Nike shareholders vote against workers' rights proposal

Nike shareholders voted against a proposal to consider entering into binding agreements with supply chain workers to better address human rights issues in high-risk countries at their annual meeting, the company said Tuesday.

The proposal was put forward by a group of investors led by Domini Impact Equity Fund, which was among more than 60 investors who signed a letter last year urging Nike to pay $2.2 million in allegedly unpaid wages to some 4,000 garment workers in Cambodia and Thailand.

A similar petition, led by investor Tulipshare, was filed for the second year in a row urging the company to assess the effectiveness of its supply chain management, including looking into concerns related to forced labor and wage theft.

Shareholders also voted against the proposal on Tuesday. Last year, nearly 80% of investors who voted rejected it.

Nike's board had recommended that shareholders vote against both proposals. The company said it has established robust controls to identify and address labor issues throughout its supply chain.

The results are not legally binding, but a petition supported by a significant portion of shareholders can often put pressure on a company to act.

Domini's proposal called on Nike to publish a report on the impact of adopting so-called worker-driven social responsibility, which creates binding agreements with workers on safety standards and remedies.
Domini also wanted Nike to explain why it has not joined the Pakistan Accord, a binding health and safety agreement between worker unions and brands, which peers such as Adidas, opens new tab and Puma, opens new tab have signed.

Last week, Norway's wealth fund, Nike's ninth-largest shareholder, backed the proposal and also said it would vote against Nike executive compensation, which it said had become excessive.

Shareholders ultimately backed the company's proposal to approve executive compensation. Nike CEO John Donahoe's compensation was $29.2 million for fiscal year 2024.

Wall Street analysts have raised the possibility of a management shakeup ahead of the company's November investor day, following the sportswear maker's forecast of a surprise drop in fiscal 2025 revenue.

Nike is struggling with a lag in innovation and growing competition from brands such as Roger Federer-backed On and Decker Outdoor's Hoka.