COMPENSATION

Your compensation at Nike comes in 3 forms:

• Base: Your annual salary, paid bi-monthly over the course of the year.
• Performance Sharing Plan (PSP): For those eligible, This cash bonus targets 5-30% of your salary based on Nike’s performance over the prior fiscal year (June-May).
• Stock Compensation: Your annual stock award is paid out in August and you can elect to take it in RSUs and Stock Options or a 50/50 mix of both. 4 stock options are given for each RSU share awarded. For more on this decision, see the next section.

RSUs vs. OPTIONS

Each year, eligible Nike employees must elect to take their stock compensation in one three options: 100% Stock Options, 100% RSUs of a 50/50 mix of Options and RSUs.

Stock options are given out in a 4:1 ratio to RSU so for every 1 RSU share, you’ll receive 4 stock options.

So, which is right for you?

Here’s a quick summary of the key factors:

	Nike RSUs	Nike Stock Options
Return	Doesn’t require an increase in stock prices. Still worth something if the stock declines.	Requires an increase in stock price (Above your strike price) to be profitable
Risk	Less risky than options.	Higher risk - can be worth a lot, or nothing.
Taxes	Taxed as ordinary income at vesting date.	Taxed as ordinary income, but not until you exercise the options

NIKE 401(K) & MEGA BACKDOOR ROTH

The 401(k) and the Mega Backdoor Roth within it are some of the most valuable Nike benefits available to employees. Here’s what you need to know.

How much can I contribute to my Nike 401(k) in 2023?

• For those under 50, you can contribute $22,500
• For those 50 and older, you can contribute $30,000 ($22,500 + a $7,500 catch-up contribution)

What is the Nike 401(k) match amount?

• Nike matches up to 5% of your annual salary.
• This is free money! To receive the full match, make sure to contribute at least 5% of your salary.

How much can I contribute to the Nike Mega Backdoor Roth? (And what the heck is a Mega Backdoor Roth, anyway?)

• A Mega Backdoor Roth allows you to contribute after-tax dollars to your 401(k) and immediately convert those to a tax-free Roth account
• This doesn’t reduce taxes today but can give you a valuable tax-free source of income in retirement
• At Nike, you can contribute 3% of your annual salary to the Mega Backdoor Roth, with a cap on total contributions in 2023 at $9,900

To summarize, a Nike employee making $200,000 per year could contribute the following to their 401(k) and Mega Backdoor Roth accounts.

• 401(k) contribution: $22,500 (Must contribute 11.25% of your salary to max it out)
• This doesn’t reduce taxes today but can give you a valuable tax-free source of income in retirement
• At Nike, you can contribute 3% of your annual salary to the Mega Backdoor Roth, with a cap on total contributions in 2023 at $9,900
• At Nike, you can contribute 3% of your annual salary to the Mega Backdoor Roth, with a cap on total contributions in 2023 at $9,900

DEFERRED COMPENSATION

The Deferred Compensation plan is another valuable Nike benefit to grow your savings and help save on taxes.

To summarize, a Nike employee making $200,000 per year could contribute the following to their 401(k) and Mega Backdoor Roth accounts.

• You can defer Salary or bonus into the plan, helping reduce your tax bill today.
• Contributions are invested and grow tax-deferred.
• Based on the distribution schedule you elect, money in the plan is paid out (and taxed) at a future date.
• Your money in the Deferred Compensation plan is an unsecured liability of Nike.
• This is a powerful tool, but make sure you understand the risks and trade-off’s.

How much can I contribute to the Nike Deferred Compensation plan?

• Up to 75% of next year's base salary?
• Up to 100% of next year’s bonus (PSP)
• Contribution are set during the fall open enrollment period

Who is eligible for Deferred Compensation at Nike?

• Employees earning $150k of base compensation or more are eligible for the Deferred Compensation plan at Nike.

ESPP

The ESPP (Employee Stock Purchase Plan) is a valuable Nike benefit that enables eligible employees to buy Nike stock at a discount, providing an opportunity to earn “free money.”

How does the ESPP work at Nike?

• The enrollment period for ESPP at Nike is every six months (in March and September)
• Employees can buy shares at a 15% discount using a “Lookback Period.” Shares are purchased based on the price either at the beginning of the enrollment period (the Offering or Grant Date) or the end of the period (the Exercise or Purchase Date), whichever is lower.
• This means your discount on Nike shares will always be at least 15% to the current stock price and potentially more if the stock price rises during the offering period.

How much can I contribute to the Nike ESPP?

• You can contribute 10% of your pay to purchase shares of Nike stock. Purchases are capped at the lesser of $25,000 or 500 shares of Nike stock during every semi-annual offering period.

At the end of the day, the decisions you make about your Nike benefits are personal and should reflect your unique needs and priorities. But by taking the time to understand your options and make informed decisions, you can maximize your Nike benefits and build a fulfilling life both inside and outside of work.

If you want to proactively manage your Nike benefits and make the most of your employment experience, consider reaching out to a Cordant advisor today. They can help you navigate the complexity of your options and make informed decisions that align with your goals and aspirations.

This information is supplied from sources we believe to be reliable. However, this information is subject to change without notice, and we cannot guarantee its accuracy. Please reach out to your benefits department for the most up-to-date information. Cordant is not affiliated with Nike.