This video will help you understand how you get paid at Nike. It will help new employees and individuals interested in working at Nike gain a better understanding of what their compensation structure could look like.
How are Nike employees paid? (The facts)
Nike employees receive their compensation in the following ways: base salary, annual cash bonuses, and stock grants, which come in the form of Restricted Stock Units (RSUs) and Restricted Stock Awards (RSAs).
Base salary: The base salary for Nike employees varies greatly depending upon your role with the company. The average base salary is $100k/year. The average base salary for a director is about $165k – $300k/year. The size and frequency of sign-on bonuses also varies based on your position at Nike. New managers and professionals have reported receiving bonuses that range between $4k-$10k, if they received one at all.
Annual Cash Bonuses: The Performance Sharing Plan (PSP Bonus) is awarded during the month of August. These bonuses range between 5% – 30% of an employee’s annual salary. The bonus is based off of how well Nike meets certain profitability goals.
Stock Grants: These come in two forms: Restricted Stock Units (RSUs) and Restricted Stock Awards (RSAs). Restricted Stock Units vest 25% over 4 years. Restricted Stock Awards (RSAs) are very similar to RSUs with one major difference: RSAs vest immediately when you receive them.
How Should You Manage Your Nike RSUs and RSAs?
As mentioned, Restricted Stock Units (RSUs) are stock awards that vest over a four-year vesting schedule. Employees who are granted RSUs will receive 25 % of their vest in year one, another 25% in year two, year three, and in year four. This vesting schedule creates a cascade of RSUs to manage due to the new addition of new RSUs every year.
Your Restricted Stock Awards (RSAs) are vey similar to your RSUs, however, there is one major difference. Your RSAs will vest immediately when you receive them.
How you manage your RSUs depends on your financial situation. However, more often than not, our recommendation for individuals is to sell your shares as soon as they vest. This is because tying your investment assets (Nike stock) and your human capital, (the income you receive from Nike), to the same company can be risky. While ownership in Nike can create a sense of pride and fulfillment, remaining rational about your reliance to one company in relation to your overall financial picture may prove more pertinent to long-term success. Moreover, immediately selling your stock awards upon vesting will help you avoid building up a concentrated position of NKE stock with embedded capital gains.
If you decide to keep all or some of your shares of NKE stock as an investment, you can reduce the amount you will pay in capital gains tax by holding onto the shares for more than a year. When you hold an investment for more than a year before selling, your profit is typically considered a long-term gain and is taxed at a lower rate.
Long-term Financial Planning for Nike Employees
We encourage Nike employees to develop a strategy for managing your salary, bonuses, and stock awards based on your financial goals and needs. Please feel free to schedule time with our team to discuss any questions you may have.