I have written several articles on postings related to Big Tech, Social Media and Corporations. A list of links have been provided at bottom of this article for your convenience. This article will, however address different aspects on these Industries.
As can be seen by the graph above it is not uncommon for CEOs to leave major corporations every year. The reason are varied, from health, family, retirement, or simply being forced to resign for poor work performance. However, in the last few years the numbers have greatly increased. I will be following up this article with a podcast on “Common Sense AND Ramblings In America” discussing this subject with a guest speaker, in an attempt to decipher this trend. I have posted in the Addendum section a Fact Check on a possible reason for the large exodus of some of our CEOs, the covid virus. The publisher of his particular Fact Checking company, finds this reason to be suspect. However, it doesn’t propose alternate causes or reasons. That will be the purpose of the rest of this discussion.
The 37 most dramatic CEO exits in 2019, a record-breaking year for executive departures
More than 1,000 CEOs stepped down during the first three quarters of 2019, according to a report published by the staffing firm Challenger, Gray, & Christmas — 1,160 executives, to be exact.
Departures in the first nine months of 2019 exceeded the number of CEOs who stepped down during the first three quarters of 2008 (1,132), which was the height of the Great Recession. The year also had the highest CEO turnover in the first three quarters that Challenger, Gray, & Christmas has seen since the firm began tracking departures in 2002.
The tech sector had the second-highest number of CEO departures, at 154, including the high-profile departures of Adam Neumann from WeWork and Kevin Burns from Juul.
December 2019 saw a handful of major CEO exits, including Google cofounder Larry Page (who stepped down as CEO of Alphabet) and Away cofounder Steph Korey, who resigned after reports of toxic work culture. Boeing CEO Dennis Muilenburg stepped down as the company continues to battle the fallout of the 737 Max crisis.
Of the chief executives who left their positions during the first three quarters of 2019, 438 remained at their respective companies in different roles, 292 retired, and 103 moved to other companies, according to the report, which listed several other reasons for departures as well.
Here are the 37 most noteworthy CEO departures of 2019:
37. Dennis Muilenburg — Boeing–Boeing’s CEO Dennis Muilenburg is out as the company continues to battle the fallout of the 737 Max crisis
36. Steph Korey — Away–Away CEO steps down days after investigation revealed she perpetuated cutthroat culture of bullying and burnout at the buzzy luggage startup
35. Susan Desmond-Hellmann — Gates Foundation–The CEO of Bill and Melinda Gates’ multibillion-dollar nonprofit is stepping down
34. United Airlines — Oscar Munoz–United CEO Oscar Munoz is stepping down and transitioning to chairman in 2020, with president Scott Kirby taking his place
33. Expedia — Mark Okerstrom–Expedia’s CEO, who replaced Dara Khosrowshahi, is resigning along with the company’s CFO as part of a leadership shakeup
32. Alphabet — Larry Page–Alphabet CEO Larry Page and President Sergey Brin are stepping down
31. SoulCycle — Melanie Whelan–SoulCycle CEO Melanie Whelan has resigned, marking the end of a tumultuous year for the boutique fitness company
30. Gap — Art Peck–Gap CEO Art Peck is stepping down from the company
29. McDonald’s — Steve Easterbrook–McDonald’s CEO Steve Easterbrook was fired over a relationship with an employee
28. Wells Fargo — Tim Sloan–Wells Fargo CEO Tim Sloan is retiring
27. David’s Bridal — Scott Key–No reason given
26. Overstock — Patrick Byrne–Overstock founder Patrick Byrne was seemingly involved in a web of intrigue that involved a Russian spy and the FBI
25. Under Armour — Kevin Plank–Kevin Plank is stepping down as CEO of Under Armour
24. Care.com — Sheila Lirio Marcelo–No reason given
23. AutoNation — Carl Liebert–AutoNation replaces new CEO with a new CEO
22. PG&E — Geisha Williams–PG&E says CEO Geisha Williams steps down
21. Kraft Heinz — Bernardo Hees–Kraft Heinz CEO stepping down, Patricio named successor
20. Blue Apron — Brad Dickerson–Blue Apron is soaring after its CEO steps down
19. HP — Dion Weisler–The CEO of HP is stepping down ‘due to a family health matter,’ and will be replaced by an exec who started at the company as an intern
18. UnitedHealthcare — Steve Nelson–Interview with Retired UnitedHealthcare CEO Steve Nelson
17. Guess — Victor Herrero–Guess CEO Victor Herrero to step down
16. Mozilla — Chris Beard–No reason given
15. Boingo Wireless — Dave Hagan–No reason given
14. REI — Jerry Stritzke–REI leader resigns over undisclosed relationship
13. Bed, Bath & Beyond — Steven Temares–Bed Bath & Beyond has a new CEO 5 months after activist investors released a brutal presentation slamming the company’s leadership
12. Mattress Firm — Steve Stagner–Mattress Firm Board of Directors Announces the Resignation of Chief Executive Officer
11. Warner Bros. — Kevin Tsujihara–Warner Bros. CEO Kevin Tsujihara is stepping down following a report alleging he had a sexual relationship with an actress and promised to help her get roles
10. Rite Aid — John Standley–Rite Aid CEO John Standley To Step Down, Shares Up
9. Burlington Stores — Tom Kingsbury–No reason given
8. Best Buy — Hubert Joly–Best Buy CEO Hubert Joly steps down
7. New York Post — Jesse Angelo–News Corp Appoints Sean Giancola As CEO of New York Post
6. Colgate-Palmolive — Ian Cook–No reason given
5. MetLife — Steven Kandarian–MetLife names Khalaf CEO, Kandarian to retire
4. eBay — Devin Wenig–eBay CEO abruptly steps down as the company considers selling off assets
3. Juul — Kevin Burns–Juul’s CEO steps down as the e-cig company says it will stop all advertising in the US
2. Nike — Mark Parker–Nike CEO Mark Parker steps down just hours after Under Armour’s chief executive leaves his role
1. WeWork — Adam Neumann–The WeWork IPO fiasco of 2019, explained in 30 seconds
I list the reasons for these resignations where they were readily available. There were too many to take the time to delve into them. But looking at the names of these companies, the reasons for many of these departures is obvious. Poor performance of the company, case in point Mozilla. When it first came out, it was very popular, but it has been overpowered by google chrome, and its market share has dwindled. This is just one example.
