Nike said on Tuesday afternoon its longtime CEO, Mark Parker, is stepping down, effective January next year.
In a sign of the company's focus on digital technology, he will be replaced by John Donahoe, a board member of Nike and CEO of ServiceNow. Previously, Donahoe was CEO of eBay and chairman of PayPal's board of directors.
Nike shares were withdrawn at market hours after new hours and were less than 1% recent. ServiceNow shares have fallen by over 10%.
Parker, who has been the CEO of Nike since he took over from founder Phil Knight in 2006, will become the company's executive chairman, according to a press release. He has worked with Nike for four decades, including as Vice President of Global Shoes and Co-Chair.
Parker said in an interview with CNBC's Wilfred Frost that Donahoe is not a "stranger" at Nike and is decisively "the best choice for Enter." He said Donahoe should "enable the next level of growth." , digitally, for the company. He added that the Nike board had spent "many months in work on inheritance planning … This is not something that happens in a few weeks."
He also said the decision was not prompted by recent doping allegations related to the Nike Project in Oregon.
At the end of September, Nike head coach Alberto Salazar was banned amid doping allegations that reportedly include links to Parker The New York Times reviewed emails from the US Anti-Doping Agency that showed Parker was familiar with Salazar's various experiments on using testosterone cream
In an email to employees at the time, Parker said, "Nike is not involved in any effort to systematically touch any runner; The idea itself hurts me. "He also said that Nike had considered the allegations against Salazar and found no wrongdoing.
" We remain very close to the situation, "Parker told CNBC on Tuesday." We are in the midst of complex "
Nike's announcement came the same day that Under Armor announced that CEO Kevin Planck would step down on January 1
Under Parker's leadership, Nike saw the stock jump and sales soar. But the company has also faced its share of corporate culture scandals, etc.
In 2018, President Trevor Edwards, who many saw one day as Parker's probable heir, retired. a group of women presented a gender discrimination survey to Parker, Edwards was charged with creating and aggravating a "hostile work environment". Parker responded by restructuring his leadership team, which included Edwards' ouster.
In 2018, Nike acknowledged that it failed to hire and encourage women, and the company removed at least 11 executives and announced promotions to 7,000 employees after conducting an internal review of its remuneration practices. Parker apologized to employees as a whole in May.
But the obstacles did not stop there.
Nike, led by Parker, has a history of using controversial marketing campaigns to strengthen its brand.
In September 2018, he slammed a new ad campaign for the 30th Anniversary of Just Do, with the participation of former San Francisco 49ers quarterback Colin Kaepernick. This triggered a wave of responses, both for and against the trade slot. But Nike's "Dream Crazy" campaign ultimately won the "Creative Commercial Emmy Awards" exclusive commercial this year, marking the first time Nike advertising won the 2002 award.
Nike's Bad Internal Practices Again were in the spotlight. again this year, when three female Olympic runners came forward, penning options with The New York Times to say their contracts with Nike were cut because they were pregnant.
Sprinter Allyson Felix, who has since signed a deal with Gap & # 39; s Athleta brand, said Nike wants to pay her 70% less after giving birth. Nike responded to their stories by reviewing contracts to include more protections for pregnant athletes, including adding an 18-month period before the baby's payout date when a woman could not be affected by a performance-related pay cut.
All of these cases do not seem to affect Nike sales or investor sentiment.
The stock reached its highest internal day on Monday at $ 96.87. The stock gained 29% this year, bringing Nike's market cap to approximately $ 149.2 billion. Armor shares rose about 21% over the same period, while smaller Lululemon shares rose nearly 68%.
The brand is struggling in North America, but this is also true of Adidas and Under Armor competitors.
In the last quarter, Nike's revenue jumped 7.2% to $ 10.66 billion from $ 9.95 billion a year ago, exceeding Street's expectations of $ 10.44 billion.
The company forecasts revenue growth this fiscal year will be high single-digit range, slightly exceeding sales growth in fiscal 2019.
Apple CEO Tim Cook, Nike's leading independent director and chairman of the committee "In Mark and John, we have two exceptional leaders. With Mark's leadership, Nike's revenue has tripled and Nike has become one of the most iconic and innovative brands in the world. John has a proven track record as a hugely successful three-time CEO and, like Mark, leads with integrity and loves Nike and the sports world. I know them both, and I couldn't be more excited to work together to lead the next Nike chapter. "
ServiceNow announced later on Tuesday that former SAP CEO Bill McDermott would succeed Donahoe.