At Nike, Inc.’s annual meeting on September 12, shareholders voted against a proposal seeking a more detailed report on pay gaps across race and gender. Shareholders also rejected a proposal over the disclosure of human rights commitments.
The proposal, filed by Arjuna Capital, called for reporting median pay gaps across race and gender, including reputational, competitive and operational risks related to recruiting and retaining diverse talent.
“Actively managing pay equity is associated with improved representation, and diversity is linked to superior stock performance and return on equity,” Arjuna Capital said in its proposal.
The proposal said that 30 percent of Nike’s leadership comprises minorities, although minorities represent 60 percent of the workforce overall. Nike does not report unadjusted pay gaps, which the shareholders said would reveal the structural bias women and minorities face.
Nike did not provide the percentage of investor support the proposal received in the meeting, noting it was not approved.
In its proxy statement, Nike said its current disclosures provide shareholders with more relevant information about the company’s commitment to pay equity and increasing diversity, equity and inclusion. “Nike did not provide the percentage of investor support the proposal received in the meeting.”
Arjuna’s resolution on pay equity reporting failed for the second time since 2021 despite backing from proxy advisory firm Institutional Shareholder Services, which recommended that investors vote for the proposal in August.
The proposal received 18 percent of support in 2021.
Proposals require more than 50 percent of shareholder votes to win, but Nike is not required to adopt them. The company will disclose the final vote tally in a future U.S. Securities and Exchange Commission filing.
Shareholders also voted against a second proposal, filed by shareholder advocacy group Tulipshare, asking Nike to issue a report on whether its supply chain policies effectively address Nike’s stated equity goals and human rights commitments. The group asked Nike for information on the methodology and metrics used to track forced labor and wage theft risks as well as to consider implementing model supplier contracts developed by the American Bar Association and to assess whether its findings lead to changes in the company’s policies or decision-making.
In its proxy statement, Nike said it already discloses all of the independent contract manufacturers and the majority of material vendors used to manufacture Nike products in an interactive and publicly available Nike Manufacturing Map. Nike also requires its suppliers to source materials from vendors compliant with Nike’s Supplier Code of Conduct, Traceability Standards and Restricted Substances List.
Nike stated, “In summary, Nike continues to work tirelessly to integrate respect for people and the planet throughout Nike’s entire business, including our supply chain, and to disclose our initiatives and policies so our shareholders have meaningful insight into our progress in this area. We believe that our decades of commitment to these issues have led to effective and impactful solutions. The Board of Directors believes that the company’s policies effectively articulate our long-standing support for, and continued commitment to, human rights and sustainable sourcing, rendering the proposal ineffective and unnecessary.”
Photo courtesy Nike