Why have more than 1,300 CEOs left their post in the past year?
“Boards have been too compliant and they’re finally recognizing it’s their job to be vigilant about chief executive misbehavior,” said one advocate for corporate governance.
Chief executives are leaving in record numbers this year, with more than 1,332 stepping aside in the period from January through the end of October, according to new data released on Wednesday. While it’s not unusual to see CEOs fleeing in the middle of a recession, it is noteworthy to see such a rash of executive exits amid robust corporate earnings and record stock market highs.
Last month, 172 chief executives left their jobs, according to executive placement firm Challenger, Gray & Christmas. It’s the highest monthly number on record, and the year-to-date total outpaces even the wave of executive exits during the financial crisis.
The list of CEOs stepping down includes some who have left amid controversy. McDonald’s announced on Sunday it was “separating” Steve Easterbrook as president and CEO after he admitted having a consensual affair with another employee. WeWork’s founder and CEO Adam Neumann stepped down two weeks ago, accepting a $1.7 billion golden parachute in exchange for walking away from a disastrous IPO. That same week, Kevin Plank, the billionaire founder of leisure wear firm Under Armour, confirmed he was stepping down. Under Armour confirmed this week it is the subject of a federal accounting probe. Nike’s longtime CEO Mike Parker resigned the same day, as did the head of eBay.
Controversy or not, it’s a pace not seen since 2002. The last big wave of CEO departures came in 2008, at the start of the financial crisis, according to the company’s data.
“You expect a high turnover during a recession period,” Andrew Challenger, the company’s vice president, told NBC News. “To see more turnover during a period where companies are doing very well is surprising.”
However, plump exit packages can make it tempting for chief executives to throw in the towel. Fears of an impending recession may also prompt leaders to step down to get ahead of risks to their legacy, said Nell Minnow, an advocate for corporate governance and vice chair of ValueEdge Advisors.
The #MeToo movement has felled a fair number of leaders, from CBS chairman and CEO Les Moonves to billionaire casino magnate Steve Wynn and Intel’s chief Brian Krzanich. It’s a sign not just of heightened accountability, but of investor pressure, experts say.
“You could say there’s a cancel culture in the boardroom,” said Minnow. “Boards have been too compliant and they’re finally recognizing it’s their job to be vigilant about chief executive misbehavior.”
Typically, chief executives last just five years in their jobs, according to a study from business consultancy PricewaterhouseCoopers, which also found that in 2018 more chief executives left because of lapses in ethical conduct than for the typical complaint of poor financial performance.
“McDonald’s is yet another example of how the #MeToo movement has entered the boardroom,” said Amelia Miazad, director of the Business in Society Institute at the University of California Berkeley Law school. “We can expect to see more corporate boards institute a zero tolerance policy.”
However, in some cases, pressure from activists and regulators can end up pushing boards to oust a leader for no reason other than “a stock pop,” said Jeffrey Sonnenfeld of the Yale School of Management, who has been studying chief executives since the 1970s.
“They go for the symbolism of sacrificing a CEO. That just creates disruption and many, many good people have been forced from office,” Sonnenfeld told NBC News, noting that companies who fail to genuinely address values and issues simply end up with another leader to face the music.
One bright spot in Wednesday’s report is that gender equality can benefit from changes at the top, with women replacing men in top jobs in greater numbers. In 2010, 77 women replaced men in the top leadership position. In 2019 through October, that number is 160.
7 High-Profile Departures That Defined the Great CEO Exodus of 2019
It’s been a record year for founders and executives leaving the companies they’ve built–including three significant departures on the same day.
It’s being called the Great CEO Exodus of 2019.
Through August, U.S. companies saw 1,009 CEO departures, a record figure for a year’s first eight months, according to the executive coaching firm Challenger, Grey, and Christmas. In August alone, 159 U.S. chief executives departed their positions, the most ever in a month, Then, in a single day in September, the CEOs of WeWork, Juul, and eBay all departed, making headlines–and causing considerable head-scratching.
