentive" and "Long-Term Stock Incentive". Mr. Donahoe's letter agreement also provides for the one-time incentive-based transition grants and sign-on awards described in the section above titled "Leadership Transitions".
Mr. Parker's letter agreement provides for the one-time transition-period cash incentive award described in the section above titled "Leadership Transitions" and the enhanced charitable gift matching under our Employee Matching Gift Program as described in the section above titled "Perquisites and Other Benefits". His letter agreement also states that his fiscal 2020 target annual direct compensation would remain unchanged following his transition to the role of Executive Chairman.


38 NIKE, INC.


OUR COMPENSATION PROCESS
COMPENSATION COMMITTEE
The Compensation Committee oversees our executive compensation program, including determining the value and composition of the compensation package for each of our executive officers and setting annual performance goals for the CEO. In addition to any special actions the Compensation Committee may take throughout the year, the committee generally acts with respect to compensation for our Named Executive Officers during the fiscal year as follows:
compcommitteeprocess.jpg
During fiscal 2020, the Compensation Committee also determined certain compensation arrangements and special one-time grants of incentive-based and stock-based compensation in connection with executive team changes, as described in the sections above titled "Leadership Transitions" and "Compensation of Our Named Executive Officers—Other Compensation—Letter Agreements". In addition, in the first quarter of fiscal 2021, the Compensation Committee made certain determinations with respect to incentive compensation in response to the COVID-19 pandemic, as described in the sections above titled "Compensation of Our Named Executive Officers—Long-Term Cash Incentive—Fiscal 2020 – 2022 LTIP Award Grants" and "Compensation of Our Named Executive Officers—Cash Bonus". The Compensation Committee will continue to monitor the impact of COVID-19 and, if applicable, consider whether further changes are appropriate.
SAY-ON-PAY RESULTS
In making determinations regarding our executive compensation program, including the compensation of our Named Executive Officers, the Compensation Committee considers shareholders' response to the non-binding advisory proposal regarding NEO compensation (the "say-on-pay proposal"). At the 2019 annual meeting, the say-on-pay proposal was approved by approximately 97% of votes cast. The Compensation Committee believes that this affirms shareholders' support of our executive compensation program and the committee's decisions.
PEER GROUP
Given the competitive market for top-tier talent, the Compensation Committee uses a peer group (consisting of companies with similar revenue size, market capitalization, brand value, products, or markets, or with which we compete for executive talent) to provide a reference for assessing executive compensation levels and practices. The following companies constituted our fiscal 2020 peer group:


2020 PROXY STATEMENT 39


The Coca-Cola Company
Kimberly-Clark Corporation
Procter & Gamble Company
Colgate-Palmolive Company
Macy’s, Inc.
Starbucks Corporation
Comcast Corporation
McDonald’s Corporation
Target Corporation
FedEx Corporation
Microsoft Corporation
TJX Companies
The Gap, Inc.
Mondelez International, Inc.
The Walt Disney Company
Kellogg Company
Pepsico, Inc.
 
In November 2019, we conducted our regular periodic peer group review. Based on the criteria described above, we determined that for purposes of setting fiscal 2021 executive compensation, the peer group above should be revised to include American Express, Best Buy, and Oracle, and to remove FedEx and Macy’s.
In addition to considering our peer group, the Compensation Committee also uses market survey data from third parties, including Aon Hewitt and Willis Towers Watson, about a broader range of companies. The Compensation Committee generally does not set executive compensation at or near any particular percentile of peer group, or market, compensation. Instead, the committee considers compensation to be competitive if it is generally within a reasonable range of market median.
ROLE OF MANAGEMENT
The CEO makes compensation recommendations to, and participates in discussions with, the Compensation Committee regarding the compensation of each executive officer other than himself. In addition, our human resources staff regularly provides data, analysis, and recommendations to the committee regarding executive compensation.
The Compensation Committee meets regularly in executive session without the CEO or other management present to discuss our executive compensation program. Such executive sessions include discussions about, among other topics, the CEO's performance and compensation and the design and operation of our executive compensation plans.
ROLE OF COMPENSATION CONSULTANT
The Compensation Committee has the authority, in its sole discretion, to retain compensation consultants to assist the committee in overseeing our executive compensation program. For fiscal 2020, the Compensation Committee retained Mercer as a consultant to provide independent analytical and evaluative advice regarding the Company's current or proposed compensation arrangements for senior executives, succession planning, and related market practices, including with respect to the CEO transition and Mr. Donahoe's annual and transition-related compensation. The committee assessed Mercer's independence in connection with this engagement, including considering a written statement from Mercer confirming its independence based on factors specified in SEC and NYSE rules, and determined that Mercer is an independent adviser. The fees for Mercer’s engagement by the Compensation Committee relating to the amount or form of executive compensation were approximately $25,000. During fiscal 2020, Mercer also provided certain services to the Company at the request of management, including investment consulting, employee benefits consulting, and various compensation and benefits surveys. The fees for such additional services were approximately $935,000.
In addition, our human resources staff obtains surveys and reports containing competitive market data from Aon Hewitt and Willis Towers Watson. This information is used by the Compensation Committee and management to supplement peer group data in connection with executive compensation program analysis and decision making.
OTHER COMPENSATION PRACTICES
STOCK OWNERSHIP GUIDELINES
We maintain stock ownership guidelines for executive officers that are designed to further align the interests of our executive officers with those of our shareholders. Under the guidelines, each executive officer is required to hold NIKE stock valued at the following multiple of their annual base salary:
POSITION
OWNERSHIP LEVEL
 
