By Sara Germano and Joann S. Lublin 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (April 2, 2018).

Inside the Tiger Woods Center at Nike Inc. headquarters, hundreds of employees gathered on March 20 to hear a message from top executives: We need to change.

The event, part of an initiative to encourage men to be better allies for their female co-workers, happened five days after a leadership shake-up that came about after employees shared concerns about representation of women in the company's top ranks, women's pay and a culture some former employees have described as a boys club.

Among the panelists was Elliott Hill, a 30-year Nike veteran who had been promoted in the shuffle to president of consumer and marketplace. He told the crowd about his Texas upbringing by a single mother, according to one person in attendance.

"I'm not here because of the brand or because of the athletes or because of the product," Mr. Hill said, according to the person. "I'm here because of the people." He and Michael Spillane, another top Nike executive, told the group that the company needed to create a better environment for its employees.

Nike, maker of the world's best-selling sportswear, built its global empire through deft marketing that made competitiveness cool. Interviews with current and former employees say culture problems have persisted at the company for years. Some Nike veterans say when they tried to seek help for issues related to the work environment, they found human resources leaders unhelpful or in some cases disrespectful.

Nike says it is conducting a review of its human resources department and instituting mandatory manager training.

"When we discover issues, we take action. We are laser-focused on making Nike a more inclusive culture and accelerating diverse representation within our leadership teams," Chief Executive Mark Parker said in a statement.

Mr. Parker in a staff memo earlier in March said the company received complaints of inappropriate behavior. In the memo, he also said Trevor Edwards, who had been widely considered the next CEO, was resigning his position immediately and would remain at the company until August. Additionally, Jayme Martin, a charismatic deputy of Mr. Edwards, left the company. Mr. Edwards and Mr. Martin didn't respond to requests for comment.

Overseeing Nike's human-resources and employee-relations departments is an executive vice president who reports directly to the CEO. Nike hired David Ayre from PepsiCo Inc. for the position in 2007.

Several years ago, Nike conducted an investigation into complaints that Mr. Ayre was demeaning and condescending to others, according to people familiar with the matter. Mr. Ayre didn't respond to requests for comment.

Subsequently, Mr. Ayre agreed to seek counseling and meet with fellow executives to ask how he could improve, the people said. According to one person, he also then told a large group of colleagues, "My behavior has to change."

Mr. Edwards, whose position was Nike brand president, wielded control over all product categories and geographies as well as brand management. Being a close pal of Mr. Edwards was one way that helped men rise through the organization, people familiar with the matter say; some say they felt women weren't promoted as frequently and were subject to a more rigorous vetting process when they were promoted. Some people coined a catch phrase -- "FOT" or "friend of Trevor," according to former employees.

"If someone was rising quickly, it was likely they were FOT," said a former employee in Nike+, a digital sports division that Mr. Edwards spearheaded.

Former employees say culture problems have existed at Nike for years. In September 2002, the global sports-marketing team had several days of meetings in Bradenton, Fla., and on the last night, after dinner, a bus carrying the group of several dozen employees pulled up to a strip club, said two people who were present.

Loredana Ranza, who worked in the group at the time, said only four people didn't enter the strip club -- the three women on the trip, including herself, plus one male colleague.

"At the end of the day, you need to survive. You don't say, 'This is bad, ' you just think it, and you try to work around it," said Ms. Ranza, who left Nike in 2008 and later worked at rival Puma SE. She filed a lawsuit in 2016, currently pending in the Netherlands, where Nike's European offices are based, alleging gender and age discrimination. Nike didn't comment on the case.

After a Nike designer, Marc Dolce, left to work for rival Adidas AG, two Nike vice presidents, Brian Zappitello and Dirk-Jan van Hameren, left vulgar, disparaging comments on his Instagram post of a new Adidas sneaker design in 2016. Current and former employees said they were disappointed Nike didn't openly condemn the comments. Both executives remain at Nike; in January Mr. van Hameren was promoted to chief marketing officer. Neither responded to requests for comment.

Last year, Nike received a complaint that Mr. Ayre was creating a hostile work environment, which triggered a second investigation into the HR chief, according to people familiar with the matter.

In July, Mr. Parker held an annual leadership team meeting at a resort in Oregon's Willamette Valley, where he informed Mr. Ayre he could no longer stay, one person said.

The next day, Nike announced Mr. Ayre's retirement and the promotion of Monique Matheson, a 19-year Nike veteran and former chief talent and diversity officer, to replace him.

Around the same time, women at Nike who were frustrated with the culture felt it was time to do some homework. After watching several female leaders depart, they drew up a survey to circulate quietly among staff. They wanted to gather information about pay equity and allegations of inappropriate workplace behavior, people familiar with the survey said.

The survey came to the attention of Mr. Parker in recent weeks, these people said. Soon after, the company started an internal investigation that led to the management shake-up in March.

Write to Sara Germano at sara.germano@wsj.com and Joann S. Lublin at joann.lublin@wsj.com

 

(END) Dow Jones Newswires

April 02, 2018 02:47 ET (06:47 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.
Nike (NYSE:NKE)
Historical Stock Chart
From Feb 2024 to Mar 2024 Click Here for more Nike Charts.
Nike (NYSE:NKE)
Historical Stock Chart
From Mar 2023 to Mar 2024 Click Here for more Nike Charts.