XML 47 R18.htm IDEA: XBRL DOCUMENT v3.25.2
COMMON STOCK AND STOCK-BASED COMPENSATION
 12 Months Ended
May 31, 2025
Share-Based Payment Arrangement, Noncash Expense [Abstract]  
COMMON STOCK AND STOCK-BASED COMPENSATION
NOTE 9 — COMMON STOCK AND STOCK-BASED COMPENSATION
COMMON STOCK
The authorized number of shares of Class A Common Stock, no par value, and Class B Common Stock, no par value, are 400 million and 2,400 million, respectively. Each share of Class A Common Stock is convertible into one share of Class B Common Stock. Voting rights of Class B Common Stock are limited in certain circumstances with respect to the election of directors. There are no differences in the dividend and liquidation preferences or participation rights of the holders of Class A and Class B Common Stock. From time to time, the Company's Board of Directors authorizes share repurchase programs for the repurchase of Class B Common Stock. The value of repurchased shares is deducted from Total shareholders' equity through allocation to Capital in excess of stated value and Retained earnings (deficit).
STOCK-BASED COMPENSATION
The NIKE, Inc. Stock Incentive Plan (the "Stock Incentive Plan") provides for the issuance of up to 798 million previously unissued shares of Class B Common Stock in connection with equity awards granted under the Stock Incentive Plan. The Stock Incentive Plan authorizes the grant of non-statutory stock options, incentive stock options, stock appreciation rights, and stock awards, including restricted stock and restricted stock units. Restricted stock units include both time-vesting restricted stock units ("RSUs") as well as performance-based restricted stock units ("PSUs"). A committee of the Board of Directors administers the Stock Incentive Plan and has the authority to determine the employees to whom awards will be made, the amount of the awards and the other terms and conditions of the awards. The Company generally grants stock options, restricted stock and restricted stock units on an annual basis. The exercise price for stock options and stock appreciation rights may not be less than the fair market value of the underlying shares on the date of grant. Substantially all awards under the Stock Incentive Plan vest ratably over 4 years of continued employment, with stock options expiring 10 years from the date of grant.
The following table summarizes the Company's total stock-based compensation expense recognized in Cost of sales or Operating overhead expense, as applicable: 
 YEAR ENDED MAY 31,
(Dollars in millions)
202520242023
Stock options(1)
$292 $336 $311 
ESPPs69 69 72 
Restricted stock and restricted stock units(1)(2)
348 399 372 
TOTAL STOCK-BASED COMPENSATION EXPENSE$709 $804 $755 
(1)Expense for stock options includes the expense associated with stock appreciation rights.
(2)For the fiscal years ended May 31, 2025, 2024 and 2023, expense for restricted stock units includes an immaterial amount of expense for PSUs.
STOCK OPTIONS
The weighted average fair value per share of stock options granted during the fiscal years ended May 31, 2025, 2024 and 2023, computed as of the grant date using the Black-Scholes pricing model, was $25.90, $32.78 and $31.31, respectively. The weighted average assumptions used to estimate these fair values were as follows:
 YEAR ENDED MAY 31,
202520242023
Dividend yield1.6 %1.2 %0.9 %
Expected volatility31.1 %29.3 %27.1 %
Weighted average expected life (in years)6.05.85.8
Risk-free interest rate3.8 %4.3 %3.3 %
Expected volatilities are based on an analysis of the historical volatility of the Company's common stock, the implied volatility in market traded options on the Company's common stock with a term greater than one year, as well as other factors. The weighted average expected life of options is based on an analysis of historical and expected future exercise patterns. The interest rate is based on the U.S. Treasury (constant maturity) risk-free rate in effect at the date of grant for periods corresponding with the expected term of the options.
The following summarizes the stock option transactions under the plan discussed above: 
SHARES(1)
WEIGHTED AVERAGE OPTION PRICE
(In millions)
Options outstanding as of May 31, 202473.7 $98.10 
Exercised(5.4)58.50 
Forfeited(6.5)101.93 
Granted13.3 83.20 
Options outstanding as of May 31, 202575.1 $97.99 
(1)Includes stock appreciation rights transactions.
Options exercisable as of May 31, 2025 were 49.8 million and had a weighted average option price of $98.00 per share. The aggregate intrinsic value for options outstanding and exercisable as of May 31, 2025 was $20 million and $20 million, respectively. The total intrinsic value of the options exercised during the years ended May 31, 2025, 2024 and 2023 was $120 million, $305 million and $438 million, respectively. The intrinsic value is the amount by which the market value of the underlying stock exceeds the exercise price of the options. The weighted average contractual life remaining for options outstanding and options exercisable as of May 31, 2025 was 5.4 years and 3.9 years, respectively. As of May 31, 2025, the Company had $400 million of unrecognized compensation costs from stock options, net of estimated forfeitures, to be recognized in Cost of sales or Operating overhead expense, as applicable, over a weighted average remaining period of 2.4 years.
EMPLOYEE STOCK PURCHASE PLANS
In addition to the Stock Incentive Plan, the Company gives employees the right to purchase shares at a discount from the market price under ESPPs. Subject to the annual statutory limit, employees are eligible to participate through payroll deductions of up to 10% of their compensation. At the end of each six-month offering period, shares are purchased by the participants at 85% of the lower of the fair market value at the beginning or the end of the offering period. Employees purchased 3.6 million, 3.1 million and 3.0 million shares during each of the fiscal years ended May 31, 2025, 2024 and 2023, respectively.
RESTRICTED STOCK AND RESTRICTED STOCK UNITS
Recipients of restricted stock are entitled to cash dividends and to vote their respective shares throughout the period of restriction. Recipients of restricted stock units, which includes RSUs and PSUs, are entitled to dividend equivalent cash payments upon vesting. The number of shares of restricted stock and restricted stock units vested includes shares of common stock withheld by the Company on behalf of employees to satisfy the minimum statutory tax withholding requirements.
The following summarizes the restricted stock and restricted stock units transactions under the plan discussed above: 
SHARES(1)
WEIGHTED AVERAGE GRANT DATE
FAIR VALUE
(In millions)
Nonvested as of May 31, 20249.1 $117.52
Vested(3.3)116.76
Forfeited(1.7)105.68
Granted6.6 82.32
Nonvested as of May 31, 202510.7 $94.29
(1) Includes an immaterial amount of PSU transactions
The weighted average fair value per share of restricted stock and restricted stock units granted for the fiscal years ended May 31, 2025, 2024 and 2023, computed as of the grant date, was $82.32, $103.13 and $115.56, respectively. During the fiscal years ended May 31, 2025, 2024 and 2023, the aggregate fair value of vested restricted stock and restricted stock units was $221 million, $340 million and $250 million, respectively, computed as of the date of vesting.
As of May 31, 2025, the Company had $631 million of unrecognized compensation costs from restricted stock and restricted stock units, net of estimated forfeitures, to be recognized in Cost of sales or Operating overhead expense, as applicable, over a weighted average remaining period of 2.5 years.