Chief Executive Officer
ownershiplvl6x.jpg
6X Base Salary
Other Named Executive Officers
ownershiplvl3x.jpg
3X Base Salary
Other Executive Officers
ownershiplvl2x.jpg
2X Base Salary


40 NIKE, INC.


New officers are required to attain these ownership levels within five years of their appointment. As of May 31, 2020, the CEO, each other Named Executive Officer, and each of our other executive officers has met or is on track to meet the applicable ownership guideline within the requisite period.
HEDGING AND PLEDGING
The Company’s Blackout and Pre-clearance Policy (which supplements our Insider Trading Policy) prohibits directors, executive officers, and other designated insiders (based on seniority and department) from engaging in transactions involving hedging, monetization or short sales of NIKE stock, including zero-cost collars and forward sale contracts. The policy also requires directors, executive officers, and designated insiders to obtain pre-approval from the Company’s Clearance Director before pledging NIKE stock. Before granting approval of any pledge, the Clearance Director considers the size of the pledge relative to the individual’s other holdings, both direct and indirect, and NIKE’s shares outstanding; the risk of foreclosure given the nature of the associated transaction; protections against the appearance of insider trading, including prohibitions on sales during trading black-outs; and the ability to timely report sales on Form 4.
CHANGE-IN-CONTROL PROVISIONS
Neither PSP nor LTIP awards are subject to acceleration upon a change in control. Stock option, RSU, and restricted stock awards are subject only to "double-trigger" accelerated change-in-control vesting, meaning that vesting is accelerated only if there is a change in control of the Company, and within the following two years, either the acquiring entity fails to assume the awards or the employee’s employment is terminated by the acquirer without cause or by the employee for good reason. This double-trigger acceleration is intended to encourage executive retention through a period of uncertainty. The Compensation Committee believes that this approach will enhance shareholder value in the context of an acquisition and align executives' interests with those of investors. The effect of change-in-control transactions on stock-based awards is described further in the section below titled "Executive Compensation Tables—Potential Payments Upon Termination or Change-in-Control".
CLAWBACK
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, 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. In addition to the clawback policy, the PSP, LTIP and Stock Incentive Plan 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.
RISK ASSESSMENT
At the Compensation Committee’s request, in fiscal 2020, management prepared and discussed with the committee an assessment of potential risk associated with the Company’s 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 employee 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 stock options (and no accelerated vesting of RSUs) upon termination of employment, and provided for only double-trigger accelerated vesting of stock-based awards upon a change in control.
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". Prior to the adoption of the Tax Cuts and Jobs Act (the "TCJA") in 2017, the Internal Revenue Code provided an exception to this limit for compensation constituting "qualified performance-based compensation". Except with respect to certain arrangements in place on November 2, 2017, the TCJA repealed this exclusion, and therefore compensation paid to "covered employees" in excess of $1 million generally will no longer be deductible. Prior to the TCJA, the Compensation Committee considered, among other things, the impact of the exclusion for "qualified performance-


2020 PROXY STATEMENT 41


based compensation" when developing and implementing our executive compensation program. Annual cash incentive awards under our PSP, long-term cash incentive awards under our LTIP, and stock option awards under our Stock Incentive Plan were designed in a manner intended to meet the requirements under the exclusion, although we could not guarantee such treatment given the complex nature of the performance-based compensation requirements.
While the Compensation Committee seeks to preserve tax deductibility in developing and implementing our 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. 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 review and discussions, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this proxy statement.
Members of the Compensation Committee:
Timothy D. Cook, Chair
Cathleen A. Benko
Elizabeth J. Comstock


42 NIKE, INC.


EXECUTIVE COMPENSATION TABLES
SUMMARY COMPENSATION TABLE
The following table sets forth information concerning compensation for fiscal 2018-2020 paid to or earned by our Named Executive Officers.
NAME AND PRINCIPAL
POSITION
YEAR
SALARY
($)
BONUS(1)
($)

