Nike Inc. (NYSE: NKE), in conjunction with Chairman Phil Knight, announced that it has started a process to provide long-term stability in the ownership and governance of Nike. This involves the transfer of ownership of Phil Knight’s shares to Swoosh LLC.

The whole point of this planning is to determine who is in line to succeed Knight as chairman. His own personal recommendation is Mark Parker, who has been Nike’s CEO since 2006. Another option would be the newest appointed board member and his son, Travis Knight.

As a result, Nike announced the start of a succession planning process that will conclude in the appointment of Nike’s next chairman, which is expected to occur sometime in 2016.

Knight said:

I have long felt a great responsibility to provide clarity and certainty for the long-term governance and leadership of NIKE and for my ultimate transition as Chairman. I have worked closely with the NIKE Board in developing this plan and in identifying the most qualified person to serve as my successor in this role. I believe Mark is the best choice to succeed me. He has been an outstanding CEO for the past nine years, and has demonstrated time and again his love for this Company and his clear vision for capturing the tremendous potential NIKE has to innovate, inspire, and drive growth. For myself, I intend to continue to work with NIKE and look forward to contributing to its future well after my chairmanship ends.

In terms of Swoosh LLC, Knight contributed 128.5 million shares of Nike class A common stock, which represents 15% of the combined total outstanding shares for the company. He also formed a board of directors for Swoosh to serve as its governing body to determine how the shares are voted and managed going forward.

Shares of Nike closed Tuesday up 0.3% at $108.02, in a 52-week trading range of $75.90 to $110.34. Following the announcement, shares were up an additional 0.4% at $108.50 in the after-hours trading session. The stock has a consensus analyst price target of $115.96.

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