The large number of departures could be due to greater pressure from boards: One study suggests that 59 percent of them appear to be the result of executives being forced out, regardless of the official explanation. Exechange, a service that tracks executive departures, has found that over the 12 months ending September 30, more executives seem to have been pushed out than average. “More than one in two CEOs stepped down under high pressure,” Daniel Schauber, founder of Exechange, wrote in the company’s recent report.
These are the most fascinating and remarkable executive exits of this year.
7. Under Armour’s Kevin Plank
Plank has been chief executive of Under Armour since 1996,when he was a college student who started the athletic apparel brand from his grandmother’s basement in Washington, D.C. But Plank, 47, a highly visible CEO whose name became tied to his company’s identity, had become embroiled in controversy for his support of President Donald Trump, and for accompanying athletes and other executives on company-funded trips to strip clubs. Amid slumping North American sales, Under Armour announced on October 22 that Plank would be replaced by current chief operating officer Patrik Frisk. As of January 1, 2020, Frisk will be the company’s chief executive, and Plank will become executive chairman and brand chief, Under Armour said.
6. CrossFit’s Jeff Cain
It’s been two years since Jeff Cain took the CrossFit reins from founder Greg Glassman. On September 1, after implementing many changes and trimming the organization over the previous 18 months, he departed. The fitness company had been noticeably silent on the matter, leaving sports blogs and Reddit communities to ponder what happened. A company spokesperson confirmed the executive departure to Inc. in October, and said Cain hasn’t been replaced as CEO. Instead, Glassman has decided to “implement a flatter organizational structure whereby he, his department heads, and other core employees meet regularly to discuss tactics and strategy.”
5. REI’s Jerry Stritzke
The member-run co-op has an unusual organizational structure, and issued an unusual announcement this year from the desk of president and CEO Jerry Stritzke. In February, he noted that his undisclosed personal relationship with the head of another organization in the outdoor industry left “perceived conflicts of interest.” In February, Kent, Washington-based REI announced that COO Eric Artz would step in as interim chief executive the following month.
4. EBay’s Devin Wenig
EBay’s recently revamped board had been exploring strategy options, including possible sales of parts of its business, such as StubHub and eBay Classifieds. Chief executive Devin Wenig was opposed to the board’s efforts, and in September, simmering conflict reached full boil. Wenig tweeted on September 25: “In the past few weeks it became clear that I was not on the same page as my new board. Whenever that happens, it’s best for everyone to turn that page over.”
3. Juul’s Kevin Burns
Just hours before Wenig’s departure became known, the controversial nicotine vape company Juul said its chief executive Kevin Burns resigned. His departure came amid claims by health officials that vaping has reached epidemic proportions among young people, and that a mysterious lung illness had sickened more than 500 people and killed at least seven. Burns wassucceeded by K.C. Crosthwaite, a former executive of Marlboro-maker Altria Group, which last year took a $12.8 billion stake in Juul. Altria also said it was ending merger conversations with fellow tobacco giant Philip Morris.
2. Overstock’s Patrick Byrne
Overstock has been a public company since 2002, though one run by its founder and lightning-rod-in-chief Patrick Byrne–known for his bizarre cryptocurrency bets, niche politics, and a losing libel lawsuit–for two decades. In August, Byrne made strange and controversial comments and online posts about the “deep state,” and boasted he’d been an FBI informant after a romantic relationship with alleged Russian agent Maria Butina.Shortly afterward he resigned from the company.
1. WeWork’s Adam Neumann
In the most dramatic high-profile chief executive exit since that of Uber’s Travis Kalanick, and on the very same day in September on which the executives of Juul and eBay announced their departures, Adam Neumann said he’d step down from the company he’d founded a decade earlier. In the lackluster lead-up to the We Company’s initial public offering, Neumann’s grip on the company had already been weakened; the company filed an amended S-1 that showed his voting shares had been diminished by half.
Groupon’s CEO and COO just stepped down, joining a slew of executive departures in 2020, including Bill Gates, who is leaving the boards of Microsoft and Berkshire Hathaway
Groupon’s CEO, Rich Williams, and COO, Steve Krenzer, are stepping down from those roles while remaining with the company. North America President Aaron Cooper was named interim CEO while the company searches for a permanent hire.
Howard Willard, the CEO of Altria Group, one of the world’s largest producers of tobacco products, tested positive for the coronavirus and was taking a temporary medical leave of absence as of March 20.
Microsoft co-founder Bill Gates announced his decision to step down from the boards of Microsoft and Berkshire Hathaway in a LinkedIn post on March 13, to focus more on philanthropic ventures. Gates hasn’t worked full-time at Microsoft since 2008.
Mandy Ginsberg, the CEO of the company that oversees Tinder, Hinge, OKCupid, and Match, announced on January 28 that she’s stepping down after 14 years, citing personal reasons.
Disney said on January 31 that Hulu CEO Randy Freer would be departing, with no direct replacement and company leaders reporting to Disney’s Kevin Mayer. In late February, Hulu’s Chief Marketing Officer Kelly Campbell was promoted to president of Hulu.
