Nike’s New CEO Elliot Hill To Take The Reigns As Company Pins Hopes On Growth

Following a downward run of the company’s stock, Nike’s Thursday announcement that company veteran, Elliott Hill will replace John Donahoe as CEO elicited a marked increase on the stock exchange and cheers from insiders.

Nike Appoints New CEO

Elliot Hill, 60, was appointed as the new CEO and a board member effective October 14 while the incumbent, John Donahoe will stay on until January 31 as an adviser to Nike. Mark Parker, Nike Executive Chairman is excited to welcome Hill back to Nike.

Hill left the company in 2020 after 32 years and a tenure as president at Nike. The company’s sales grew from $1 billion to over $39 billion during this time. Nike is expected to post a sales decrease this year and Hill will be key to their turnaround strategy.

Nike cofounder, Phil Knight said in a statement that Hill’s “understanding of Nike and leadership is what’s needed.”

Aside from Hill, Tom Peddie also returned to Nike- a move designed to improve sales. Hill is eager to reconnect with the many people he worked previously and expressed excitement at building new, impactful relationships to move the company ahead.

His compensation package was filed with the U.S. Securities and Exchange Commission and incorporates a $1.5 million annual salary with a yearly bonus of a maximum of $3 million. If the company performs as it expects, Nike has offered further structured long-term bonuses of $15.5 million annually.

Donohoe said, “It’s been an honor and privilege to be part of this incredible company.”

Nike Stock Climbs On News Of CEO’s Exit

Despite reaching his $50 billion annual sales goal, Donahoe had some downs, including heavy bets on direct sales through Nike stores and apps, and cessions of shelf space at third-party retailers to competitors.

Focussing on reliably popular retro styles, sneaker fans and athletes looking for something new were alienated- an opportunity to gain market share competitors were quick to grab.

His focus on driving sales left some employees considering whether the company had lost its edge. Morale suffered as, despite Donahoe’s focus on driving sales, they slipped, leading to an announcement of plans to cut costs by $2 billion and two rounds of layoffs.

Current and former employees describe Hill as an authentic leader and a person who understands the company’s roots in sports. They appear hopeful.  Donahoe recognized in a statement that it was time to make a leadership change and indicated that Hill was the right person.

Nike stock fell steadily since 2022 except for a respite during the pandemic. It closed at $80.98 on  Thursday, representing an approximate 20% decrease since Donohoe took the reigns in January 2020 compared to a broad basket of equities on S & P which climbed 75%.

On Wall Street, Nike stock was up 10% in after-hours trading immediately following the announcement. Lois Sakany, director of retail research for the investor advisory firm OTR Global noted that the company is still in turnaround and the new appointment doesn’t necessarily speed up the recovery timeline.

Hill said in a statement, “I’m ready to help lead Nike to an even brighter future.”