Knight Steps Down As Nike CEO, President
Despite its progressive image in the United States, Nike is a very different company in Vietnam and in other Asian manufacturing operations. Reports of physical abuse, sexual abuse, salary below minimum wage and a debilitating quota systems are confirmed by CBS News, the New York Times, USA Today, Wall Street Journal, AP, Reuters as well as other non-profit and non-governmental organizations.
PORTLAND, Ore. (AP) November 18, 2004 -- Phil Knight, president and chief executive officer of Nike Inc., stepped down as head of the world's largest shoe maker on Thursday at a time when the swoosh's popularity is growing around the globe.
Knight resigned two of his three titles -- president and chief executive officer. The 66-year-old will remain chairman of the company's board of directors, the company said.
He will be succeeded by William D. Perez, head of S.C. Johnson & Son Inc., maker of Glade air fresheners and Drano drain cleaner.
A former University of Oregon track star, Knight founded Blue Ribbon Sports, Inc., with Bill Bowerman in 1968. Knight's first shoes, which he sold out of the trunk of his car, had soles made on Bowerman's waffle iron.
The company was renamed Nike in 1972.
Under Knight's direction, Nike has become a $12 billion business, selling not just athletic shoes but also apparel. Its business continues to grow.
In September, Nike reported that first-quarter sales were up 18 percent to $3.56 billion from $3.02 billion a year ago. Global orders jumped nearly 10 percent, with less than 1 percent of the growth due to changes in currency rates.
The company also reported a large increase in its U.S. orders, up 11 percent to $1.4 billion -- reversing a declining trend in the national shoe market over the last several years.
Knight's combined salary and bonuses for this year were nearly $3.7 million, up from nearly $2.5 last year.
Under Knight, Nike pioneered celebrity-athlete endorsements of its products. The company signed basketball great Michael Jordan in 1984, turning him into a brand name with Air Jordan shoes. Along the way they've also snagged such big-name athletes as Tiger Woods and LeBron James and made the swoosh one of the most recognized trademarks in the world.
Nike has had its share of critics -- including activists who brought attention to working conditions at the company's foreign factories. Nike says it has improved conditions in the factories.
Perez, 57, has been president and chief executive of S.C. Johnson since 1996. He has worked for the privately-held consumer products company for 34 years. Based in Racine, Wis., S.C. Johnson had $6.5 billion in revenue last year.
``I am confident that as CEO of Nike, Inc., Bill will lead Nike's extraordinary team of people to create an even bigger and better global company,'' Knight said in a prepared statement.
He did not give a reason for relinquishing the titles. His resignation is effective Dec. 28.
Perez said he would stay true to Knight's vision.
``You can feel the innovative spirit that Phil and his team inspires from product design, to retail to athlete partnerships. And I'm a strong believer in `Just Do It,''' Perez said in a statement.
Shares of Nike fell 99 cents to close at $85 on the New York Stock Exchange before the news was released. In after-hours trading, the shares fell another 55 cents.
Analysts said the move did not come as a complete surprise.
``It can be likened to when an Andy Grove steps aside at Intel or Bill Gates hands the reins to Steve Ballmer at Microsoft. It's somewhat the passing of the torch. I think it's a natural transition -- though a rather significant one in the history of this company,'' said Paul Swangard, managing director of the Warsaw Sports Marketing Center at the University of Oregon in Eugene.
``Those outside the company may see this as abrupt and significant. But I would suggest these are the best laid plans. The naming of two presidents several years ago was the first step,'' Swangard said.
The move follows three high profile resignations at Nike's shareholders' meeting in Portland this September.
At that meeting, the three oldest members of Nike's board of directors stepped down, citing increased scrutiny of the age of company directors among stockholders.
They include 84-year-old John Jaqua, who praised Knight's leadership.
``He has had his finger in the pie very solidly. His judgment has been solid on every major decision -- and I think he's irreplaceable.''
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