The chief executive of Nike will collect at least $14m (£8m) in severance pay for 13 months' work after he was ousted from the helm of the sports shoe group for not being up to the job.
The departure of Bill Perez is an embarrassment for Nike's founding chairman, Phil Knight, who admitted yesterday he had been wrong to appoint an outsider to run the sporting giant.
Nike poached Mr Perez from SC Johnson, the household cleaning products company behind Windex, after a two-year search for a successor to Mr Knight. The appointment amazed Wall Street because it was so out of character for a company that has historically rewarded loyalty.
In a frank admission of its skewed judgement, Nike has replaced Mr Perez with a company lifer, Mark Parker. The group blamed "differences regarding leadership" for its decision to fire Mr Perez.
Yesterday Mr Knight said Mr Perez had failed to "make the leap" from the packaged goods industry to the sporting world. "The canyon that was there to leap was too great." He added: "His failure to get his arms around the company led to confusion. Nike was operating at 80 per cent efficiency."
Analysts said the shake-up showed that Mr Knight had struggled to cede control of the company he built up with Bill Bowerman, a track coach at the University of Oregon. They also speculated the top two had clashed over strategic issues such as whether to buy Germany's Puma or stick with its existing portfolio, which includes Converse shoes and Bauer hockey supplies.
Jeff Edelman, of UBS Securities, said: "I expect part of the problem was that Perez was not a Nike guy, whereas Parker is. Perhaps Perez, despite his short one-year run, could see that he wouldn't be able to win support for his long-term strategic vision for all brands under the Nike umbrella."
Mr Knight sought to dispel rumours Nike was looking at Puma, telling investors: "We have got a full plate right now."
Mr Perez will pocket compensation worth $14m for the termination of his contract, excluding any gains he might make on 170,000 shares over which he has options. The severance package includes two years' annual salary of $1.4m, shares worth $5.4m and $3.6m to buy his family home in Portland, Oregon.
Mr Parker, 50, joined Nike 27 years ago as a product designer. Most recently he has headed the Nike brand.Reuse content