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Document 17 of 67.

Copyright 1998 Information Access Company,
a Thomson Corporation Company;
ASAP
Copyright 1998 Fairchild Publications Inc.
Footwear News

August 24, 1998

SECTION: No. 34, Vol. 54; Pg. 10; ISSN: 0162-914X

IAC-ACC-NO: 21092781

LENGTH: 515 words

HEADLINE: NIKE'S KNIGHT TAKES 47.8% PAY SLASH; Phil Knight

BYLINE: Malone, Scott

BODY:
NEW YORK -- Phil Knight, chairman and CEO of Nike Inc., and the company's other top executives shared in the company's pain last year, taking home no bonuses and in Knight's case seeing a 47.8 percent pay cut.

Knight received no bonus in fiscal 1998, earning a salary of $ 1.1 million, down from a combined salary and bonus of $ 2.1 million the prior year. That change dropped the executive's name from the roster of the 10 highest-paid executives in the shoe industry, putting him behind the likes of Paul Fireman, CEO of Reebok International Ltd.; Mickey Robinson, CEO of Footstar Inc.; and Steven Nichols, CEO of K-Swiss Inc.

In Nike's recently released annual report and proxy statement, Knight dissected the growing pains that lead to the 49.8 percent decline in 1998 income at the Beaverton, Ore., company, and warned that the company will continue to suffer until Asia's economic situation stabilizes -- which he expects to happen in two years.

"We will not get over $ 2.68 per share, our 1997 number, until Asia comes back for us. To come back does not mean Asia has to be booming again, but it does mean we need to see the bottom of the slide, so that retailers are again confident enough to order several months in advance. Asia is a big part of this company's heritage, and it remains a big part of our future," Knight wrote in a letter to shareholders.

"It is a great long-run play," he wrote of Asia. "But, how long is long? Well, I'm confident I will personally predict the exact date of the Asia turnaround. It's just a matter of how many predictions that will take. For now, I believe we'll see the changes we need in two years, not five."

Nike earned $ 1.38 per share in the year ended May 31.

Knight also wrote that some of Nike's recent troubles stem from the rapid growth the company has experienced in recent years.

"Most of our troubles are real symptoms of a larger, more difficult problem: We are a very well-managed $ 5 billion company. Right now, though, we are a $ 10 billion company trying to get to $ 15 billion. Management has been stretched too thin. That's how you get problems," the letter says.

Nike posted $ 9.55 billion in sales last year.

Knight also said Nike has gotten its inventory problems under control, writing that, "our inventories are 'in line,' several months ahead of our original estimates."

In Nike's proxy statement, the company's compensation committee wrote, "In reviewing Mr. Knight's performance, the committee focused primarily on the company's performance in fiscal year 1998, which resulted in lower earnings...consistent with the plans, Mr. Knight received no bonus under the executive performance sharing plan." The committee also wrote that because Knight is a "substantial shareholder in the company," he received no stock options.

Knight's 1998 salary would represent 0.3 percent of the company's net income for the year, essentially flat with that number last year. Knight owns 34 percent of the company's Class B shares.

Nike's four other highest-paid executives also received no bonuses.

LANGUAGE: ENGLISH

IAC-CREATE-DATE: October 23, 1998

LOAD-DATE: October 24, 1998