Nike CEO is stepping down but will remain executive chairman
Nike Inc. Chief Executive Mark Parker will hand the reins to former EBay Inc. head John Donahoe next year, entrusting an e-commerce veteran with the job of running a $40-billion shoe-and-apparel giant that’s increasingly relying on data and technology to keep its edge.
Donahoe will take the role of president and CEO at Nike on Jan. 13, with Parker remaining in charge of the board as executive chairman. Parker, who has been a Nike employee for 40 years, said in a memo to employees that he would remain closely involved with product design and marketing.
“To be clear, I’m not going anywhere,” he said. “I’m not sick. There are no issues I’m not sharing. I strongly believe the best way for us to evolve and grow as a company is to bring in a phenomenal talent to join our team who has long been part of the Nike family.”
Parker turns 65 next year, and succession has been a big question at Nike for years.
The decision to pick a leader outside Nike’s executive ranks followed a shake-up over misconduct last year and a controversy about doping in sport in recent weeks.
Trevor Edwards, once seen as a CEO candidate, abruptly stepped down last year amid a review of sexist behavior at the company. Other executives were ousted as the world’s largest athletic brand tried to burnish its image.
Three weeks ago, renowned track coach Alberto Salazar was banned from the sport for four years by the U.S. Anti-Doping Agency for running experiments with supplements and testosterone that were bankrolled and supported by Nike, along with possessing and trafficking testosterone. Nike announced that it was shutting down its elite Oregon Project running program overseen by Salazar in the wake of the scandal.
Documents released by the U.S. Anti-Doping Agency showed that Parker was directly aware of an experiment committed by Salazar.
Parker, who joined the company in 1979 as a footwear designer, has been CEO since 2006. In 2017, he took a 70% compensation cut after a rough year for U.S. sales and the company’s stock price.
In Donahoe, Nike gets an executive who has served on its board since 2014 but also brings an outsider perspective.
He’s currently president and CEO of ServiceNow Inc. and chairman of PayPal Holdings Inc. Donahoe previously served as president and CEO of EBay and head of Bain & Co.
“I’ve been proud to be connected to Nike through my role on the board and now look forward to being a full-time member of the team,” Donahoe, 59, said in a statement.
Nike investors took the change in stride. After an initial dip and then a gain, the shares were little changed in extended trading on Tuesday. The stock was up 29% this year through the close.
Nike has felt pressure to show it’s more of a tech company than a shoe seller.
It recently unveiled its store of the future in New York, a retail experience full of new technology that can be unlocked only by members using the Nike app. The company also recently unveiled a new basketball shoe that tracks data on the user and whose laces can be tightened through the application.
This year, Nike purchased Boston-based data science firm Celect, a move that the company said would bolster its understanding of consumer patterns. That acquisition came a year after Nike bought Invertex Ltd., an Israeli computer vision start-up. That technology was eventually unveiled as the driver of Nike Fit, an expansion of the Nike app that lets customers measure their feet at home.
The common thread throughout all this is the Nike app. Nike members spend three times more at Nike.com than guests do, a metric that Nike executives attribute to the company’s ability to better serve those that they know the most about.
Nike’s rival Under Armour Inc. will also have a new leader in the new year. On the same day Nike made its announcement, Under Armour said founder Kevin Plank will step aside as CEO in January and be replaced by Chief Operating Officer Patrik Frisk.
Bloomberg and the Associated Press were used in compiled this report.
