Nike cofounder Phil Knight is planning to step down as chairman of the $28 billion apparel business, the company said in a statement Tuesday.
Knight named Mark Parker, the current CEO of Nike, as his choice to become the next chairman of the company. The Nike board of directors expects to officially appoint a new chairman sometime in 2016. Nike said Knight, 77, will continue to be involved with the company after he steps down from his current role.
“For me, Nike has always been more than just a company – it has been my life’s passion,” Knight said in the statement. “Over the years, I’ve spent a great deal of time considering how I might someday evolve my ownership and leadership of Nike in a way that benefits all of our stakeholders.”
There is no bigger stakeholder at Nike than Knight, who is worth an estimated $24.3 billion and has the majority of his net worth tied up in Nike stock. Knight announced Tuesday that he had created a limited liability company called Swoosh, LLC, which will hold the bulk of his Nike shares. He transferred $13.9 billion worth of Nike stock, 15% of the company, into the LLC on Tuesday, according to SEC filings.
The LLC will have a separate board of directors with five votes. Knight will hold two of the votes, CEO Parker will hold one, eBay CEO John Donahoe II will hold another, and FedEx CFO Alan Graf Jr. will hold the fifth. Parker, Graf Jr., and Donahoe also sit on the Nike board of directors.
The company announced that Knight's son Travis Knight, 41, who is president and CEO of an animation studio called LAIKA, LLC, will join Nike's board of directors.
A former track star at the University of Oregon, Knight wrote the business plan for Nike while he was getting his MBA at Stanford. After graduating in 1962, he traveled the world and managed to talk his way into meetings with Japanese shoe suppliers. Back in the States, he and his old track coach Bill Bowerman each agreed to put up $500 to start selling the Japanese running shoes. The company began as Blue Ribbon Sports, and Knight sold the first shoes out of the trunk of his car. In 1978, he changed the name of the company to Nike, naming it after the Greek goddess of victory.
The next year, Parker joined Nike as a shoe designer. At the time, the shoe retailer was still a fledgling business, but Parker had heard of it while running for Penn State in college. One year after arriving, Parker started in the company's research lab, where he worked closely with Bowerman, whose early shoe designs had been inspired by his wife's waffle iron.
Parker climbed the ranks inside the company but was passed up as Nike CEO in 2004, when Knight stepped down as boss for the first time. Instead Knight hired William Perez, who had proven his marketing skills at household products company S.C. Johnson & Son.
Perez didn't last long. With Nike's stock deflating, Knight quickly realized he needed a sports guy running his company, not a marketing guy. He axed Perez and brought on Parker to be the CEO in 2006.
"Phil founded Nike to serve athletes," Parker said in the statement. "That vision and inspiration continues to drive our success today around the world. I have been privileged to work with Phil for over 35 years, and Nike's exceptional management team and I are committed to building on Phil’s vision to drive the next era of growth for Nike."
