It’s no secret that Nike has been going through a tough time with the recent rounds of layoffs. This can create concern and uneasiness around a Nike employee’s livelihood and how it may affect their financial picture. As we have been actively guiding our Nike clients through this season, we wanted to share things to consider if you were or will be impacted by these layoffs.

Understand Your Severance Package

Nike has a standard severance agreement and package that includes a one-time payout of cash based on your level and tenure at Nike. This can range from 4 weeks to 48 weeks of salary.

In addition, there is often a continuation of health insurance through COBRA that includes a subsidy of the cost for around 6 months. This provides some time to transition to a different health insurance plan if that is right for you.

If you have any accrued PTO that you haven’t used, this will be paid out to you in cash after officially leaving Nike. This is often extra cash that people are not expecting and can help create some comfort during an uncomfortable time.

Lastly, you may still be eligible for the PSP bonus paid out in August as long as you are still employed anytime in May (the last month of the Fiscal Year).

Create a Strategy for Deferred Comp Distributions

If you contributed to the Nike Deferred Compensation Plan, leaving Nike will typically trigger distributions according to the schedule you designated when enrolling. This can range from a one-time lump sum or installments over 5, 10, or 15 years. For some, this can be a way to supplement income. However, for others who don’t need the funds, these distributions can create a tax issue to strategize around. These payments are sent out quarterly, so if this is needed for cash flow you should plan accordingly.

Plan for your Stock Options and RSUs

Any vested but unexercised stock options typically need to be exercised within 90 days of leaving Nike, unless you qualify for the special retirement benefits at age 55 or age 60 (you keep unvested options and can sell for lesser of expiration or 4 years). At this time, you typically will lose any unvested options or RSUs.

During larger layoffs, there can be enhanced vesting of options and RSUs, where upcoming vests within a year will accelerate and vest. In addition, Nike can also provide you with more time to exercise your stock options like up to 1 year instead of 90 days. When Nike stock price is struggling like it is now, it makes your exercise decisions in a small window difficult. We would recommend working with your financial advisor to determine a defined strategy to maximize the benefit and minimize taxes.

Keep track of your PSUs and ESPP

Normally, you need to be employed at Nike at the vest date to receive your PSUs. In a situation of Reduction in workforce (larger layoffs), you can still receive any PSUs if the vesting date is within one year of termination.

Any ESPP that has been contributed but not purchased yet will be refunded to you. In addition, you have more control over your ESPP shares that you have purchased previously as these can be held as long as you want. This provides an opportunity to be patient and strategic on any sale of this stock.

Prepare to mitigate tax liability

All the benefits outlined above come with tax implications that are not always easy to see. These items can quickly add up to large amounts of taxable income, which can push your income into high tax brackets. In addition, the tax is often under-withheld (22% Federal and 8% State), which can lead to a significant tax bill in April if not accounted for properly.

Know your 401K options

This recommendation depends on each person’s situation. Nike has a strong investment fund lineup, and you should compare that to any other place that would replace it. However, leaving your 401(k) at Nike requires more activity and maintenance since it does not have an auto-rebalancing feature, which would periodically sell funds that drift from their target allocation. For example, if the large company stock fund was targeted at 60% and grew to 64%, you should periodically bring that back to the 60% target to maintain the proper risk/return mix. Another factor to consider is the desire to make Backdoor Roth IRA contributions if you have extra funds for retirement savings.

Support when transitioning into the next job

The cash you receive from benefits like severance, PTO payout, and stock sales can help provide some comfort to your situation. While you are in transition with your job, we recommend creating a system to feel like you are receiving a paycheck replacement with your cash to reduce anxiety and bring normalcy to your day-to-day financial life. An example of this system would be taking your net benefits payout and depositing it in a savings account, then setting up bi-weekly transfers to your checking account to simulate your paychecks.

