Nike Inc. ‘Free’ model sneakers sit on display in the window of the Nike Store inside the Westfield London shopping mall, operated by Westfield Corp. in London, U.K. (Photographer: Jason Alden/Bloomberg)

Nike Executive Departures Accompany Reports of Demeaning Conduct

(Bloomberg) -- The abrupt exit of two Nike Inc. executives this week has sparked concerns about conduct toward women at the world’s largest athletic brand, including what the Wall Street Journal described as the bullying of women and workers from outside the U.S.

Nike said on Friday that Jayme Martin, vice president and general manager of global categories, was no longer with the company. He reported to Trevor Edwards, president of Nike’s brand and a one-time CEO candidate, who stepped down from that role on Thursday.

Nike cast a cloud over the departures by saying that it was reviewing misconduct at the company, though it declined to directly link the behavior to either executive.

“There had been conduct inconsistent with Nike’s principles and we are taking the appropriate actions,” spokesman Greg Rossiter said. There have been no direct allegations against the 55-year-old Edwards, Rossiter said.

The Journal reported that Edwards and Martin protected male employees who mistreated women at the company. These subordinates bullied Nike workers in other departments, including people from other countries, the newspaper said.

In announcing Edwards’s exit, Nike said that current Chief Executive Officer Mark Parker will stay in the job beyond 2020, delaying a potential succession contest.

In an internal memo alerting employees to Edwards’s resignation, Parker mentioned reports of “behavior occurring within our organization that do not reflect our core values of inclusivity, respect and empowerment,” according to the Journal. The memo didn’t describe the complaints or connect them to Edwards, the newspaper reported. “We’ve heard from strong and courageous employees,” Parker said.

The reshuffling comes as Nike tries to cope with a sales slump in its key North American market. Adidas AG has been taking market share, and the industry is scrambling to adapt to shifting buying patterns. To cope, Nike has forged ties with Amazon.com Inc. and is trying to rely less on retailers that are “mediocre” -- a term Edwards himself used.

With Edwards out as steward of the Nike brand, the turnaround effort now falls to the other executives.

No Financial Omen

The shake-up doesn’t seem to be a sign of “business deterioration,” Wedbush analyst Christopher Svezia said in a report. “We are also encouraged by Mr. Parker’s extended tenure as CEO, which we argue is good for the company.”

Investors were mostly unfazed. Nike’s stock fell less than 1 percent on Friday to $65.91. It had climbed 6.1 percent this year through Thursday’s close, a sign that shareholders are hopeful its comeback efforts are taking hold.

Parker will turn 65 in 2020 and has been in the CEO position for more than a decade. That’s spurred speculation that a changing of the guard was being planned by that year.

Succession Race

Edwards was one of a handful of executives in line to potentially move into the top job. The others include Eric Sprunk, chief operating officer, and Michael Spillane, who oversees design, products and merchandising. Another executive, Elliott Hill, was elevated to the role of overseeing the consumer and marketplace division as part of Thursday’s announcement.

Edwards, one of the highest-profile African-American executives in the industry, will remain an adviser to Parker during the transition. The Beaverton, Oregon-based company didn’t immediately respond to a request to speak with Edwards.

“I am committed to stay in my role as chairman, president and CEO beyond 2020,” Parker said in a statement. “Trevor has decided to retire.”

While Nike could look outside for its next CEO, that scenario isn’t likely. The company took that step once before, when it named William Perez as CEO in 2004 to replace co-founder Phil Knight. Perez lasted less than two years before Knight asked him to resign.

The company then named Parker, a Nike lifer, as his replacement.

©2018 Bloomberg L.P.

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