Nike has voted down proposals by outside shareholder groups that it provide more transparency on pay equity, hiring along gender and racial lines and human rights impact assessments, because the company believes it is making progress on its homegrown diversity and inclusion initiatives.
During its virtual annual shareholders meeting Wednesday, the sports giant did not approve a proposal submitted by As You Sow, which would have required Nike to report annually details about its diversity and inclusion efforts. Similarly, a proposal by Arjuna Capital that the company report median pay gaps across race and gender was also voted down. A human rights impact assessment proposal from Domini Impact Equity Fund and others requesting Nike publish the actual and potential human rights impacts of its cotton sourcing practices, as well as one from Newground Social Investment on the size and identify of its political contributions, were also not approved by shareholders.
Instead, the meeting was a buttoned-up and carefully prepared hour-long event that proceeded to shine a positive light on Nike’s current business and practices. In his remarks, chief executive officer John Donahoe spoke at length about the competitive advantage the company has as a result of its continued commitment to innovation and its close connection with consumers. And although he acknowledged “unprecedented” challenges in the macro-environment due to the pandemic, he said Nike “continued to deliver.”
In June, revenues for the three-month period ended May 31 increased 96 percent to $12.3 billion, up from $6.3 billion a year ago. For the full fiscal year, revenues were $44.5 billion, compared with $37.4 billion last year. Nike logged $1.5 billion in profits during the quarter, compared with losses of $790 million a year ago, and more than $5.7 billion in profits for the year, up from $2.5 billion in 2020’s fiscal year.
Addressing some of the social issues, Donahoe did say that “minorities” now account for 29 percent of Nike’s U.S. leadership team and women now represent 49.5 percent of the company’s global workforce. Donahoe did not further specify what constitutes “minorities.” He said while Nike still has a lot of work to do, it is making progress toward its goal of greater racial and social justice. “At Nike, we always say, there is no finish line,” he said.
Toward that end, Donahoe spoke about the company’s ongoing efforts, which include a 10-year, $100 million donation from Michael Jordan and its Jordan Brand, launched last June, to impact the fight against systemic racism.
While not addressing a high-profile dispute brought up in one of the shareholder proposals about Olympian Allyson Felix — who was asked to take a pay cut when she was pregnant, a policy Nike quickly amended to guarantee pay and bonuses for female athletes for 18 months around pregnancy — Donahoe instead pointed to Naomi Osaka’s Play Academy, an organization it created with the tennis player that works with local grassroots groups to change girls’ lives through sport.
In other moves designed to support women, he also brought up the Pegasus 38, a sneaker that was redesigned with input from female athletes and specifically targeted to women. Even so, women’s product currently accounts for a mere 22 percent of Nike’s overall sales.
Turning to the less-controversial business end of the company, Donahoe also spoke about Nike’s continued emphasis on digital, which now accounts for more than 20 percent of the company’s overall business and the expectation that it will double by fiscal year 2025. He also said he’s hopeful that the situation in China, where Nike has operated for 40 years, will continue to improve, and while the company is not immune to the global supply chain issues negatively impacting the fashion industry, it has the agility to navigate the issues until they get better, company executives said.
By: jeanpalmieri2014
