Nike boss Mike Parker to step aside as CEO

Nike’s longtime CEO Mike Parker is being replaced by a tech veteran after the brand faced a series of PR crises.

Nike boss Mark Parker unveils a new range of products. Picture: AFP

Nike’s longtime leader Mark Parker will step aside as chief executive and be replaced by a technology industry veteran, marking a strategic shift atop the world’s biggest sportswear brand.

John Donahoe, 59 years old, a former eBay chief executive and a current member of Nike’s board, will take over as CEO in January. Mr Parker, 64, will become Nike’s executive chairman. The four-decade Nike veteran took over the top job in 2006, inheriting a global brand built by co-founder Phil Knight.

The CEO change comes at a time when Nike’s sneaker and apparel business has been logging strong sales, but the brand has also faced a series of public relations crises, including the recent ban of Nike’s top running coach amid doping allegations and concerns about the company’s workplace culture.

In a memo sent to Nike staff, Mr Parker said he told the board he wanted to find a new CEO so he could work alongside them before retiring. “To be clear, I’m not going anywhere. I’m not sick. There are no issues I’m not sharing,” Mr Parker wrote.

Last year, Mr Parker apologised for allowing a corporate culture that excluded some staff and failed to take seriously complaints about workplace issues. The apology followed weeks of turmoil and the departures of several senior executives, including Mr Parker’s top lieutenant. In response, Mr Parker said he would remain chairman and CEO beyond 2020.

The Wall Street Journal had earlier reported that Nike was investigating allegations of inappropriate behaviour after a group of women at the company circulated a survey that reached Mr Parker.

Earlier this month, the Journal reported that Nike-backed running coach Alberto Salazar briefed Mr Parker on a number of occasions about his experiments using a testosterone cream, according to emails revealed by the US Anti-Doping Agency.

A Nike spokesman said Mr Salazar was concerned Nike runners could be sabotaged by people rubbing the cream on them.

Mr Parker initially sent a memo emphasising his support for Mr Salazar. The following week, he sent a memo to employees saying the Nike Oregon Project, an elite running group coached by Mr Salazar, was being shut down.

Alberto Salazar. Picture: AFP

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A Nike spokesman said the search for a new CEO began months ago and wasn’t triggered by the Oregon Project issue. The board considered several candidates but landed on Mr Donahoe because of his familiarity with Nike and experience running e-commerce and tech companies.

The spokesman said: “John is the right leader, a proven CEO, who is no stranger to Nike and will help accelerate our digital transformation.”

Mr Donahoe has a background in the tech world rather than in sportswear. He was the CEO of ServiceNow, a cloud computing company, and is chairman of PayPal Holdings. From 2008 until 2015, Mr Donahoe was eBay’s chief executive, where he stepped down after overseeing the spin-off of PayPal into a separate public company.

Mr Parker’s tenure has been a financial success. Sales have more than doubled and Nike’s share price has steadily climbed, giving the company a market value of roughly $US150 billion. Nike dwarfs its rivals, with almost twice as much revenue as main rival Adidas.

The company has been posting strong sales in recent quarters both in the US and China, its two biggest markets. The growth has been helped by Nike’s shift to sell more of its products directly to consumers and through its own shopping apps. Mr Parker also approved an advertising campaign in 2018 featuring Colin Kaepernick, the NFL quarterback-turned-activist, that caused an uproar but boosted sales.

Nike shares, which are trading near all-time highs, were little changed in after-hours trading after ending Tuesday’s regular session at $US95.60.

An athlete wears a pair of Nike shoes at the 2019 IAAF Athletics World Championships. Picture: AFP

Mr Parker, a track athlete at Penn State, joined Nike after college and landed in the company’s R&D lab in Exeter, New Hampshire, in 1979 as a designer. He went on to work with Nike co-founder Bill Bowerman and remained heavily involved in sneaker design even as he climbed the ranks at the company.

In 2006, Nike’s longtime leader and co-founder Mr Knight handed day-to-day management to Mr. Parker, after his previously anointed successor, an outsider with little experience in footwear, left after 13 months. In 2016, Mr. Knight retired and handed over the chairman role to Mr Parker.

In a statement, Mr Knight praised Mr Parker’s tenure as CEO and the appointment of Mr Donahoe. “They’ve already worked together on the board for the last five years,” he said. “I’m delighted Nike is in great hands for its digital future.”

Nike’s CEO switch came the same day that rival Under Armour said founder Kevin Plank would step down as CEO in January. Mr Plank, too, will stay on as executive chairman. That means both US sportswear giants will have new leaders next year as they face shifting consumer tastes and a difficult retail landscape.

Wall Street Journal