Last year the chairman, president and CEO of Oregon-based Nike was paid $47.6 million, making him the highest-paid public company executive in the Northwest. In keeping with a corporate trend, most of that money is in stock grants tied to Nike’s performance over several years.
The athletic footwear and apparel business has been good to Mark Parker.
Last year the chairman, president and CEO of Oregon-based Nike was paid $47.6 million, making him the highest-paid public-company executive in the Northwest, according to data provided by California-based research firm Equilar.
Parker’s compensation jumped 183 percent, largely because of a $30 million stock grant by the company’s board of directors.
Directors granted the award because of Nike’s performance under Parker and their desire to keep the 61-year-old executive on the job for a few more years, according to disclosure statements. (Nike’s proxy is filed in late July; The Seattle Times/Equilar Pacific Northwest CEO Pay survey used the one filed last July for Nike’s fiscal year ending May 31, 2016.)
Parker won’t get all of the stock unless he stays with the company until 2020 and the company hits specific revenue and earnings targets.
His payday exemplifies a wider trend among public companies. Corporate directors are now more likely to pay CEOs with performance-based stock grants than with stock options, said Matthew Goforth, a research manager with Equilar.
A stock option is the right to buy shares at a preset “exercise” price within a defined period of time, such as 10 years. Stock options often vest in stages, over time, as an incentive for the CEO to stay on the job.
The board of directors for XYZ Corp., for example, may pay their CEO with options for 40,000 shares, with 10,000 shares vesting each year for four years, at an exercise price of $25 a share. If the stock price exceeds $25 on the open market, the CEO can exercise the vested shares,…