Nike Names Insider as CEO
Nike Inc. Chairman Phil Knight said Monday that he had replaced Chief Executive William D. Perez after only a year on the job because the former S.C. Johnson & Son Inc. leader could not make the transition from the household products industry to head the world’s largest athletic-shoe company.
“Basically the distance between the company that Bill managed in the packaged goods business and Nike and the kind of new athletic-equipment business was too great for him to make that leap,” Knight said during a conference call with industry analysts.
Knight named longtime co-President Mark Parker as CEO to replace Perez, whose resignation was accepted Friday by the Nike board of directors.
Perez was the first outsider hired to lead Nike after Knight decided late in 2004 to hand over the day-to-day management responsibilities he had held as chairman, CEO and president.
Nike will pay Perez at least $4.5 million in salary and bonus, and buy his Portland house and reimburse him for remodeling expenses, totaling about $3.6 million, the company said in a filing with the Securities and Exchange Commission.
Knight said he believed the Beaverton, Ore.-based company was “operating at 80% efficiency” under Perez.
“Personally, I think the failure to really kind of get his arms around this company and this industry led to confusion on behalf of the management team,” Knight said. “And I didn’t see that getting any better.”
He noted that Nike still has been generating record sales and earnings, but “I thought we can and will be so much better under Mark Parker’s leadership.”
In a statement released Monday, Perez said he and Knight “weren’t entirely aligned on some aspects of how to best lead the company’s long-term growth. It became obvious to me that the long-term interests of the company would be best served by my resignation.”
Last month, when Nike announced its second-quarter earnings, Perez joked that his “rookie status” was about to end with completion of his first year on a job whose mission as CEO was “to make sure this company has the right strategies in place to sustain long-term growth and to ultimately double the size and value of our business.”
But Knight said Monday that he and Perez eventually could not agree on that strategy.
John Horan, publisher of Sporting Goods Intelligence, said Knight chose Perez because of his experience in marketing multiple brands of products.
“It’s a very, very unique culture,” Horan said of Nike and the athletic-shoe industry, which was built around performance products that appealed to runners and other athletes before it began expanding to a broader consumer base.
Now Nike owns other brands, such as Converse and the Cole Haan fashion shoes and accessories line, and it is moving into more diverse markets.
Shares of Nike fell 75 cents to $83.45.