All these considerations are tied to a person’s long-term financial plan. Through financial planning projections and scenario planning, you can help determine what the next job needs to look like to achieve your goals for retirement, kids’ education, and lifestyle. It can provide you with the information to know if you need a comparable compensation package to Nike or if you could take a job with lesser pay that could be more fun or less stressful.

Being laid off from any job often creates much uncertainty, stress, and concern. With the right preparation, planning, and advice, it can be a smoother transition, and you may end up in an even better place than where you started.

If you have questions about preparing for or navigating a current layoff at Nike, please feel free to contact us at nike@humaninvesting.com or schedule time with us below.  

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Elite performance isn’t about doing everything at once; it’s about prioritizing the right moves at the right time. Your finances deserve that same level of intentionality. You probably have many competing goals and need to find the best way to prioritize spending, debt pay down, and saving for the future, among other things.

Selecting the optimal avenue for your dollars can be challenging when you have access to Nike’s unique savings avenues. It is important to fill the most beneficial buckets first. The order we have detailed below is not a “one size fits all” approach. Building your financial plan around your goals and unique circumstances will help determine the savings opportunities that will be the most impactful for you.

1. Contribute enough to get your Nike employer match on your 401k

Deferring 5% of your income to your Nike 401k is a strategic way to maximize free dollars. This helps grow your retirement savings and amplifies the long-term benefits of your investment. Additionally, you have the option to save pre-tax dollars or Roth dollars, allowing you to choose when you pay tax on your contributions. Whether to contribute via Roth or pre-tax is best determined by your unique financial plan.

2. Enroll and maximize your HSA contributions

One benefit of participating in Nike’s healthcare coverage is the opportunity to utilize the Health Savings Account (HSA). Those covered by the high-deductible healthcare plan (HDHP) can take advantage of tax-deductible contributions along with tax free earnings and withdrawals when used for qualified medical expenses.

Being covered under the high-deductible health care plan (HDHP) is not for everyone. It depends on your health needs and financial flexibility. Each person is unique and should consult a professional for their specific circumstances. 

3. Save extra into your 401k via Mega Backdoor Roth contributions

If you have filled all the prior buckets and still have additional cash flow, consider putting extra money into your 401k through Mega Backdoor Roth contributions. This savings vehicle allows you to go above and beyond traditional 401k contribution limits. You pay taxes on these dollars now and withdraw them tax-free in retirement. Contributions can be made up to 3% of your compensation, limited to a maximum of $360,000 of eligible compensation. This is a great savings opportunity to contribute extra funds, up to $10,800 on top of the standard $24,500 standard deferral limit, to your Nike 401k account.

4. Maximize ESPP Deferrals

Saving into the ESPP bucket is a way to purchase Nike shares at a 15% discount. You can contribute up to $21,250 through salary deferrals. If you have a steady cash flow, saving into your ESPP can feel like instant growth on Nike stock if you sell the shares right after they’re purchased. This strategy to immediately sell allows you to capture the discount and supplement cash flow when the shares are purchased every six months. There are no taxes until the shares are sold, but the taxes on the discount and any gains can be complicated and should be reviewed by a tax or financial professional. 

5. Utilize Deferred Compensation savings

If you are eligible for Nike’s deferred compensation plan, utilizing this plan can help reduce your current taxable income while setting aside and investing funds for your retirement. Contributing to the Deferred Compensation plan defers Federal and state taxes and can help keep your taxable income below thresholds for local taxes. This plan requires precision to set up and maintain and will help optimize your retirement savings in your financial plan.

6. Execute a Backdoor Roth IRA Contribution

In 2026, you can contribute up to $7,500 to a traditional IRA, with an additional $1,100 catch-up contribution available for those over age 50. Making a tax-deductible contribution is subject to income phaseouts. If you don’t have an existing IRA balance, you could make a backdoor Roth IRA contribution even if your income is above these phaseout levels or above the income phaseouts for Roth IRA contributions. This is done by contributing after-tax dollars to a traditional IRA and converting those funds into a Roth IRA.

