The Crowd Cheers! JD Is Out At Nike, Popular Veteran Elliott Hill Returns
Nike stunned the sneaker and finance world yesterday with news that embattled CEO John Donahoe was retiring from the storied athletic shoe and apparel firm. Donahoe is not only retiring from his role as president and CEO of Nike, he’s also stepping down from the board, which is still lead by his predecessor Mark Parker. Nike veteran Elliot Hill, who left the company around the same time Donahoe joined five years ago, will take over the reins effective October 14th.
The news, which caused the stock to pop close to 10%, is said to have been well received by the staff whose morale hasn’t risen about basement level since the company mandated they return to the work place following COVID in October 2023. As it happens, a lot of Nike people were attending internal meetings today when the news began to spread, prompting spontaneous rounds of applause throughout the campus.
The ultimate insider guy and the polar opposite of Donahoe, the Austin, Texas-born Hill, who is 60, started at Nike as an apparel intern in 1988 and was the president of consumer and marketplace when he retired in 2020.
Looking through the comments on LinkedIn and X, I have yet to find anything other than positive comments about his return. Described as a comfort food rehire meant to heal morale as much as take the helm of a deeply off-course ship, some are speculating he won’t be with the company for more than two-to-three years, a temporary salve, providing Nike with time to develop a longer term solution.
Finally giving up the ghost on seemingly unwavering support of Donahoe provided even after horrendous full-year earnings in June, Nike founder Phil Knight issued a statement welcoming the change. “Leadership changes are never easy, they test you, they challenge you, but this transition has been handled with remarkable thoughtfulness and an unwavering commitment to Nike,” Knight said in a statement to CNBC. “Looking forward, I couldn’t be more excited to welcome Elliott back to the team. His experience, understanding of Nike and leadership is exactly what’s needed at this moment. We’ve got a lot of work to do but I’m looking forward to seeing Nike back on its pace.”
Whoever eventually takes Hill’s spot, it’s a sure bet that person won’t be Nike president Heidi O’Neil, who was viewed as a potential CEO when she was announced as president of consumer and marketplace (Hill’s old job—ironic!) in May 2023. Widely disliked by Nike’s wholesale partners for leading the charge on the direct-to-consumer strategy when Donahoe took over, she’s retained her title as president though her standing as a leader no doubt took a dive as the strategy began to crumble and Nike was forced over the past two years to return to wholesale accounts it had shuttered with its hat in its hand.
Craig Williams, the president of Jordan, was also thought to be a CEO nominee, and while feedback on him has been solid, he joined Nike as a total outsider in 2019 and a move to CEO especially in the current moment of crisis was viewed as too soon.
Why Now Though?
It was widely believed that Donahoe—who would hit the five-year mark on his contract in January 2025—would announce he was stepping down from the role of CEO sometime in the months ahead. Narrowing down the timing even further, finance world protocol suggested he would announce the news at an annual investor meeting scheduled for November 19th.
It’s possible that once the board had a commitment from Hill, they decided to make the move as soon as regulatory ducks could be lined up. Why, after all, prolong the agony of defeat and have someone who was headed out the door lead another earnings call. If bad, results could be blamed on Donahoe who’s no longer present and if acceptable, they could be framed as the official start of a new chapter and book.
I’ve seen some speculation that Nike chopped Donahoe resigned in response to a recent string of bad coverage in the press (capped by a very long Bloomberg article titled “The Man Who Made Nike Uncool”), but the media is very much late to the party in comparison to Wall Street analysts who’ve been watching in half disbelief as the so-called bluechip Nike has bounced energetically down a hill since late 2021. Among investors, buzz around potential leadership change hit an all-time high in August when activist investor William Ackman’s firm Pershing Square Capital Management purchased three million shares of Nike stock.
Even as Knight was professing his full support of Donahoe, the board no doubt had begun playing its own game of thrones early in 2024. Then came the terrible full-year results in June followed by a lot of not good conversation with investors that forced the brand’s hand. The first palpable foreshadowing of Donahoe’s demise came in the form of Tom Peddie, who returned to the company in July as vice president of marketplace partners aka chief soothsayer for badly damaged wholesale relationships.
Like the new CEO, Peddie is an oldie but goodie who is well liked and viewed at good at his job. Boasting 30 years with the company, Peddie retired in 2020 from his role as Nike’s vice president and general manager of North America. When he returned, so did chatter that Little might return in some form, too.
Reflecting a likely dose of wishful thinking, talk of Little returning to Nike first began to pop up on thelayoff.com starting in January 2024. In a discussion about the news of Peddie returning in July it heated up further with one poster stating Little would return to Nike within four months, a lucky guess no doubt made by a hopeful employee skilled at reading corporate tea leaves.
Game Time!
As for Little’s strategy in the months ahead, I asked my good friend ChatGPT, and below is its reading of what might be ahead. So quick with it! (I agree with bullets 1-4, not so much No. 5)
As of now, Elliot Hill’s specific strategy for Nike has not been clearly outlined, since he was only recently announced as the new CEO. However, based on his long tenure and leadership roles within the company, several potential aspects of his strategy can be inferred:
Restoring Morale and Culture: Hill’s return is widely seen as a move to boost employee morale, which has reportedly been low since Nike mandated a return to the office in October 2023. His deep roots in Nike’s culture and his reputation as a well-liked leader suggest that one of his initial focuses will likely be on rebuilding internal morale and strengthening team cohesion.
Refocusing on Wholesale Relationships: During John Donahoe’s tenure, Nike shifted heavily toward a direct-to-consumer (DTC) strategy, straining relationships with wholesale partners. Hill’s prior experience in consumer and marketplace roles suggests he may take a more balanced approach, likely mending some of the damaged wholesale partnerships while maintaining a strong DTC presence.
Leveraging Consumer Insights and Marketing: Having overseen global sales and marketing, Hill has a strong grasp of consumer trends. His strategy may involve leveraging Nike’s deep connection to its consumers, using data-driven insights to fuel product development and more targeted marketing campaigns.
Stabilization Before Long-Term Vision: Hill’s reappointment has been described as a "Band-Aid" move, potentially suggesting that his role is to stabilize the company while preparing it for a more enduring solution. His focus may involve steadying Nike’s operations and positioning the company for sustainable growth before handing the reins to a future successor.
Strengthening Global Reach and Digital Expansion: Given his previous leadership in global geographies, Hill may also focus on expanding Nike’s international footprint and enhancing its digital strategy to stay competitive in the evolving retail landscape.
While these are educated predictions, Hill’s exact strategy will become clearer once he officially steps into the role and communicates his vision for Nike's future.