Who Will Be The Next CEO of Nike? Nike has grown tremendously since it started as Blue Ribbon Sports in 1964. Even after incorporating under the Nike name in 1971 and going public in 1980, the sports apparel company keeps thriving. When shares debuted, investors could buy them for $10.50. Today, Nike share prices are 13x higher, and that’s not even factoring in NKE share splits.
As of early 2021, Nike has had four CEOs. A new CEO will soon take charge of the international brand, though. Shifts within the company may influence how investors feel about its future prospects.
Who Is The CEO Of Nike?
John Donahoe became president and CEO of Nike on January 13, 2020. The 60-year-old graduate of Dartmouth College and Stanford Graduate School of Business has spent much of his career in executive positions.
Bain & Company, one of the country’s most prominent management consultancies, chose Donahoe as its president and CEO in 1999.
In 2017, Donahoe took the president and CEO positions at ServiceNow (NOW), a cloud-computing company focused on business services.
John Donahoe Leadership Style
John Donahoe says that he uses a servant leadership style of management. He insists that previous Nike CEOs have also followed servant leadership roles.
To Donahoe, servant leadership makes it possible for organizations to thrive during ups and downs. Without it, resilience often falters and companies lose direction. CEOs can contribute to success by keeping service at the center of his or her mission.
Typically, servant leadership involves working with other executives, managers, and employees to reach a common goal.
Donahoe takes the style a step further by considering service to customers. After all, customers ultimately decide whether a company will maintain its success. When companies forget about serving their customers, consumers will turn to other brands.
Some key characteristics of servant leadership include:
- Listening in a way that gives your full attention to others.
- Empathizing with people to understand their concerns and motivations.
- Consensus-building that gets team members on the same page.
- Foresight that anticipates challenges and considers ways evolve.
Many experts consider servant leadership the most successful option for guiding companies.
John Donahoe Salary and Net Worth
It’s always difficult to determine a wealthy person’s net worth. Donahoe, for example, has assets with variable values. Stock and property values can change daily, so his net worth can change just as often. And he’s not on the Forbest billionaire list so his assets are privately held for the most part.
Overall, though, most estimates suggest that John Donahoe was worth at least $130 million in 2020. His net worth may have grown considerably since taking the helm at Nike.
John Donahoe earns $18.5 million per year as president and CEO of Nike. He received $45 million in Nike stock as a signing bonus. Nike also expects to pay Donahoe annual performance bonuses. How much he makes, therefore, will depend on how much Nike earns each year.
Who Will Be Next CEO Of Nike?
John Donahoe will probably remain the president and CEO of Nike for at least five years. It’s unlikely that he would want to retire before reaching 70 years old. Even if he retired at 65, though, five years is a long time to predict who will take over as CEO of Nike.
At this point, it’s impossible to say who would replace John Donahoe. Over the next decade, any number of executives could emerge as potential options.
It’s possible that Andy Campion, Nike’s current COO, could get moved up to the CEO position. It seems more likely, though, that the company and its board would look outside for new talent. Given the recent importance of digital technology, Nike might turn to Silicon Valley to find a new CEO.
Will Nike Revenues Rise Under CEO?
Nike has already grown under John Donahoe’s leadership. Some of that growth comes from acquiring the data integration platform Datalogue. Datalogue’s product relies on machine learning to provide actionable insights that lead to digital sales growth.
During the first quarter of 2021, Nike’s digital revenue reached $1 billion. Some of the digital growth, however, likely comes from interest in the Nike app.
Demand for the Nike app grew by about 90 percent during 2020 as many people avoided gyms to protect themselves from coronavirus. Assuming that people keep following their new exercise habits, Nike’s market share in the digital realm should keep growing.
Currently, it seems likely that Nike’s digital brand will remain successful. The app uses a membership model that encourages users to continue interacting with the app and purchasing Nike’s physical products.
How Fast Can Nike Profits Grow?
Nike’s Q1 growth suggests to some analysts that the company does not have much room for improvement. The opposite, however, is probably true.
Acquiring companies with expertise in digital analytics could mean that Nike has a whole new era ahead of it. That era could include substantial growth as it releases new physical and digital products, improves how it interacts with consumers, and streamlines its processes.
Some projections show that Nike could easily exceed $160 per share during the second quarter. Investors concerned that buying Nike shares at current prices will limit their returns should consider the possibility of short-term and long-term growth.
Is Nike Stock Undervalued?
Nike stock has been volatile over the last year, ranging from about $84 to nearly $148. This isn’t surprising considering that the stock market took plunged in 2020 as people worried about how Covid-19 would affect individual companies and the economy overall.
Nike’s prospects look good considering how quickly its share price recovered in 2020. Nike’s valuation shows an average analyst estimate of $162.94. The company isn’t necessarily undervalued. But it has plenty of room for growth in an industry that many people believe was limited.
Who Will Be The Next CEO of Nike? Conclusion
Regardless of whether Nike stock prices grow quickly, the company remains a solid investment option. Even if shares don’t exceed their fair market value near term, they should withstand the fluctuations of the market well given the strength of the brand alone.
That leaves room for an uptick in the future. Purchasing shares now could mean that investors add stability to their portfolios while also increasing opportunities for growth without accepting significant risk.
The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.