Nike Stock Price Falls on News of Phil Knight
Building on the fitness and distance running craze of the decade, Bowerman molded shoe soles with his wife's waffle iron and Knight hawked the footwear from the trunk of his car to build a company that would challenge early market rival Adidas and eventually overtake it.
On Thursday, in a surprise announcement, Knight said he would resign as president and CEO, in effect giving up the reins of daily management while retaining h Nike Free 3.0 V2 is chairman's title.
Knight, however, suggested he would still play a major role as "an active chairman," adding in a humorous note that he would work on his status as the "world's No. 1 sports fan."
Effective Dec. 28, Knight will be replaced as Nike president and CEO by William D. Johnson Son Inc. Johnson, heading its operations in Spain and Latin America before rising to the top management posts in 1996.
Knight, in his resignation announcement, said he felt Perez not only had experience building international brand names, but also "knows how to operate a highly socially responsible global business."
Nike shares dropped $2.69 to $82.31 in on the New York Stock Exchange (
Knight has been defensive about repeated criticism over conditions at the contract factories in Asia and Latin America where most of Nike's production is based, including withholding major donations to the University of Oregon (
But Knight emerged as one of the leading corporate figures to organize efforts to improve factory conditions when he urged other companies to join the Fair Labor Association (
Some of Nike's leading critics have said they targeted the company because it was the largest in the industry and got the most media attention, providing the best way to apply pressure for reforms and overall corporate responsibility.
Nike has become the dominant force in the athletic equipment market with $12.3 billion in sales for its 2004 fiscal year.
It has acquired many other companies, including basketball shoe maker Converse, and signed a long list of celebrity athletes to endorse its products, including Michael Jordan and Tiger Woods, which led Nike to create entire new divisions around the basketball and golf stars.
Nike has also built a fortune for Knight, ranked No. 22 among the wealthiest Americans by Forbes magazine in September with an estimated net worth of $7.4 billion.
Knight still owns 72 million about 28 percent of the voting shares of Nike Class B stock, worth about $6.12 billion, according to filings with the Securities and Exchange Commission (
"It can be likened to when an Andy Grove steps aside at Intel or Bill Gates hands the reins to Steve Ballmer at Microsoft. It's somewhat the passing of the torch. I think it's a natural transition though a rather significant one in the history of this c nike ompany," said Paul Swangard, managing director of the Warsaw Sports Marketing Center at the University of Oregon.
Perez, however, was considered a top choice.
"He's regarded very highly. He's considered to be smart, tough, disciplined and a global player," said Gary Stibel, a former Procter Gamble Co. executive who now runs the New England Consulting Group in Westport, Conn.
Building on the fitness and distance running craze of the decade, Bowerman molded shoe soles with his wife's waffle iron and Knight hawked the footwear from the trunk of his car to build a company that would challenge early market rival Adidas and eventually overtake it.
On Thursday, in a surprise announcement, Knight said he would resign as president and CEO, in effect giving up the reins of daily management while retaining h Nike Free 3.0 V2 is chairman's title.
Knight, however, suggested he would still play a major role as "an active chairman," adding in a humorous note that he would work on his status as the "world's No. 1 sports fan."
Effective Dec. 28, Knight will be replaced as Nike president and CEO by William D. Johnson Son Inc. Johnson, heading its operations in Spain and Latin America before rising to the top management posts in 1996.
Knight, in his resignation announcement, said he felt Perez not only had experience building international brand names, but also "knows how to operate a highly socially responsible global business."
Nike shares dropped $2.69 to $82.31 in on the New York Stock Exchange (
Knight has been defensive about repeated criticism over conditions at the contract factories in Asia and Latin America where most of Nike's production is based, including withholding major donations to the University of Oregon (
But Knight emerged as one of the leading corporate figures to organize efforts to improve factory conditions when he urged other companies to join the Fair Labor Association (
Some of Nike's leading critics have said they targeted the company because it was the largest in the industry and got the most media attention, providing the best way to apply pressure for reforms and overall corporate responsibility.
Nike has become the dominant force in the athletic equipment market with $12.3 billion in sales for its 2004 fiscal year.
It has acquired many other companies, including basketball shoe maker Converse, and signed a long list of celebrity athletes to endorse its products, including Michael Jordan and Tiger Woods, which led Nike to create entire new divisions around the basketball and golf stars.
Nike has also built a fortune for Knight, ranked No. 22 among the wealthiest Americans by Forbes magazine in September with an estimated net worth of $7.4 billion.
Knight still owns 72 million about 28 percent of the voting shares of Nike Class B stock, worth about $6.12 billion, according to filings with the Securities and Exchange Commission (
"It can be likened to when an Andy Grove steps aside at Intel or Bill Gates hands the reins to Steve Ballmer at Microsoft. It's somewhat the passing of the torch. I think it's a natural transition though a rather significant one in the history of this c nike ompany," said Paul Swangard, managing director of the Warsaw Sports Marketing Center at the University of Oregon.
Perez, however, was considered a top choice.
"He's regarded very highly. He's considered to be smart, tough, disciplined and a global player," said Gary Stibel, a former Procter Gamble Co. executive who now runs the New England Consulting Group in Westport, Conn.
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