NEW YORK — Phil and Bill weren’t such a great match after all.
Nike executives asserted Monday that the resignation of William D. Perez as chief executive officer was due to his inexperience with the company and the industry. Nike’s co-founder and chairman, Phil Knight, told analysts on a conference call that there was no one deciding factor, but a host of small issues that led to his departure. Perez has been replaced by 27-year Nike veteran Mark Parker, who said the company’s strategy remains unchanged.
“It was very difficult for Bill to come in here after 34 years at a packaged-goods company and get his arms around this place,” Knight said on the call. “There was too much of a difference in industries, companies and brands at the end of the day.”
Knight’s comments were in sharp contrast to those he made in 2004 when Perez’ appointment was announced. At that time, Knight said he was stepping aside as ceo and that Perez “was the right person to lead Nike Inc.” due to his 30-plus years of experience building brands. However, some analysts speculated Perez was too focused on cost control and was looking to pare down marketing and other expenses.
Perez did not participate in the call, but said in a statement: “Nike is an incredible organization with tremendous growth opportunities. However, Phil and I weren’t entirely aligned on some aspects of how to best lead the company’s long-term growth. It became obvious to me that the long-term interests of the company would be best served by my resignation.”
“Mark has a proven track record in driving creativity, innovation and growth,” Knight said Monday. “Mark is the right person to drive our business forward.”
Parker said on the call, “What you can expect of me as ceo is that I will continue to build on our five areas of focus … I have a deep connection to the brand and the company and I step into this role with great responsibility for our heritage and our future.”
However, the management shake-up suggests that “things may not be going as well as they were when Knight turned the reins over to Perez” a little over a year ago, said analyst Elizabeth Dunn of Prudential Securities.
Nike sales gained 9 percent to $7.3 billion in the six months ended Nov. 30, but the company said it had a slowdown in worldwide futures orders, a key indicator of growth. Nike, the world’s largest athletic company, also faces greater competition now that Adidas is acquiring Reebok. Nike shares slipped 0.9 percent to $83.45 Monday after the news was announced.
Perez, who was an outsider to the athletic industry, spent just 13 months at the top job before stepping down, while Parker, 50, has been leading its strategic planning. Charlie Denson, Parker’s co-president, has been named president of the Nike brand. Denson, 49, also has been with the company for 27 years. On the call, Parker said he already has had experience working with the company’s other brands. Nike now has a diverse portfolio that includes Converse, Cole Haan and Hurley as well as Starter.
Many industry insiders wondered why Parker or Denson weren’t given the ceo position when Knight first announced his decision to step down, given their tenure and success with the company. Nike has been on a roll in recent years, due to more sales of higher-priced items, international expansion and a host of well-executed acquisitions in areas outside of its core athletic arena.
Perez will be well compensated for his short tenure. As part of his severance package, he will receive about $2.8 million, as well as the greater portion of his target bonus of at least $1.8 million, according to a regulatory filing. Nike will also pay about about $3.6 million to buy Perez’s Portland, Ore., house and reimburse him for remodeling and other costs.