Nike Inc. spent roughly $104 million on John Donahoe’s pay and perks during his nearly five-year tenure as CEO of the shoe company before removing the former Bain & Co. executive in an effort to revitalize the brand.
During that time, Nike’s market value fell by nearly $40 billion.
Donahoe earned $83.6 million in salary, incentives, and stock awards, according to Bloomberg News calculations based on regulatory filings.
While the haul is not unprecedented for the CEO of a high-profile publicly traded company, it serves as a reminder of how managers can amass massive fortunes even during contentious tenures that end in their dismissal. It reached this level for Donahoe in part because Nike offered him equity awards worth $35 million to cover income he lost when he resigned from his previous employment.
Nike announced Thursday that Donahoe will retire and serve as an adviser until January, concluding a stint that saw the company flourish during the epidemic before dealing with plummeting sales and customer defections to upstart companies such as On and Hoka. He’ll be succeeded by Nike veteran Elliott Hill, who will come out of retirement to fill the position.
Nike shares rose 8% in premarket trading.
Donahoe’s figure excludes any income or capital gains taxes that he may have paid. His departure will result in the forfeiture of unvested equity awards totaling more than $5 million.
According to the filing, Hill will get an annual pay package of approximately $20 million, the majority of which will consist of stock options and shares connected to performance benchmarks. He will also receive $7 million in special prizes, given in cash and shares.
If Hill turns Nike around and the stock recovers, Donahoe will benefit. He still has more than 1.5 million stock options that will pay out if the company’s stock price increases above the thresholds for exercising them, which range from $97.61 to $167.51.
