Shareholders Vote Against Worker Rights Proposal
Nike shareholders have voted against a proposal to join binding agreements with supply chain workers in high-risk countries. This proposal aimed to address human rights issues more effectively. It was led by the Domini Impact Equity Fund, alongside more than 60 investors, and came after a call for Nike to pay $2.2 million in allegedly unpaid wages to garment workers in Cambodia and Thailand.
Repeated Calls for Accountability
Another proposal by Tulipshare, urging Nike to assess the effectiveness of its supply chain management regarding forced labor and wage theft, was also rejected. This marks the second consecutive year shareholders have voted against it. Last year, nearly 80% of investors opposed the measure. Nike's board had advised against both proposals, citing existing controls to manage labor issues.
Impact of Shareholder Pressure
While these results are not legally binding, significant shareholder backing can compel companies to take action. Domini's proposal requested Nike to report on the effects of adopting worker-driven social responsibility (WSR) and to explain its non-participation in the Pakistan Accord, a health and safety agreement signed by brands like Adidas and Puma.
Support and Opposition Among Major Investors
Norway's wealth fund, Nike's ninth-largest shareholder, supported the proposal and also opposed what it deemed excessive executive compensation. However, shareholders ultimately approved the executive compensation package, which included $29.2 million for CEO John Donahoe for fiscal 2024.
Future Implications for Nike
Analysts suggest a potential management shake-up, especially after Nike forecasted a surprise drop in fiscal 2025 revenue. The company faces rising competition from brands like On and Hoka, intensifying pressure on its innovation strategies.