Adam Bierman, CEO, and co-founder of the cannabis company MedMen, stepped down on February 1, after a steep decline in its share price over the last year. It also laid off 40% of its corporate workforce at the end of 2019.
erry Booth, the CEO of Aurora Cannabis, announced he was stepping down and retiring on February 6. Several struggling Canadian cannabis companies have shifted leadership roles lately — this is just the latest.
Tidjane Thiam, CEO of Credit Suisse, resigned on February 6 after the company got caught stalking a former employee through a private investigator.
Les Wexner, CEO of L Brands, a retail company that includes Victoria’s Secret and Bath & Body Works, stepped down on February 20 after almost 60 years. He was the longest-tenured CEO of any Fortune 500 company at the time.
Tyler Haney, founder and CEO of the clothing brand Outdoor Voices, stepped down on February 21, following a tough year. The clothing brand reportedly lost around $2 million a month in 2019. Haney left the company altogether several days later.
Fastly CEO Artur Bergman said on February 22 he would leave the position, less than a year after the internet infrastructure company went public. He said it was because he’s a stronger developer than he is a company leader.
Keith Block, co-CEO of Salesforce, left the position on February 25, which surprised industry watchers, who thought Block might eventually take over from founder Marc Benioff as sole CEO.
Bob Iger, CEO of Disney, stepped down on February 25. He had held the role since 2005 and renewed his contract in 2017.
Harley-Davidson CEO Matt Levatich resigned on February 28 following years of decreasing demand for motorcycles.
Ginni Rometty, CEO of IBM, is departing in April after eight years of leading the company through a difficult transition period.
Although it was announced in 2019, T-Mobile’s CEO John Legere is scheduled to step down in May 2020. During his 7-year run, T-Mobile’s share price increased from $12 to nearly $80.
LinkedIn CEO Jeff Weiner is stepping down in June after 11 years of running the company.
Mastercard CEO Ajay Banga is set to step down in early 2021 after more than a decade running the company.
Why Did Hundreds Of CEOs Resign Just Before The World Started Going Absolutely Crazy?
In the months prior to the most ferocious stock market crash in history and the eruption of the biggest public health crisis of our generation, we witnessed the biggest exodus of corporate CEOs that we have ever seen. And as you will see below, corporate insiders also sold off billions of dollars worth of shares in their own companies just before the stock market imploded. In life, timing can be everything, and sometimes people simply get lucky. But it does seem odd that so many among the corporate elite would be so exceedingly “lucky” all at the same time. In this article I am not claiming to know the motivations of any of these individuals, but I am pointing out certain patterns that I believe are worth investigating.
One financial publication is using the phrase “the great CEO exodus” to describe the phenomenon that we have been witnessing. It all started last year when chief executives started resigning in numbers unlike anything that we have ever seen before. The following was published by NBC News last November…
Chief executives are leaving in record numbers this year, with more than 1,332 stepping aside in the period from January through the end of October, according to new data released on Wednesday. While it’s not unusual to see CEOs fleeing in the middle of a recession, it is noteworthy to see such a rash of executive exits amid robust corporate earnings and record stock market highs.
Last month, 172 chief executives left their jobs, according to executive placement firm Challenger, Gray & Christmas. It’s the highest monthly number on record, and the year-to-date total outpaces even the wave of executive exits during the financial crisis.
By the end of the year, an all-time record high 1,480 CEOs had left their posts. (Fortune Magazine, right)
But to most people it seemed like the good times were still rolling at the end of 2019. Corporate profits were rising and the stock market was setting record high after record high.
Yes, there were lots of signs that the global economy was really slowing down, but most experts were not forecasting an imminent recession.
So why did so many chief executives suddenly decide that it was time to move on?
The following are just a few of the big name CEOs that chose to step down in 2019…
United Airlines — Oscar Munoz
Alphabet — Larry Page
Gap — Art Peck
McDonald’s — Steve Easterbrook
Wells Fargo — Tim Sloan
Under Armour — Kevin Plank
PG&E — Geisha Williams
Kraft Heinz — Bernardo Hees
HP — Dion Weisler
Bed, Bath & Beyond — Steven Temares
Warner Bros. — Kevin Tsujihara
Best Buy — Hubert Joly
New York Post — Jesse Angelo
Colgate-Palmolive — Ian Cook
MetLife — Steven Kandarian
eBay — Devin Wenig
Nike — Mark Parker
Of course the mass exodus of chief executives did not end there.
In fact, a whopping 219 CEOs stepped down during the month of January 2020 alone.“Bloodsucker Capitalism”: How Big Companies Extract Wealth from Everyone Else
By then, it was starting to become clear that the coronavirus that was ripping through China could potentially become a major global pandemic, and I certainly can understand why many among the corporate elite would choose to abandon ship at that moment.
Some of these CEOs have made absolutely absurd salaries for many years, and it is much easier to take the money and run than it is to stick around and steer a major corporation through the most difficult global crisis that any of us have ever experienced.
The following are just a few of the well known CEOs that have resigned so far in 2020…
Bob Iger, CEO of Disney
Ginni Rometty, CEO of IBM
Harley-Davidson CEO Matt Levatich
T-Mobile’s CEO John Legere
LinkedIn CEO Jeff Weiner
Mastercard CEO Ajay Banga
Keith Block, co-CEO of Salesforce
Tidjane Thiam, CEO of Credit Suisse
Hulu CEO Randy Freer
It is important for me to say that I do not have any special insight into the personal motivations of any of these individuals, and every situation is different.
