Nike (NKE) will have a new CEO running the quarterly earnings calls in 2020. And fortunately for him, he already knows the company.
In a surprise development Tuesday after the close, Nike said long-time CEO Mark Parker will step down as CEO on Jan. 13, 2020. Former EBay CEO and Nike board member John Donahoe will take over as CEO. Donahoe has been the CEO of software tech player ServiceNow and a Nike board member since 2014.
A source familiar with the situation tells Yahoo Finance the succession plan has been in the works for some time. Donahoe was viewed favorably for his global perspective and strong tech background.
Nike’s stock fell 3.4% in trading on Wednesday. ServiceNow — who announced former SAP CEO Bill McDermott as its new CEO — fell 4% on the news.
Parker has been CEO since 2006, and was hand-picked by Nike founder Phil Knight to succeed him in that role. Parker will assume the executive chairman role.
“This is an exciting time for Nike where we see brand strength and momentum throughout the world and great opportunity for future growth,” said Parker in a statement. “I am delighted John will join our team. His expertise in digital commerce, technology, global strategy and leadership combined with his strong relationship with the brand, make him ideally suited to accelerate our digital transformation and to build on the positive impact of our Consumer Direct Offense. I look forward to continuing to lead the Board as Executive Chairman, as well as partnering closely with John and the management team to help him transition to his new role.”
The timing of the announcement could easily be characterized as highly interesting.
For starters, Nike’s heated rival Under Armour (UA) announced Tuesday a succession plan of its own in the CEO role. Under Armour founder and CEO Kevin Plank will soon assume the executive chairman position, handing off CEO to hand-picked successor Patrik Frisk. Frisk is the former CEO of shoe retailer Aldo and long-time executive at VF Corp.
Meanwhile, Parker has caught a good bit of fire the past year even as Nike has continued to ring the sales register each quarter.
Parker was recently swept up into a doping scandal controversy with Nike-backed running coach Alberto Salazar. According to emails found in a decision by the American Arbitration Association, Parker and other Nike executives were made aware of certain medical experiments being done by Salazar on performance-enhancing drugs.
Parker has denied any wrongdoing.
And late in 2018, two female Nike execs filed a suit against the company alleging sexual discrimination.
The upside for Nike here is that Donahoe is well-connected in Silicon Valley at a time where Nike is making a major digital push globally. Further, Donahoe is comfortable in giving media interviews to discuss strategy and is not afraid of taking public, vocal stands on big issues. That was on full display in Donahoe’s recent interview with Yahoo Finance editor-in-chief Andy Serwer on his show “Influencers With Andy Serwer.”
Nike should be well served because of Donahoe’s ability to craft a story and quickly address key social issues.
Parker has largely shied away from those interviews, with some experts arguing it has hurt Nike a bit during times like its recent controversies.
Concerns on the timing of the announcement — and negative stock price reaction — prompted two Nike heavyweights to weigh in by Wednesday afternoon.
“In Mark and John, we have two exceptional leaders. With Mark‘s leadership, Nike’s revenue tripled and Nike became one of the most iconic and innovative brands in the world. John has a proven track record as a highly successful three-time CEO and, like Mark, leads with integrity and loves Nike and the world of sport. I know them both well and I could not be more excited they will work together to lead Nike’s next chapter,” Nike board member and Apple CEO Tim Cook said in a statement.
Added Nike founder and chairman emeritus Phil Knight, “Mark Parker has worked at Nike for 40 years, doing an exemplary job in many different positions. His years as Chief Executive Officer have been outstanding. The Company’s shareholders, employees, customers, suppliers, and our community in general, owe him a very large thank you.
With Mark moving into a new role as Executive Chairman and John Donahoe coming as Chief Executive Officer, Nike will have an awesome team in place with complementary skill sets. They’ve already worked well together on the Board for the last five years. Forbes recently picked the two of them in the top 25 of America’s most innovative leaders.
This is a case where 1 + 1 = 3. I’m delighted Nike is in great hands for its digital future.”
Nike declined to make Donahoe or Parker available for an interview.