7. Open a taxable brokerage account

If you still have cash flow to save after filling all the previous buckets, using a taxable brokerage account to make additional investments can help fund your future financial goals. Saving into a taxable brokerage account can be especially helpful if funds will be used soon, such as if you are considering a new home purchase or paying for college. These accounts allow you to withdraw funds at tax-advantaged capital gains rates at any time. In particular, the flexibility of this account can be advantageous for those considering retiring early since there is no penalty for withdrawing funds before age 59½.

Want to see this in action?

Building a strong roadmap to reach your goals includes thoughtfully utilizing Nike’s employee benefits and prioritizing ways to save through ways that are the most beneficial for your unique needs. The various options you have available at Nike each have their own unique contribution limits, tax advantages, and benefits. Having a coordinated strategy allows you to create a game plan that suits your unique needs and supports your needs for today and ambitions for tomorrow.

The most effective savings hierarchy is one that is thoughtfully aligned with your broader financial picture. A comprehensive financial plan can help bring clarity to competing priorities and ensure your savings decisions are aligned with your short-term needs and long-term goals. Working with a financial advisor can help you sift through these buckets and determine the best way to optimize each dollar saved to secure a successful financial future.

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Disclosure: This content is for informational and educational purposes only and is not intended as investment, legal, or tax advice. The strategies and steps outlined—such as building an emergency fund, contributing to employer-sponsored plans, paying down debt, or using HSAs, IRAs, and taxable accounts—are general in nature and may not be appropriate for every individual. You should consult a qualified financial or tax professional before making decisions based on your personal circumstances. There is no guarantee that following any financial strategy will achieve your goals or protect against loss. References to interest rates, contribution limits, or tax rules reflect information available at the time of publication and may change. Past performance is not indicative of future results. Advisory services are offered through Human Investing, an SEC-registered investment adviser.

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Given the recent stock market volatility, it is important to re-evaluate your plan for your Stock Benefits (RSUs, ESPP, Stock Options) to take advantage of opportunities that may arise in this environment. 

A well-crafted strategy for your stock benefits should focus on:

1. Personal needs and situation

2. Maximizing the benefit

3. Minimizing taxes

4. Diversifying strategically

5. Incorporating the investing principle of “Buy Low + Sell High” (when available)

The Investing Principle of Buy Low + Sell High

A fundamental investing strategy is to buy stocks when they are undervalued and sell them once they’ve appreciated, allowing you to benefit from the price increase. While timing restrictions from stock benefits may limit this approach, it’s important to integrate it whenever possible.

Strategies for your stock benefits based on your timelines

How do you incorporate your personal situation and needs with an effective strategy during the current market volatility? We will dive into several strategies that address the needs for different time periods, since timelines are an even more important factor during volatile markets.

For short-term needs (2 years or less)

Stock compensation can provide funds for expenses beyond salary and bonus, such as tuition, home repairs, vacations, or tax bills.

1. First, consider selling recently purchased ESPP shares. Since you're buying these shares at a discount while the stock price is low, selling them for a gain doesn’t violate the “buy low, sell high” principle.

2. Next, consider selling recently granted and vested RSUs. Like the ESPP strategy, these RSUs can help meet short-term cash needs. The main difference is that RSUs are often granted at a higher price—before a market downturn—so their current value may be lower than when they were granted. However, if the RSUs were granted recently, the price difference might be minimal, making them a more attractive option to sell.

For intermediate term needs (3-7 years) 

The intermediate term timeframe can be more challenging, since the answer isn’t clear and should depend on your risk tolerance.

• The more conservative approach: Sell existing RSU grants that will vest in the next 12 months. This strategy reduces your exposure to stock volatility but doesn’t fully align with the “buy low, sell high” principle, since RSUs may be worth less than their original grant price. However, future annual grants—typically part of your compensation—can help offset this by being issued at lower prices during a market downturn.