But I do think that it is quite strange that we have seen such an unprecedented corporate exodus at such a critical moment in our history.
Meanwhile, top corporate executives were dumping billions of dollars worth of shares in their own companies just before the market completely cratered. The following comes from the Wall Street Journal…
Top executives at U.S.-traded companies sold a total of roughly $9.2 billion in shares of their own companies between the start of February and the end of last week, a Wall Street Journal analysis shows.
The selling saved the executives—including many in the financial industry—potential losses totaling $1.9 billion, according to the analysis, as the S&P 500 stock index plunged about 30% from its peak on Feb. 19 through the close of trading March 20.
In the stock market, you only make money if you get out in time, and many among the corporate elite seem to have impeccable timing.
Perhaps they just got really lucky. Or perhaps they were reading my articles and understood that COVID-19 was going to cause the global economy to shut down. In any event, things worked out really well for those that were able to dump their stocks before it was too late.
And it turns out that several members of Congress were also selling stocks just before the market went nuts…
Sen. Dianne Feinstein of California and three of her Senate colleagues reported selling off stocks worth millions of dollars in the days before the coronavirus outbreak crashed the market, according to reports.
The data is listed on a U.S. Senate website containing financial disclosures from Senate members.
Of course most ordinary Americans were not so “lucky”, and the financial losses for the country as a whole have been absolutely staggering.
The good news is that there was a tremendous rally on Wall Street on Tuesday, and that will provide some temporary relief for investors.
But the number of confirmed coronavirus cases continues to escalate at an exponential rate all over the globe, and this crisis appears to be a long way from over.
The great CEO exodus of 2020
Questions
- They were obviously smart enough to see this coming. But is what they are doing diabolical? How or why would they benefit from this?
- Illegal? Dumping stocks, getting out before pay cuts. Is it legal?
- Immoral? They knew, why didn’t they start helping with materials and resources experts would know we needed?
- Is it temporary? Will they return to their positions once the storm passes?
- Conspiracies: All of these people that left could now without suspicion sell off their stock. In turn making them millions if not billions of dollars. Then in a few month’s to a year they buy it all back for a third of what they paid for it. This has been going on for decades.
- This was a planned epidemic that needed a face to it for the masses to follow it blindly like the blind sheep the majority is.
- This was planned for decades in advance with many short “scares” coming like Ebola and the countless other “epidemics” to prepare the human mind for the grand finale “CoronaVirus” omg!
- This is the forced introduction into a new era. The Online World
- This is all to make room for the largest influx of automation coming.
- Malls will turn into warehouses and shipping facilities. Big department stores as well.
Why Is NOBODY Talking About the Mass Resignations of Major CEOs?
Something is not right here
To date by July 2020, well over 1300 CEOs from massive corporations throughout the world had stepped down from their positions in the preceding twelve months.
Various motivations were cited for the departures. These ranged from personal reasons to a lesser demand for services, and even a positive COVID-19 diagnosis.
The year 2019 marked the largest record in history of multiple CEO’s stepping down from their positions within the same time frame.
The last time the numbers were even close had been as far back as 2002, when executive outplacement firm Challenger, Gray and Christmas first began culminating the data.
And by the start of 2020, it showed no signs of slowing down.
In the month of January alone, over two hundred Chief Executives had vacated their comfortable positions, logged out and cashed in.
Looking at some of the names on the list, we’re not just talking about a few local businesses here either.
Nokia, Microsoft, Lockheed Martin, L Brands, LinkedIn, Salesforce, Match, Hulu, Tinder, Credit Suisse, Groupon, Disney, Harley Davidson, Mastercard, Nike, eBay, IBM… you get the picture.
The list goes on and on.
But why?
It’s not uncommon to see top level execs step down during a recession, but the floodgates opened way back in 2019. During this time, many of these companies saw insane stock market highs.
The economy was booming and we were blissfully unaware of corona as anything other than a tasty beer.
This kind of mass exodus didn’t even happen during the 2008 financial crisis and subsequent recession.
It makes little sense.
For the majority of these high powered executives, they left before the full outbreak of the coronavirus across the USA in March of this year.
I mention the USA specifically because the majority of these companies are originally registered or based there.
Various hypotheses have been cited for the widespread resignations, some that could have legs and some that are reaching to say the least.
I’ve kept to the theories that make the most logical sense as opposed to anything conspiracy related whilst looking into this.
One of the first and most obvious is that these executives were tipped off by friends in ‘Big Chinese Business’ that a virus was about to hit US soil, and hard.
The outbreak of COVID-19 in China was reported as far back as November 2019 and by January, the country was already on lockdown and the economy tanking.
It’s not beyond the realms of possibility that given the power and influence some of these companies have, that their pals in Chinese business were readily warning the big players to get out while the gettin’s good.
This idea holds a lot of weight in my opinion because again, many of these people got out just before the virus hit the economy hard.
