Departures of CEOs Are Often Bumpier Than Planned
17 Oktober 2016 - 10:40PM
Dow Jones News
By James R. Hagerty
Chief executives hope to glide into retirement as revered
leaders after a choreographed transition that surprises no one.
It doesn't always work out that way, as Monday's
earlier-than-expected exit of Caterpillar Inc. Chief Executive Doug
Oberhelman showed.
Just last week, Hershey Co.'s chief executive, J.P. Bilbrey,
said he planned to step down after months of failed efforts to sell
the candy maker to Mondelez International Inc. That made him the
third person to step down as Hershey's top executive in the past 10
years. Two people close to the company's controlling shareholder,
the Hershey Trust Co., said the efforts to negotiate a deal may
have stirred discord with board members who opposed a sale.
CEOs can quickly become embattled by a company's woes. John
Stumpf last week stepped down as chairman and CEO of Wells Fargo
& Co. following the scandal over the bank's sales policies.
Mr. Stumpf departed Oct.12 with immediate effect and won't
receive a severance package. He underwent a series of bruising
hearings with lawmakers. Wells Fargo is also splitting the chairman
and CEO roles.
Directors of Lands' End Inc. last month forced Federica
Marchionni out as chief executive after only 19 months. Losses
continued to pile up despite her efforts to introduce racier styles
at the maker of casual clothing, and the board was worried she was
trying to make too many changes too quickly, according to people
familiar with the situation.
Former DuPont CEO and Chairwoman Ellen Kullman abruptly resigned
in October 2015 from the company she had led since 2009. Her
departure, just months after she prevailed in a bitter proxy battle
against activist investment firm Trian Fund Management LP, caught
some analysts and investors off guard. After turning back Trian's
effort to secure board seats, however, DuPont twice lowered its
profit projections for 2015, the latest in a series of such moves
for DuPont in prior years.
In September 2015, Jeff Smisek, the longtime chairman, CEO and
president of United Continental Holdings Inc., was cut loose from
the company along with two other top executives. The surprise
ouster came after an internal investigation overseen by the
airline's board prompted by a federal corruption probe of the Port
Authority of New York and New Jersey. United has a major hub in
Newark, N.J., one of the airports managed by the Port
Authority.
Mark Hurd was expected to bring stability to Hewlett-Packard Co.
when he became chief executive in April 2005 after the board pushed
out Carly Fiorina. Then he suddenly resigned in August 2010. HP
said he had submitted inaccurate expense reports to conceal a
"close personal relationship" with a woman who provided marketing
services.
In 1998, Sunbeam Corp. CEO Albert J. Dunlap seemed to be riding
high. His ferocious cost-cutting earned him the nickname "Chain Saw
Al," and when he reported a surge in profits in 1997, the maker of
blenders and grills introduced a triumphant theme song, "There's a
New Sunbeam Shining." But results deteriorated rapidly in 1998,
questions about accounting arose, and outside directors forced him
out.
More rarely, executives step down just before they are due to
take over the top job. Lockheed Martin Corp. had selected Chris
Kubasik to take over from then-CEO Bob Stevens in 2013 only for the
anointed successor to resign seven weeks before the handover
following what was deemed an improper relationship with a
colleague. Lockheed Martin hastily installed company veteran
Marillyn Hewson as chief executive. Mr. Kubasik this year became
president of L-3 Communications Holdings Inc. and is widely tipped
by analysts to eventually become CEO of the defense contractor.
Write to James R. Hagerty at bob.hagerty@wsj.com
(END) Dow Jones Newswires
October 17, 2016 16:25 ET (20:25 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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