AFL-CIO Files Shareholder Action Asking Nike to Pay Its Share of Taxes
In the wake of the release of the so-called Paradise Papers, the AFL-CIO sent a shareholder proposal to Nike asking the world's largest sports brand to stop using tax-avoidance schemes that have allowed the company to avoid paying $4 billion in U.S. taxes. That money could be used to fund infrastructure, schools and health care.
The Paradise Papers helped shine a spotlight on the practices used by companies like Nike to avoid paying taxes on earnings they make in the United States. Nike is a client of the offshore law firm Appleby, which helped Nike shift the billions in profits through such methods as transferring ownership of trademarks, including Nike’s iconic swoosh logo, to a Bermudian subsidiary and then to a Dutch limited partnership.
The AFL-CIO’s shareholder proposal will go to a vote at Nike’s 2018 annual meeting and has been co-filed by Domini Investments. The proposal asks Nike to adopt a set of "responsible tax principles" that include:
- Considering the impact of Nike’s global tax strategies on local economies and government services that benefit Nike;
- Annually reviewing Nike’s tax strategies and assessing the alignment between the use of such strategies and Nike’s stated values or goals regarding sustainability;
- Periodically assessing the reputational consequences, including views of customers, shareholders and employees, of engaging in practices deemed to be "tax avoidance" by such stakeholders; and
- Ensuring that Nike seeks to pay tax where value is created.
These principles will help ensure that Nike’s board is fully informed regarding the impacts of offshore tax avoidance strategies and considers them when exercising its oversight responsibilities. The AFL-CIO is considering filing similar shareholder proposals at other companies that have been named as Appleby clients in the Paradise Papers, such as Facebook, Alphabet and Allegan.
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Reposted from AFL-CIO
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Photo by Mando Gomez/Flickr
