Nike, Inc. told employees they would receive less than their target annual bonuses after a year in which the company’s performance missed expectations, according to an internal memo reviewed by Bloomberg.
CEO Elliott Hill said, “Global employees would receive 74 percent on average of their target bonus, although payouts would vary by region.” Employees in North America “will receive 92 percent of their target bonus as the region delivered 5 percent growth in Nike’s fiscal year ended May 31, marking the top performance among regions.” In Greater China, where sales fell 13 percent on a currency-neutral basis in the year, “employees will receive 56 percent of their potential bonus payout.”
“This year took real work,” Hill said in a memo reviewed by Bloomberg. “But the results are not where we need them to be yet.
On Tuesday, June 31, Nike reported results for the fourth quarter that exceeded analyst targets. However, the sports giant slightly lowered its sales guidance for the year, citing continued weakness in China and worsening trends in its Sportswear and Jordan businesses. Sales for the year were flat on a reported basis and down 2 percent on a currency-neutral basis
“We’re starting to see signals of our progress in performance products, wholesale, North America, and in how consumers are responding when we lead with sport,” Hill wrote. “We need to turn the progress we have made into consistent performance.”
Separately, Converse employees were told in a memo from the brand’s CEO, Aaron Cain, that their bonus payouts would no longer be tied to Nike’s results, and instead would only reflect the performance of the Converse brand. Converse’s sales were down 32 percent on a currency-neutral basis, due to declines across all territories.
Image courtesy Nike, Inc.
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For additional coverage of Nike’s fiscal fourth quarter from SGB Executive, including insight and observations from Nike, Inc. CEO Elliott Hill, see below.
EXEC: Nike CEO Sees Weakness in Sportswear and Jordan Streetwear Weighing on Turnaround
