Why A Record Number of CEOs Are 'Resigning'

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#business #ceo #career

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Within the last six months the CEOs of Nestle, Boeing, Starbucks, Peleton, Paramount, Zillow, Amazon Web Services, Snowflake, Hertz, HSBC Grayscale, Under Armor, Papa Johns and Discover have all stepped down (voluntarily or otherwise) from the top job.

Collectively these men controlled companies with TRILLIONS of dollars in annual revenue and now… they are all gone.

These were just the BIG names too… CEO turnover in companies of all sizes is now higher than it has been since the start of the pandemic which begs the question, why is this happening?... and why is it happening now?...

Chief Executives and other c-suite executives are just employees like any other which means eventually they either quit, get fired or die in their jobs.

CEO layoffs HAVE spiked but maybe that’s not too surprising considering layoffs in A LOT of industries have also spiked. But this is actually NOT normally how it goes.

If you ever find yourself in the top job at a major company, you should know that your position is simultaneously far more secure and far more fickle than the average rank and file employee working under you.

As a CEO your position is unique because there is no other employee at the company with the authority to fire you, the only people that can do that are the board of directors who themselves are representatives of the shareholders.

During periods of uncertainty, the last thing that companies want to do is switch up senior leadership unexpectedly because that signals to the market that something is not right which could tank the stock price.

Since the board of directors represent the shareholders and individual directors usually ARE major shareholders themselves, they have an incentive to avoid doing anything that could hurt the stock price unnecessarily.

For this reason, CEO’s are rarely fired outright and are instead offered generous exit packages to “step down” amicably in a way that won’t scare investors in the business.

Outside of high-profile cases where the business has CLEARLY been mismanaged or in casews where the CEO has made VERY unpopular decisions, it can be hard to tell if outgoing CEO’s have been pushed out or are simply retiring.

According to Fortune Magazine itself the average age of a fortune 500 CEO is FIFTY SEVEN years old, and their average compensation package was sixteen point three MILLION dollars.

If you are THAT old and have THAT much money, it’s not unthinkable that you would want to retire or pursue less intense roles more suited to your old age… like political office…

But if CEO exits are treated so seriously and secretively, why has there been such a big spike all of a sudden?

[matthewnelson]

Immediate take when I saw the title: They're expecting a downturn in the economy and don't want to be blamed when it happens

[CHixon]

I worked for a manager who was good at shutting down unprofitable product lines. He was rewarded with managing a stable division and totally ruined it. That wasn't his area of talent.

[CantoniaCustoms]

man, being a CEO must be nice. Imagine being paid millions so you can get people laid off then proceed to sell stuff nobody wants in the first place.

[alastairhewitt]

"I've created a super toxic work environment and have tanked company performance. Time to dip with my multimillion dollar pay out. Job done."

[yukitakaoni]

Man, back then CEO sounds like company final boss. Nowadays it’s the shareholder and the banker.

[LT-dnmt]

A substantial problem in our economy is major investors think growth is linear, not logarithmic. If you already have all the customers, you can't grow anymore. Trying to push growth when no one is left to buy the product will only crash the business.

[redwolfexr]

Yeah the last big company I worked for fired the CEO for poor performance. Within 5 years he was CEO of a company 4 times larger for 10 times the salary.

He got a massive payout when he got fired too. The rest of us got layoffs and a few weeks of severance pay.

[KTSpeedruns]

They're not resigning. They're playing musical chairs.

[utoob]

Once you've stolen enough as a CEO, you want to just kick back and enjoy your super-yacht.

[carlettoburacco]

Why?
Because rats are the first to know that they must abandon ship without regrets, especially if they can write themselves a fat severance check.
There are certainly no captains going down with the ship.

[hueco]

If the C-suite of the Fortune 500 all died in a plane crash, would those companies die? Nah. They’d be fine.

[cajunguy]

CEOs job is to make sure the COO, CTO, CFO (basically the *real* professionals with marketable skill sets) do what the board wants. That's it. They're a baby sitter whose job it is to make sure the board gets put before the clients, shareholders, and employees in company decisions. That's why CEOs are always on the board of other companies.

[Bob-B-.]

So basically CEOs discovered their own gig economy: short term turnarounds.

[jmfs]

The cool thing is none of it is based on actual value creation in the industry their brand represents. Is the coffee better? The service? The location? Are there more customers? No.
As CEO NONE of that matters. All you have to do is agree with the board of directors that they are right, make it look like you've cut costs on paper, collect the checks, and then wait for another corporation to offer you a pay package. You are being paid so much that "raises" are irrelevant.

[MSThalamus-gjoi]

Chief Enthusiasm Officer... are you f'ing kidding me? This is Wonko the Sane territory.

[inquaanate]

“Its time to learn how money works” is a genius catchphrase.

[Shredderbox]

Wild to me that people still pretend that CEOs do literally anything of meaning within a company. Nothing of value was lost with these clowns who’ve quit.

[Masterdebater-qc]

Wild to be paid 113 million just to lay off employees, you know back in the day that used to be considered wage theft but here we are 🤷‍♂️

[rontheoracle]

They:
- run out of employees to fire
- run out of assets to sell
- run out of assets to collateralize for loans
- run out of cash to pump their stocks to appease shareholders
- run out of exchanges to sell more stocks

[benji]

If only the CEOs knew How Money Works… things would’ve been different