• A higher-risk approach: Hold all existing RSUs until the funds are needed, with the hope that the stock price recovers before then. This could allow you to better capitalize on the “buy low, sell high” strategy. The risk, however, is that the stock may not recover in time—or at all—leaving you potentially forced to sell at a loss when cash is needed.

• The balanced approach: To hedge your bets, consider combining both strategies: sell some RSUs now while holding others for potential future gains. This hybrid approach can offer peace of mind, helping you avoid second-guessing your decision if the market doesn’t move in your favor.

For long-term needs (8+ years)

Planning for long-term goals like retirement tends to be more straightforward.

• For vested RSUs and ESPP: Consider a strategy called Tax Loss Diversification, a variation of traditional tax loss harvesting. Tax loss harvesting involves strategically selling investments in non-retirement accounts to realize a loss, which can reduce your tax bill. You then reinvest that money into similar investments to stay in the market and benefit from potential recovery. With Tax Loss Diversification, the added benefit is that you're also shifting from concentrated stock (like your company shares) into a more diversified investment—such as an index fund with exposure to hundreds or thousands of companies. When the market is rising, diversifying can be painful due to the capital gains taxes involved, so it's wise to take advantage of a downturn as a window of opportunity.

• Stock Options, RSUs, and ESPP: Stock Options offer the greatest potential upside but also carry the highest risk, especially when they’re “underwater” (i.e., the stock price is below the option’s strike price, making them currently worthless). In these cases, the best move is often to wait and give the stock time to recover, maximizing the chance to capture that upside. For RSUs and ESPP shares that you intend to hold for long-term growth, the best approach is often patience—holding through downturns and waiting for both the stock price and the broader market to recover.

The Exception: Expiring Stock Options

Expiring stock options require timely decision-making due to looming deadlines. Your strategy should reflect your risk tolerance, the number of options involved, and how critical they are to your overall financial goals.

• Conservative approach: Sell all options now to avoid the risk of further price declines. This minimizes downside but also limits any potential future upside.

• Moderate approach: Sell portions of your options at predetermined dates over time, balancing risk reduction with the opportunity for gains.

• Moderately aggressive approach: Sell portions based on specific price targets. If those targets aren’t reached, you may need to sell the remaining options closer to expiration to avoid losing them entirely.

• Aggressive approach: Hold all options until close to expiration in hopes of a stock price rebound or significant upswing. This offers the most potential upside, but also the highest risk of loss if the stock doesn’t recover in time.

Market volatility may feel uncertain and carry risks, but it also creates rare opportunities to make the most of your stock benefits. If you haven’t revisited your strategy recently, now is a great time to reassess and align your plan with the current market landscape.

Remember, there’s no one-size-fits-all approach. The right strategy depends on your company’s stock performance, your personal financial goals, risk tolerance, and overall circumstances. Use this moment to take control, make informed decisions, and turn today’s challenges into tomorrow’s opportunities.

For questions or more information about managing stock benefits during current conditions, please call (503) 905-3100 or contact us.

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Disclosures: The information provided in this communication is for informational and educational purposes only and should not be construed as investment advice, a recommendation, or an offer to buy or sell any securities. Market conditions can change at any time, and there is no assurance that any investment strategy will be successful. Investing involves risk, including the potential loss of principal. Past performance is not indicative of future results.

Diversification does not guarantee a profit or protect against a loss in declining markets. Asset allocation and portfolio strategies do not ensure a profit or guarantee against loss.

This material is not intended to provide, and should not be relied upon for, tax advice. Please consult your tax advisor regarding your specific situation.

The opinions expressed in this communication reflect our best judgment at the time of publication and are subject to change without notice. Any references to specific securities, asset classes, or financial strategies are for illustrative purposes only and should not be considered individualized recommendations.

Human Investing is a SEC Registered Investment Adviser. Registration as an investment adviser does not imply any level of skill or training and does not constitute an endorsement by the Commission. Please consult with your financial advisor to determine the appropriateness of any investment strategy based on your individual circumstances.

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