Their company stock options were probably cashed out for a pretty penny, whereas if they had waited much longer who knows what financial mess they’d be left to deal with.
Leaving before the full impact of the virus possibly included a nice golden handshake as well, which is common in positions of this kind of elevated status.
From here, the next theories get dark quite quickly and all circle around corruption.
Recently in the press, the massive fast-fashion company BooHoo has been subject to allegations of slavery within their working practices.
The company chief executives are pleading ignorance to the allegations at this point and are investigating privately, but as we know there is generally no smoke without fire.
An undercover Sunday Times reporter was offered a job for BooHoo for just £3.50 per hour in cramped, squalid conditions at one of their factories in Leicester, UK just last month whilst looking into the story.
No social distancing was being observed, and now these factories are purported to be the cause of Leicester having the second largest number of coronavirus cases in the UK at present.
Although BooHoo’s CEOs have not stepped down, I use the story as exhibit A to demonstrate the likely levels of corruption that go on in big business.
So coming nicely back to our list above, Credit Suisse’s CEO Tidjane Thiam resigned on February 6th 2020 after the company was caught using a private investigator to stalk a former staff member.
When a star banker decided to defect to a rival corporation, the company took it upon themselves to stalk previous employee Iqbal Khan, eventually leading to the death of the actual private investigator and a whole heap of negative press.
I honestly couldn’t make this stuff up.
Now up until this point, it’s mainly corporate spying and unsafe labour practices in the mix. But the most alarming rumours (and I must call them that at this point,) are worrisome to say the least.
On 21st December 2017, sitting President Donald Trump signed an Executive Order which authorised the immediate seizure of assets belonging to people and organisations involved in any form of human rights abuse, human trafficking or corruption.
With that in mind, are many of these CEOs leaving before their company is caught up in a human rights scandal?
CEO of L Brands Les Wexner (who owns such retail outlets as Victoria’s Secret) stepped down in February after almost sixty years at the helm. He is the longest standing CEO of any Fortune 500 company.
Is this any coincidence when his vast connections to Jeffrey Epstein have been outed in recent months?
Given the arrest of Ghislaine Maxwell who is apparently ‘ready to name names’ of her and Jeffrey’s co-conspirators in sex trafficking over the years, the rabbit hole could go much deeper than we’ll ever know.
Are the heads of the snakes cutting and running before it’s too late?
At this point there is little firm evidence to prove links to mass human rights violations being performed by these companies, but it’s not something we should take lightly.
The Oxfam charity scandal of 2018, where aid workers were using prostitutes whilst deployed overseas in countries such as Haiti, demonstrates that even the best intended corporations on the surface can be hiding grisly undertones.
Time will tell if any further clues on the mass CEO exodus of 2020 are revealed, but for now I remain suspended in eager curiosity hoping for another breadcrumb to devour.
WHY IS THERE A BOOM IN CEO RESIGNATIONS?
CEO resignations reached an all-time high in 2019. Is the corporate model of management fundamentally changing? We speak to white collar criminologist Bill Black.
In 2019, a record number of 1640 CEOs resigned from major corporations. For January 2020 alone, the number was 219, indicating that CEO departures could reach an even higher number this year.
Why are so many CEOs resigning and why has the number been increasing recently? The reasons seem to vary. Some analysts talk about a management restructuring, some say it’s because of a failure to meet the company’s goals, others definitely have stepped down because of sexual harassment scandals or because of a failure to address sexual misconduct within their companies. But it cannot be necessarily a coincidence that CEOs are departing at an increasing rate. The trend calls for an analysis of what is going on, for which we have our guests Bill Black today. Bill is a white collar criminologist, former financial regulator, and associate professor of economics and law at the University of Missouri, Kansas City. He’s also the author of the book The Best Way to Rob a Bank is to Own One. Thanks for joining us again, Bill. Bill Black: Thank you. Greg Wilpert: So, Fortune Magazine says that the reason for the record number of CEO resignations is the MeToo movement because so many CEOs got entangled in scandals over sexual misconduct, either themselves, or for turning a blind eye to what was happening in their own companies. Do you agree with that analysis? Bill Black: No, but that is a contributor. It is actually one of the remarkable changes in the last several years that one of the best ways for really powerful CEOs to lose their job is to have what used to be described as a consensual sexual relationship with a subordinate. Greg Wilpert: So one of the things that’s happened is that CEO compensation skyrocketed during the second half of the 20th century and has only continued to accelerate since then. Some sociologists and economists have even argued that the economy entered a managerial revolution in the 1940s and 50s and that we are now in what could be called managerial capitalism, where managers constitute the new ruling class instead of the owners of companies [inaudible 00:02:30]. Would you agree with that? And if so, what does such a high CEO turnover mean for how the upper echelons of our society is run? Bill Black: Okay, so to do the super brief version of this, we had the rise first of the robber barons, as they were called. These were individuals that not only ran their own companies, they ran all the competitive companies, and the reason we call it antitrust is that there were trust agreements drawn up by the lawyers that facilitated this, that gave one person effective power over all the seeming competitors. So those were the bigger than life entrepreneurs who, you know, literally said money was something you should throw off the back of trains, and were notorious. Then came the first manager revolution, and that’s more the 30s and 40s and 50s, and GM is the quintessential example of that, and it was in contrast to Ford Motor Company. Ford Motor Company of course run by an entrepreneur, GM run by professional managers who had MBAs and such, which didn’t use to be a particular really good way of becoming the head of a company and such. Then they had the current revolution, which is more the 70s is when it starts taking off and it’s huge by the 80s. And I’ll give just a super brief version. The other thing that’s happening at the same time is all kinds of entities that used to be key restraints, the investment banks, the accounting firms, the credit rating agencies and such, used to be owned in true partnership form, and that meant that all the general partners were subject to what’s called joint and several liability. What that means is, you, the general partner, one of the general partners, need not have done anything wrong. If any of your general partners do anything wrong