STOCK
AWARDS
(2)
($)
OPTION
AWARDS
(3) 
($)
NON-EQUITY
INCENTIVE PLAN
COMPENSATION
(4) 
($)
ALL OTHER
COMPENSATION
(5) 
($)
TOTAL
($)
John J. Donahoe II(6)
President and Chief Executive Officer
2020
548,077
6,750,000

21,275,073
23,241,515
1,685,315
53,499,980
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mark G. Parker
Executive Chairman and Former President and Chief Executive Officer
2020
1,700,000
6,025,000

4,000,067
5,540,572
930,634
18,196,273
2019
1,676,923

5,000,012
3,052,000
4,091,695
147,392
13,968,022
2018
1,550,000
1,295,000

3,500,020
1,618,650
1,295,000
208,790
9,467,460
Matthew Friend(6)
Executive Vice President and Chief Financial Officer
2020
659,092
1,576,800

400,057
661,621
14,000
3,311,570
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Andrew Campion 
Chief Operating Officer and Former Chief Financial Officer
2020
1,092,308
2,070,000

1,160,023
1,606,771
9,375
5,938,477
2019
1,038,461

1,150,073
1,395,200
1,266,925
32,049
4,882,708
2018
963,462
277,500

7,000,040
735,750
277,500
63,514
9,317,766
Hilary K. Krane
Executive Vice President, Chief Administrative Officer & General Counsel
2020
1,092,308
2,070,000

1,160,023
1,606,771
14,000
5,943,102
2019
1,026,923

1,150,073
1,395,200
1,252,850
31,846
4,856,892
2018
892,308
185,000

4,850,042
686,700
185,000
58,524
6,857,574
Monique Matheson(6)
Executive Vice President, Global Human Resources
2020
1,073,077
2,070,000

1,160,023
1,606,771
14,000
5,923,871
John F. Slusher
Executive Vice President, Global Sports Marketing
2020
1,073,077
2,070,000

1,160,023
1,606,771
14,000
5,923,871
2019
921,154

850,071
1,308,000
1,123,810
33,862
4,236,897
2018
900,000
185,000

4,750,044
686,700
185,000
59,715
6,766,459
Elliott J. Hill(6)
Former President, Consumer & Marketplace
2020
1,192,308
2,190,000

1,300,080
1,800,684
33,506
6,516,578
2019
1,119,738

1,250,022
1,569,600
1,366,085
69,968
5,375,413
 
 
 
 
 
 
 
 
Eric D. Sprunk
Former Chief Operating Officer
2020
1,192,308
2,190,000

1,300,080
1,800,684
14,000
6,497,072
2019
1,142,308

1,250,022
1,569,600
1,393,620
33,879
5,389,429
2018
1,092,308
277,500

7,000,040
833,850
277,500
80,560
9,561,758

(1)
For fiscal 2020, represents discretionary cash bonuses awarded to executive officers to approximate the short- and long-term cash incentive payouts received by non-executive officers. Due to the impact of COVID-19 on our incentive plans, the executive officers received 0% payouts under each of the fiscal 2020 PSP and fiscal 2018-2020 LTIP, while non-executive officers received higher payouts under the fiscal 2020 annual bonus plan and fiscal 2018-2020 LTIP to approximate Company performance during the pre-pandemic portion of the applicable performance period. For fiscal 2018, represents discretionary cash bonuses awarded to certain executive officers to normalize their compensation to that of non-executive officers. The non-executive officers received a higher payout under the fiscal 2016-2018 LTIP because their payout was able to be adjusted for the impact of the Tax Cuts and Jobs Act.
(2)
Represents the grant date fair value of restricted stock and RSU awards granted in the applicable fiscal year computed in accordance with accounting guidance applicable to stock-based compensation. The grant date fair value is based on the closing market price of our Class B Stock on the grant date.
(3)
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 values of options under applicable accounting guidance 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.
(4)
Non-Equity Incentive Plan Compensation consists of the following:


2020 PROXY STATEMENT 43


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.


44 NIKE, INC.


GRANTS OF PLAN-BASED AWARDS IN FISCAL 2020
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, and stock options granted to the Named Executive Officers in fiscal 2020.
 
 
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 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


2020 PROXY STATEMENT 45


EBIT for fiscal 2020 (earnings before interest and taxes, excluding the effect of acquisitions, divestitures, accounting changes, restructurings, unanticipated exchange rate fluctuations 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. Actual award payouts earned in fiscal 2020 and paid in fiscal 2021 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.
OUTSTANDING EQUITY AWARDS AT MAY 31, 2020
The following table sets forth information concerning outstanding stock options and unvested restricted stock and RSUs held by the Named Executive Officers at May 31, 2020.
 
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