eCommerce Strategy Consultant - Rick Watson - RMW Commerce Consulting

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John Donahoe Was Pushed: But He Will Make More Than His Successor

I guess there is something to Bain negotiation skills if this is true.

You know there is something wrong with CEO salary when the CEO who is pushed to resign in defeat makes more than the incoming CEO hired to turnaround. The new CEO Hill will make $27 million. Donahoe's comp package was valued at $29 million. Of course it was originally valued at $32 million, but.. you know, that pesky stock price.

The Board of Nike made one cardinal mistake: hiring Donahoe at all. And who can forget this famous quote:

"I remember well when John Donahoe turned around eBay"

- No one ever said this.

Donaohoe instead made several of his own mistakes with Nike:

* Not restarting Nike's diminishing innovation pipeline.

* Wiping out entire channels of wholesale business without allowing time for their replacements.

There's more of course, but these are the cardinal sins in my mind.

You've heard this quote before, right?

"Our customers want to shop in fewer places."

Oh you haven't? It seems like a simple principle but it was forgotten.

Nike is innovation plus marketing. Tech is an enabler, but it was never the entire story. I am suspecting that Nike started to get activist investors sniffing around with a gold-plated shovel to put dirt on top of JD. Stock popped 8% after hours tells you all you need to know.

And Nike's Board was in no mood to be in a poor performing economy with a poor performing CEO, with no innovation pipeline, and flat marketing.

Hill as an insider at least has the "culture thing" to restart the innovation pipeline, as he is essentially a Nike lifer, starting as a sales rep in 1998.

A powerful innovation pipeline and cooler marketing in a down economy is much better than neither in a down economy. Here's to hoping that Mr. Hill reboots Nike - the right way this time.