Nike to research executive compensation in 2022. According to
Salary.com, the Chief Executive Officer, John Donahoe II, made
$28,838,060 in total compensation. Of this unlimited $1,500,000
was received as a salary, $4,450,000 was accepted as a bonus,
$6,782,995 was received in stock options, $12,061,812 was awarded
as stock and $4,043,253 came from other types of compensation.
This information is according to proxy statements filed for the 2022
fiscal year. There are five other executives that make in the millions
according to Salary.com. b However, according to Payscale.com, the
highest paid employee with the title of Senior Product Manager has
an average annual salary of $131,289, and the next highest employee
with the total Product Developer makes an annual average wage of
$69,881. The average employee makes .4% of the executive's
compensation. Executives work long hours and some of them
sacrifice their families for their company. b Some executives are well
worth getting paid as very highly compensated employees; however,
I strongly agree that companies need to make sure that every
employee is paid fairly.
The benefits associated with compensating executives with stock or
the option to purchase stock are as follows: By awarding stocks,
companies provide the shareholders with a part of the ownership of
the company. This is taken by executives as a personal incentive that
betters the company’s performance. Their hard work usually results
in higher stock prices which allows them to cash in handsome
amounts of dollars. It is a direct relationship between the value of the
award and the performance of a company's stock price. Employees
allow part of their pay to be contingent on firm performance if they
are compensated for the corresponding risk. These are primarily used
as a talent attraction and retention strategy. It serves as a vehicle for
the owner to receive the desired liquidity without selling to a
competitor or other third parties.
The costs associated with compensating executives with stock or the
option to purchase stock are as follows: The main disadvantage of
stock options is that they dilute the profit per share of existing shares
and the ownership of outside shareholders. Obtaining valuations for
Stock options is usually a costly affair. Attorney fees: The legal team
is responsible for preparing plan documents such as trust
agreements, review of the plan’s design for legal flaws, and other
tasks. These may include representing the plan in the event of an
audit by tax or labor authorities. Recurring/Annual costs: These will
involve some ongoing annual costs for tasks such as record keeping,
distributing participant account statements, keeping up with
regulatory filings, and other administrative charges.
The most effective audit procedures to use to identify executive
compensation abuse or fraud are as follows: The auditor should
perform risk assessment procedures that are sufficient to provide a
reasonable basis for identifying whether the material misstatement is
due to error or fraud. Understanding of the company includes
relevant industry, regulatory, and other external factors, the nature
of the company, the company's selection, and application of
accounting principles, including related disclosures, etc., that might
reasonably expect to have a significant effect on the risk of material
misstatement. The auditor should obtain a sufficient understanding
of each component of internal control over financial reporting.
Salary.com. 2022. Compensation Information. Retrieved on September
29, 2022, from https://www.salary.com/tools/executive-
compensation-calculator/mark-parker-salary-bonus-stock-options-
for-nike-inc-cl-b?year=2022
Payscale.com. 2022. Average Nike, Inc Salary. Retrieved on September
29, 2022,
https://www.payscale.com/research/US/Employer=Nike%2C_Inc./S
alary