that causes losses, you personally are on the hook for all of the losses of the partnership. They can come and take your home, your art collection, all those kinds of things. You can imagine that that made people a whole lot more reluctant to make other people partners because they were on the hook for what they did and made them monitor it as well. So when they move away from partnership to corporation, whoa, this is the era of the massive stock benefits and such. This is the revolution in corporate pay. And the analytics, the way it was sold was, oh, the problem is managers aren’t taking enough risks. Their fuddy duddies. The only way to get fired is to take a big risk and lose, so they, you know, don’t do much and that’s why the United States isn’t as productive as it used to be because they pursue their own interests instead of the interest of the corporation. So we will align the interests of the CEO with the shareholders by giving them huge stock positions, and that will mean there’ll great managers and they’ll take much more risks, and of course we did this and we made the CEOs massively wealthy. We made it, you know, child’s play for them to engage in accounting fraud, to report huge short term gains, and they based their pay, not as economists said that you should on longterm performance, but on short term pay, which is of course far easier to manipulate. So that is the, you know, the revolution that has brought us the disaster. And by the way, instead of producing record gains in productivity, productivity gains have roughly been cut in half under this managerial revolution.
Greg Wilpert: Well, the point that you make about connecting CEO compensation to the stock performance is something very important and something many people have analyzed, and of course, obviously, that’s become the main trend. And what I’m wondering though is that if that’s the case, that of course would also tie the compensation and the work of the CEOs very closely, not just to the stock price, but the stock price is also to some extent dependent on perceptions. So, in other words, I’m wondering if maybe the trend, you know, the MeToo movement and sexual harassment, the general perception of a company’s performance and its ethics, is ending up having an impact on the CEO’s ability to act, essentially, and if that’s one of the things, in other words, perception becoming more important than perhaps actual productivity and performance. Bill Black: I don’t think that aspect of it, but perhaps something a little bit analogous that makes your point or draws on your point about perceptions. So all of this has meant that investors are super, super short term oriented, and that means corporations do all kinds of things that are stupid for the economy, stupid for productivity in the longer run, but which will boost share prices this quarter. So in addition to all the usual, you know, frauds that I talk about using accounting, they simply now, and if anyone wants to read, read professor [inaudible 00:08:24] on this, they do unbelievably huge stock buybacks. So instead of building productive things with their retained earnings, they buy back stock using the corporation’s money, which has the effect of raising stock prices. So I think what’s really changing right about now is that all of these folks have, you know, had the greatest opportunity to big pigs at the trough in modern history, and that was the Trump tax cut. So again, what really wealthy people put their money in is not so much yachts, because you can only buy so many yachts, is the stock market. All right? And so when you give enormous trillion dollar cuts in taxes of the wealthy people, what are they going to do with all that additional income? Well, you know, after tax income, they’re going to buy more stock, and you’re going to get this huge run up in stocks. That can only work for so long and we’re overdue for recessions, and we don’t know exactly what’s going to cause it, but, you know, most people think recessions are coming relatively soon. Obviously the coronavirus is pushing a number of countries over that margin into near-term recessions. So I think that first, all these people got incredibly filthy rich. They don’t need money, and they certainly don’t need their current job.
Greg Wilpert: That’s an interesting point, but that brings me to my next and last question, which is that, you know, you have this basic trend of something that we’ve of course talked about everywhere, and progressives in general and Bernie Sanders certainly has pointed it out, is extreme growth in income inequality and in the fact that CEOs are doing so well. Of course, they have the luxury of being able to resign from a job that they’re feeling is getting too stressful. I’m wondering though about what that also says about, you know, the other tier and the relationship between the two, that is, the workers don’t have that luxury. If anything, especially if they are contingent workers or if they’re part time workers or if they’re working on a contract or something like that, there’s a huge division clearly, and I’m wondering if these resignations could be a sign of that, the continuation, basically, of these two worlds, of between management and basically the lower two thirds of society. What do you think? Bill Black: Oh, absolutely. What you have to do, and Jack Welsh has just died at GE, and his nickname that he was proud of was Neutron Jack after the neutron bomb that kills people, but leaves the building standing. So he was infamous for firing people. He was infamous for ranking yank, which is, we will say that we’re firing you because you were a poor performer. So not only will you lose your job, you’ll be stigmatized for life. But who was really being fired? The people who weren’t to play the accounting scams, right? So the best people were being fired and being labeled as the worst people, and the stock price was surging under all of this. I would like to say, you know, that CEOs are resigning because they don’t want to do that. I frankly don’t think many CEOs resigned because they’re unwilling to do this. I’m going to describe documents which you can get online. These are the plutonomy memos by Citi to their wealthiest clients, and they call this a managerial aristocracy. That’s their phrase. They say it creates a plutonomy. In other words, an economy in which virtually all the wealth is held by a tiny group of folks and where the workers get a smaller and smaller pie, and they say, since the elections are coming, the key thing, problem, the key risk we have is workers still get to vote and they may eventually go to the polls and stop this. So they described that as a risk to the continuation of this managerial aristocracy and this ability to take virtually all of the, again, reduced gains because they’re doing stupid things in the way they run the companies that greatly reduced productivity. So it’s a smaller pie. Remember, the justification was a trickle down? Well, you get a big pie, and even if you don’t get much of it, as long as the pie is growing, great. Well now, the growth of the pie has been dramatically reduced by these scams. And as I said, Citi openly says this is going to get even more extreme unless and until the voters rebel. Greg Wilpert: Wow. Well this is a good point to end, especially considering that in the middle of this week’s, you know, Super Tuesday and the primary season, but we’re going to leave it there for now.
