One day after Nike Inc. released the initial details of its succession strategy for founder, Phil Knight, whose helmed the mega company for 40-plus years, the industry has remained fairly quiet.
Nike’s announcement—which included Knight’s recommendation that CEO Mark Parker takeover his chairmanship—seemed to lack the element of surprise that gets insiders buzzing.
Matt Powell, sports-industry analyst with NPD Group, said Nike’s succession plan is really the culmination of a transition strategy that began as early as 2013 with the retirement of Nike’s brand president, Charlie Denson.
The slow and methodical nature of the process, however, should prove encouraging for investors and market watchers, Powell said.
“[Stakeholders] should feel good about this—it’s orderly and well thought out—no one is doing anything abruptly,” said Powell of Nike’s announcement. “This is reassuring.”
Meanwhile, Knight’s strategy of creating a limited liability company in which to place his Class A Stock signals his efforts to retain influence at the firm, insiders say.
While the fact that the founder and long-time chairman wants to retain control at the company he created and nurtured is yet another unsurprising element of the firm’s announcement, his method of creating an LLC is somewhat unique, experts say.
Knight owned 75 percent of Nike’s Class A voting stock and now his new company, Swoosh LLC, will take over that majority ownership.
“We’ve never heard of someone creating a company to transfer ownership of their shares before but I think it’s a way of putting another layer of protection around those shares,” explained Powell.
Nike also named Knight’s son, Travis Knight, to the firm’s board of directors, the company said yesterday.
“I would think adding family to the board means Knight wants to maintain at least some family influence,” noted B. Riley & Co. LLC analyst Jeff Van Sinderen.
Powell said he views the addition of Travis as an important—sensible, even—component in the transition strategy for one major reason.
“At some point Travis will inherit the company—they have to start getting him involved,” said Powell.
The sports-industry analyst also posits that Parker will hold both the chairmanship and CEO titles for some time before eventually relinquishing his CEO post.