The boards of directors at some high-profile companies are doing a little house cleaning in the corner office ahead of 2020.
In almost all the recent cases, the CEOs getting the boot have been inundated by questions on their ability to lead and think strategically. Outside of the more well-known companies with new CEOs, clearly Corporate America is waking up to the view they will need a different type of leader to navigate through U.S. political turmoil and a tough trade war with China.
But first, here are those buzzy more company-specific CEO departures.
On Wednesday morning, it was announced that Juul CEO Kevin Burns would be sent packing amid growing concerns over the company’s marketing practices and rising pressure from regulators on the health of e-cigarettes. Burns will be replaced by veteran Altria executive K.C. Crosthwaite.
Altria (MO) owns about 35% of Juul.
Moments after the Juul news crossed the newswires, EBay (EBAY) said long-time CEO Devin Wenig would be shown the door. EBay’s Chief Financial Officer Scott Schenkel is taking over on an interim basis.
EBay has struggled for years under Wenig’s leadership, experiencing pressured profit margins and stagnating sales at its core marketplace business. Just this past summer, EBay was pressured by activist investors Elliott Management and Starboard to split itself up. Wenig had long been resistant to splitting the company up. The board ultimately agreed to add three new members to its board.
Judging by Wenig’s tweet Wednesday morning, he lost support among that refreshed board.
In the past few weeks it became clear that I was not on the same page as my new Board. Whenever that happens, its best for everyone to turn that page over. It has been an incredible privilege to lead one of the worlds great businesses for the past 8 years.
— Devin Wenig (@devinwenig) September 25, 2019
Somewhat forgotten in this chaotic week of abrupt CEO departures is the shakeup at WeWork. On Tuesday, fresh off a badly mangled IPO process this month WeWork said its founder and CEO Adam Neumann would step down. Neumann will move to a non-executive chairman role and has reportedly given up his ability to control the board.
The controversial Neumann will be replaced by veteran WeWork execs (and more polished execs) Artie Minson and Sebastian Gunningham.
Gone but not forgotten: enigmatic Canopy Growth (CGC) founder and CEO Bruce Linton was shoved out this past summer by the influential Constellation Brands (STZ) — which has sway after its major investment in the cannabis producer. Constellation Brands grew tired with the subpar operating performance of Canopy, and went on the attack to oust Linton.
A leadership recession
“We seem to be having a leadership recession, be it political or corporate,” said Waddell & Associates chief investment officer David Waddell on Yahoo Finance’s ‘The First Trade.’ Waddell thinks with rising uncertainty on the trade and political fronts, companies could be on the prowl for a different type of CEO.
Waddell added, “Also there is no way to hide everything you have done in your past, so everyone is sort of vulnerable to getting the boot based upon whatever they did a long time ago or just yesterday.”
Those assessments by Waddell look to be on the mark.
In August, there were 159 CEO changes, the highest monthly total on record, according to the latest data from Challenger, Gray & Christmas. The month marked the seventh time this year that CEO changes were higher compared to a year earlier.
So far this year, 1,009 CEOs have been kicked out for whatever reason, up 15% year-over-year.
“With growing uncertainty surrounding global business and market strength, the fact that so many companies are choosing this moment to find new leadership is no coincidence,” said Andrew Challenger, vice president of Challenger, Gray & Christmas.
Don’t feel too sorry for the CEO crowd though. They have made bank for years and likely have a nice financial cushion to fall back on.