Conclusion
So, as the reader can see there are many reasons why CEOs resign from large corporations. I am sure the stress of managing multi-million and multi-billion dollar corporations has to be incredibly stressful. I am also sure that with the coronavirus pandemic and closures maintaining a profitable business plan has become increasingly difficult. It is also undeniable that the America first project of President Trump has thrown a monkey wrench into a lot of corporate plans. Also his price reduction of prescription drugs has lowered the profit margin for big pharma. There is no denying that we are entering into a new era, and many CEOs are finding themselves ill equipped to deal with these changes. Until we reach a level of economic and manufacturing stability we will continue to see a major shake-up in the upper echelons of these fortune 500 corporations.
Resources
boomlive.in, “Did CEOs Of These Companies Resign Due To COVID-19 Crisis? A Fact Check;” businessinsider.com, “The 37 most dramatic CEO exits in 2019, a record-breaking year for executive departures,” By Rebecca Aydin and Allana Akhtar; globalresearch.ca, “Why Did Hundreds Of CEOs Resign Just Before The World Started Going Absolutely Crazy?” By Michael Snyder; nbcnews.com, “Why have more than 1,300 CEOs left their post in the past year?” By Claire Atkinson; omny.fm, “Suspicious Timing: The great CEO exodus of 2020,” inc.com, ” 7 High-Profile Departures That Defined the Great CEO Exodus of 2019: It’s been a record year for founders and executives leaving the companies they’ve built–including three significant departures on the same day,” BY CHRISTINE LAGORIO-CHAFKIN; medium.datadrieninvestor.com, “Why Is NOBODY Talking About the Mass Resignations of Major CEOs? Something is not right here;” buinessinsider.com, “Groupon’s CEO and COO just stepped down, joining a slew of executive departures in 2020, including Bill Gates, who is leaving the boards of Microsoft and Berkshire Hathaway,” By Joey Hadden , Debanjali Bose , and Laura Casado; therealnews.com, “WHY IS THERE A BOOM IN CEO RESIGNATIONS?” By Gregory Wilpert;
Addendum
A post shared thousands of times on Facebook lists companies whose chief executive officers have allegedly stepped down during the novel coronavirus crisis. This is misleading; some of the 19 CEOs remain in their positions, while the announcements that others were leaving came before the virus emerged in late 2019. “While you’re being distracted by the COVID-19 news,” the post says before listing the companies whose CEOs it claims have departed and asking: “What’s really going on?”
Postings for Big Tech, Social Media and Corporations
https://common-sense-in-america.com/2020/09/19/what-is-woke/
https://common-sense-in-america.com/2020/08/06/much-to-do-about-tiktok/
https://common-sense-in-america.com/2020/08/05/did-the-mob-leave-las-vegas/
https://common-sense-in-america.com/2020/08/01/why-are-tech-companies-biased/
https://common-sense-in-america.com/2020/06/17/corporate-donations-to-the-blm-and-attempt-to-placate-the-left/
https://common-sense-in-america.com/2020/11/10/how-did-the-communications-decency-act-affect-social-media/
https://common-sense-in-america.com/2020/06/09/electric-cars-are-they-worth-the-hype/
https://common-sense-in-america.com/2020/06/12/5g-networking-who-will-win-the-race/
https://common-sense-in-america.com/2020/06/24/news-bias-what-is-the-media-afraid-of/
https://common-sense-in-america.com/2020/10/27/machine-learning-fairness/
https://common-sense-in-america.com/2020/07/12/is-social-distancing-destroying-our-moral-fiber-and-culture/
https://common-sense-in-america.com/2020/07/27/when-and-why-did-the-media-become-biased-is-it-a-tool-of-the-left/
https://common-sense-in-america.com/2020/12/15/how-did-so-many-of-the-25-richest-people-in-the-world-increase-their-wealth-in-2020/
https://common-sense-in-america.com/2021/02/05/what-happened-to-fox-news/
https://common-sense-in-america.com/2021/02/22/why-our-hundreds-of-ceos-resigning/