Nike shareholders push for more reporting on pay equity
By Katherine Masters, August 24, 2023
Proxy advisory firm Institutional Shareholder Services recommended on Wednesday that Nike investors vote for a resolution calling on the company to disclose more data on pay equity for female and minority employees.
Massachusetts-based investment adviser Arjuna Capital, a regular submitter of shareholder resolutions, filed the proposal with the Securities and Exchange Commission in late July.
The firm asked Nike for an annual report on median earning gaps for female and minority employees, stating that the report should include the company's associated wage policy and "risks related to recruiting and retaining diverse talent."
In a report published ahead of Nike's Sept. 12 shareholder meeting, ISS wrote that the proposal would allow investors to "compare and measure the progress of the company's diversity and inclusion initiatives." The advisory firm previously recommended against a similar proposal filed by Arjuna in 2021.
Nike did not immediately respond to a request for comment, but the company's Board of Directors is recommending that shareholders vote against the proposal, according to its annual report.
The board stated that the company's disclosures and annual Impact Report "provide our shareholders with more relevant information about Nike's pay equity and increasing diversity, equity and inclusion at all levels of the company than the requested measure."
Glass Lewis, another proxy advisory firm, also recommended voting against the proposal on Wednesday.
Nike already discloses statistically adjusted pay gaps, which examine differences in earnings between male and female workers, and white and non-white workers, with similar positions and levels of experience.
However, the company does not currently report on median pay gaps, which compare the median wages of minority and female employees with non-minority and male employees, often as a percentage difference.
Such disclosures are required in the United Kingdom, and Nike does report on median pay gaps among its UK employees. In the United States, companies including Citigroup, Adobe, Starbucks and Lowe's have adopted the reporting measure.
"The fact is that the standard of disclosure has changed, and Nike is no longer being fully transparent," said Natasha Lamb, chief investment officer for Arjuna.
The resolution filed by Arjuna in 2021 won support from only 17.6% of shareholders, with major institutional investors such as BlackRock voting against the proposal.
Nike has set multiple environmental, social, and corporate governance targets for 2025, including 100% pay equity and expanding the representation of racial and ethnic minorities in director-level roles and above.
However, the company is still grappling with a gender discrimination lawsuit filed by former employees who alleged that Nike paid and promoted women less than male workers. The firm has not responded to a request for comment on the lawsuit.
A separate shareholder resolution also up for vote in September calls on Nike to offer transparency on working conditions in its supply chain.
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