Nike CEO Donahoe to Retire; Hill to Return as Successor — 3rd Update

By Sabela Ojea

Nike Chief Executive John Donahoe is leaving the sneaker company in January.

Company veteran Elliott Hill is returning to Nike and will become CEO on Oct. 14. He previously served as Nike's consumer president until Donahoe took over and shuffled the sportswear company's leadership ranks about a month into the job.

Shares rose 10% to $89.26 on the news in after-hours trading. The stock was down 25% this year at the market close on Thursday.

"The board concluded it was clear Elliott's global expertise, leadership style, and deep understanding of our industry and partners, paired with his passion for sport, our brands, products, consumers, athletes, and employees, make him the right person to lead Nike's next stage of growth," Executive Chairman Mark Parker said.

Donahoe took the top job in January 2020 after serving on the board since 2014. Under his leadership, the company saw annual sales grow from about $37 billion to over $51 billion. But its stock has stumbled this year, weighed down by its decision to coast on popular shoe lines instead of innovating. Inflated inventories resulted in deep discounts on apparel and footwear, further weakening earnings.

"For fiscal 2024, revenue growth was up approximately 1% on a currency-neutral basis, and earnings per share grew 15%," Donahoe said at Nike's annual shareholder meeting this month. "This simply doesn't meet the expectations we set for ourselves, and today we are committed to getting after the opportunities we see."

Nike in February said it would lay off more than 1,600 employees in a plan to shed $2 billion in costs over the next three years.

Hill's compensation package will include a base salary of $1.5 million, plus a target annual bonus of up to 200% of that base salary, as well as an annual target long-term incentive award of $15.5 million.

Nike is expected to report earnings for its fiscal first quarter on Oct. 1.

Write to Sabela Ojea at sabela.ojea@wsj.com

(END) Dow Jones Newswires

September 19, 2024 17:35 ET (21:35 GMT)

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