William Perez has resigned as the president and chief executive of Nike, the world’s largest sports shoe manufacturer, after just over a year in the job following a disagreement over leadership with founder and chairman, Philip Knight.
He will receive a payoff worth at least $4.55 million, representing two year’s annual salary and an annual bonus under a “performance sharing plan” of at least $1.75 million.
As part of the “termination agreement” between Mr Perez and the company, Nike has also agreed to buy his house in Portland, Oregon for $3.6 million, including reimbursing him for “payments incurred to remodel and furnish the house”, according to a filing with the Securities and Exchange Commission, the American regulator.
As well as repaying approximately $150,000 of moving costs, Nike has agreed to release all restrictions on Mr Perez’s 66,667 company shares and a further 100,000 he was allocated on his arrival at the company.
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Together these shares are worth more than $14 million based on Friday’s close for Nike shares of $84.20.
Mr Perez will stay on at Nike for a maximum of 60 days while he consults with the company on what it described as “transition matters”. He will be paid a maximum of $10,000 per month during the consultation period.
As it confirmed his departure today Nike immediately anointed the group’s co-president, Mark Parker, to be Mr Perez’s replacement.
Mr Parker has worked at Nike for 27 years and his appointment appears to reverse the group’s decision when it originally hired Mr Perez to go outside the company for a new chief executive.
Nike recruited Mr Perez in December 2004 from SC Johnson, the household cleaning products group where he had been working for 34 years.
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Nike did not go into precise detail about the nature of the disagreement with Mr Knight, except to say the split was over “differences regarding leadership” and that the board and Mr Perez had mutually agreed to end his relationship “without cause”.
Mr Knight said: “Succession at any company is challenging, and unfortunately the expectations that Bill and I and others had when he joined the company a year ago didn’t play out as we had hoped. I want to personally thank Bill for his dedication and commitment over the past year.”
Mr Perez added that: “Phil and I weren’t entirely aligned on some aspects of how to best lead the company’s long-term growth. It became obvious to me that the long-term interests of the company would be best served by my resignation.”
Shares in Nike, listed on the New York Stock Exchange, value the sports shoe specialist at $16.3 billion.