Nike admits ‘behavioural issues’ after leadership shake-up

Nike says it has “a deep leadership bench”, after workplace complaints triggered the exit of two top executives.

Nike president and CEO Mark Parker. Pic: AFP

Nike chief executive Mark Parker told investors the company has “a deep leadership bench,” a week after complaints about workplace behaviour triggered a management shuffle and the resignation of his heir apparent.

Mr Parker began a conference call to discuss the sportswear maker’s latest results by saying the company “became aware of some behavioural issues” internally but didn’t provide additional details.

Last week, The Wall Street Journal reported that Nike had received internal complaints that preceded the exits of two prominent executives.

Nike said Trevor Edwards, the company’s No. 2 executive, resigned his position as Nike Brand president and is retiring in August. Jayme Martin, a vice president and general manager of global categories, was forced out, people familiar with the matter said.

Nike has received complaints pertaining to Mr Martin but no direct complaints about Mr Edwards, a person familiar with the matter said.

“We have a deep leadership bench at Nike, and I’m confident that our restructured leadership team will continue to strengthen our culture,” Mr Parker said.

Mr Parker, who has run the company since 2006, said last week he would stay on as CEO through 2020. On the overnight (AEDT) call, he thanked Mr. Edwards for his contributions to Nike and said the two men would work together until Mr Edwards’s retirement. Mr Edwards didn’t participate in the call.

Like Mr Parker, both Messrs. Edwards and Martin spent decades at Nike working their way up the ranks. Neither has responded to requests for comment. Nike hasn’t specified what complaints it has received.

Women at Nike, frustrated with what they perceived as pay disparity and gender imbalance in upper management, last year circulated an informal survey to take stock of these issues as well as internal allegations of inappropriate workplace behaviour by some men, people familiar with the matter have said.

Nike reported its latest results after the stock market closed. Its sales rose 7 per cent to $US9.0 billion for the three months ended Feb. 28.

The company posted a net loss of $US921 million, due to a $US2 billion charge on foreign earnings following the US tax overhaul, its first quarterly loss in years. Pretax income was $US1.2 billion, down 12 per cent from the year prior.

Sales in Nike’s home market, North America, fell 6 per cent to $US3.6 billion for the latest period. Executives said they expect the region to be roughly flat in the current quarter and to return to sales growth in the quarter that begins in June.

Shares of Nike closed down 2.9 per cent to $US64.42 amid broad stock market declines.

Dow Jones Newswires