By Joann S. Lublin
Chief executives in surprising numbers were shown the exit
during 2014--and the revolving door may not stop there.
At least 14 top bosses of U.S. big businesses got pushed aside
or left under pressure--six in December alone.
In the S&P 500 index, 45 companies replaced their CEOs for
any reason during the first nine months of 2014, reports recruiters
Spencer Stuart. At that rate, the number of companies swapping
leaders in all of 2014 would exceed the 53 that did so in 2013.
(Tallies exclude interim CEOs.)
Among those that left in 2014 were CEOs of Bob Evans Farms Inc.,
Hertz Global Holdings Inc., Target Corp., United Technologies Corp.
and Symantec Corp.
The powerful forces of bolder shareholder activists and
impatient boards mean "more CEOs will get ousted in 2015," suggests
Jeffrey Cohn, a CEO succession expert.
Activists had success sweeping out several corner-office
occupants during 2014. Darden Restaurants Inc.'s Clarence Otis,
longtime chairman and CEO of the restaurant chain, said in July
that he would relinquish the top spot by year-end. The announcement
didn't appease unhappy investors. Starboard Value LP, Darden's
second biggest shareholder, led an October takeover of the entire
12-person board. Days later, the new board appointed an interim
chief and gave the chairmanship to Starboard chief Jeffrey
Smith.
Flawed leadership traits influenced the sudden departures of
some CEOs. Juniper Networks Inc.'s Shaygan Kheradpir left after
less than a year at the helm. The November move followed a review
of his leadership and how he handled a customer negotiation, but he
and the board didn't see eye to eye on those matters, the company
said.
"The swiftness of the forced exit is happening more now," says
Michael Useem, a management professor at University of
Pennsylvania's Wharton School. He expects commanders of companies
in slow-growing industries, such as energy, may find they're
especially vulnerable in 2015.
Write to Joann S. Lublin at joann.lublin@wsj.com
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