Following a probe into workplace conduct that prompted an exodus of top executives, Nike has promised pay raises for some 7,500 employees.
The American sportswear maker has been working to clean up a reputedly toxic corporate culture and address numerous claims of sexual harassment and gender discrimination made by women at the company. Nearly a dozen senior executives left earlier this year, including Trevor Edwards, former president of the Nike brand and potential successor to CEO Mark Parker. “I’m committed to ensure that we have an environment where every Nike employee can have a positive experience and reach their full potential,” Parker said in March.
Nike is casting the pay raises, announced July 23, as part of its effort to bring about a corporate culture “in which employees feel included and empowered,” according to an internal staff memo. Nike said it analyses its employee compensation annually, but did “a deeper analysis of all roles, at all levels globally” this year. The company has also said it is making changes to its management training programmes, as well as its internal reporting and bonus systems.
About 10% of employees across all levels and geographies will receive pay adjustments, a company spokeswoman told Reuters. The Wall Street Journal reported that the changes to employee compensation at Nike will begin in August and be annualized over the balance of the company’s fiscal year.
Some analysts have suggested that the internal turmoil at Nike could scuttle its goal of reaching $50 billion in revenues for 2018, up from $34 billion in 2017. “Anytime you see a large group of senior people leave very quickly for any reason, you better hope they have a very strong bench that can step in quickly,” said Sam Poser, an analyst at Susquehanna Financial Group. In addition to recruiting top executives who can remake its culture, Nike may also need to make somewhat of a shift away from its traditional sports-athlete focus to the women’s and “athleisure” markets.
Referencing the shake-up at Nike, the New York Times noted the rarity of such an overhaul, saying it “has been seen as an illustration of how pressure from employees is forcing even huge companies to quickly address workplace problems.” Increasing attention to gender and racial pay inequities is prompting changes at other companies as well. More than 100, including AT&T, Gap, MasterCard and Target, have pledged to review salaries and work to close gaps.
