NIke profit sharing plan


Nike’s profit sharing plan appears, compared to others we have viewed, relatively appealing and shows a commitment that Nike has to its employees in helping them save for retirement. However, we offer some highlights or our critique below and have provided guidance (see specific program recommendations) to optimize the employee stock option program and the deferred compensation plan:

2017 Plan Changes

Nike changed plan sponsors in 2017.  They went from the prior sponsors Hewitt and Charles Schwab to Fidelity.  And, they kept Northern Trust as the custodian.  In our last review we "called out" one of Nike's biggest pitfalls within the plan -the way matching contributions were structured.  The matches could work unfavorably against employees who either met their maximum contribution early (maybe a big bonus) or stopped making contributions.  Nike went through the effort to fix this 'miss match,' as it was described in a 2015 Oregonian article, in this 2017 change.  The new plan has a year-end "True Up"  where any unfavorable missed matching money is reconciled to treat the employee fairly.