Nike (NYSE: NKE) lost $ 790 million in the last quarter, due to the effects of COVID-19. It did what most retailers have done recently. Cut or plan to cut jobs.
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Part of Nike’s comment on the program is that it wants to start “building a flatter, more agile company.” Thousands of Nike workers will almost certainly be kicked out the door.
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Nike’s new CEO, John Donahoe, on the other hand, has done surprisingly well. When he joined Nike in January, he received a “signing bonus” worth up to $ 45 million in cash and shares. You can earn up to $ 18.5 million in your first year on the job.
The median salary for Nike employees last year was $ 25,386.
Families of four with an income of $ 26,200 or less live below the poverty line.
For the quarter ended May 31, Nike had a brutally bad quarter. Revenue fell 38% to $ 6.3 billion. Ninety percent of its stores closed for eight weeks due to the pandemic. As of the earnings announcement, 90% of Nike stores were open. Its retail traffic was improving. Nike’s balance was in excellent shape. He had $ 8.3 billion in cash and cash equivalents.
Donahoe can fairly say that the company did not perform well before the pandemic. If this were not the opinion of the board, he would not have been hired. You can also claim that a drop in results due to the pandemic is not your fault either. What he cannot say is that he has shared the pain that will be part of the firing of thousands of workers, most of them poorly paid, who will find it extremely difficult to get new jobs.
Does Donahoe have a financial or moral obligation to contribute to the company with any of its incredible compensation? The answer to those questions is “no”. But, he might consider doing it anyway.
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