The Most Notable CEO Exits of 2013
It’s been a year of CEO walkouts…and push-outs. Whether they retired, stepped down or were ousted, more exited their companies in the past 11 months compared with the same period last year.
There were 1,147 CEO changes so far this year, 3.2% more than the 1,111 departures announced in the first 11 months of 2012, according to outplacement consultancy Challenger, Gray & Christmas.
Some of these executive exits were expected, while others took investors by surprise – Men’s Wearhouse chairman George Zimmer and Groupon CEO Andrew Mason, most notably. Here we highlight some of the most headline-grabbing chief executive and chairman moves of the year (ordered by date of announcement).
1. Louis D'Ambrosio — Sears Holdings (SHLD)
Sears announced in January that D'Ambrosio, CEO since February 2011, would step down because of “health issues” involving his family. He was replaced by company chairman and main shareholder, Edward Lampert on Feb. 1.
Weighed down by operating losses and falling sales, Sears said last week it would spin off its Lands' End clothing business, adding to assets the company is shedding to bolster its balance sheet. Last year Sears split off its smaller-format Hometown and Outlet stores to raise $446 million.
Total compensation 2012: $1.29 million
2. Andrew Mason — Groupon (GRPN)
Mason, founder of the online deals company, was fired in February amid increasing concerns around the stock performance and long-term viability of the business. Shortly after the news broke he published a goodbye note to his employees, saying they "deserve the outside world to give you a second chance. I'm getting in the way of that. A fresh CEO earns you that chance." Groupon named co-founder Eric Lefkofsky permanent CEO last month. The Chicago company reported a 7% increase in revenue for the second quarter.
Mason left with a headline-worthy severance package: $378.36. According to regulatory filings, Mason was due six months’ salary plus health care coverage if he left the company (or was fired). Mason's base annual salary was just $756.72 in 2012, but he holds about 46.6 million shares in Groupon, worth approximately $292 million. The former CEO, often described as “quirky,” has been exploring new career options; this summer he released a seven-song album called “Hardly Workin’.”
Total compensation 2012: $5,291, base salary $757 [2011 compensation: $7,943]
3. Joe Kennedy — Pandora Media (P)
In March the Internet radio company said Kennedy, who led the company as chairman and CEO since 2004, would step down at the same time as announcing stronger-than-expected quarterly sales. The company went public in 2011, and Kennedy helped grow Pandora to a platform that has more than 67 million monthly active listeners, despite increasing competition from online music services such as Spotify and iTunes radio. On Sept. 11 Pandora named former head of digital advertising company aQuantive, Brian McAndrews, as its new CEO.
Total compensation 2012: $732,425
4. John Riccitiello — Electronic Arts (EA)
The videogame publisher announced on March 18 that CEO Riccitiello, who had been in the position since 2007, would step down. In a note to employees he said: "My decision to leave EA is really all about my accountability for the shortcomings in our financial results this year." EA bungled the launch of its SimCity game earlier this year but reported an increase in second-quarter profit and raised its full-year earnings forecast.
Total compensation 2013: $15.84 million
5. Ron Johnson — JC Penney (JCP)
Appointed CEO in November 2011, JC Penney’s board fired Johnson in April and brought in his predecessor, Myron E. Ullman III, on an interim basis. Johnson, who came from Apple and pioneered the concept of Apple Retail Stores and the Genius Bar, was brought in with the hope of turning around the ailing retailer. But several initiatives launched during Johnson’s tenure proved to be flops, including eliminating discount sales without testing the concept.
Penney reported a loss of $489 million for the third quarter, while the stock is down about 60% year-to-date.
Total compensation 2012: $1.88 million
6. Bob McDonald — Procter & Gamble (PG)
McDonald, appointed CEO in 2009 and at P&G for 33 years, was replaced in May by his predecessor, A.G. Lafley, who helmed the consumer products company from 2000 to 2009. P&G was under pressure from activist hedge fund manager Bill Ackman, who held a 1% stake in P&G and agitated for change. The maker of household brands including Tide, Charmin and Old Spice has been in a turnaround phase since early 2012.
Total compensation 2011-12: $15.19 million
7. Tom Ward, Ray Irani, Aubrey McClendon — Energy companies
The energy space saw quite a bit of turmoil this year as three big companies pushed their executives out the door. Tom Ward, founder, chairman and CEO of SandRidge Energy (SD), was fired from the gas and exploration firm in June after activist investors accused him of strategic mistakes and self-dealing at the expense of shareholders. Ray Irani had been facing heavy criticism over his compensation before investors overwhelmingly voted to remove him in May as executive chairman of Occidental (OXY), where he was CEO from 1990 to 2011. And finally, in January, Chesapeake (CHK) CEO Aubrey McClendon said he would retire; “philosophical differences with the company's new board of directors” were cited. McClendon was stripped of his chairmanship last year after claims he was using his personal stakes in company wells to get huge loans, and other conflicts of interest.
Ward’s total compensation 2012: $20.7 million
Irani’s total compensation 2012: $45.6 million
McClendon’s total compensation 2012: $16.9 million
8. Christine Day — Lululemon Athletica (LULU)
The Canadian yoga apparel maker announced on June 10 that Day, who had been CEO since 2008, would step down. The move came three months after Lululemon had to pull some of its popular Luon yoga pants off the shelves for being too sheer, driving down shares in the process.
"It was a personal decision of mine," Day said in a call with investors. "It's never a perfect time to leave a company that you love." The pants recall was still hanging over the retailer last quarter; the company last week lowered its guidance for full-year sales and profits, saying tougher quality controls have spawned delivery delays.
On Dec. 10 Lululemon announced that Laurent Potdevin, most recently president of Toms Shoes, will succeed Day as CEO in January, and that founder Chip Wilson will step down as chairman. Wilson had recently come under fire for implying, in an interview with Bloomberg TV, that Lulu’s stretchy pants may not work well for plus-size people.
Total compensation 2012: $4.28 million
9. Micky Arison — Carnival Corporation (CCL)
The Miami-based cruise line operator announced June 25 that Micky Arison, son of co-founder Ted Arison, would step down after 34 years as CEO. Arnold W. Donald replaced Arison as CEO while he remains chairman of the board.
Carnival was hit with a string of negative publicity mishaps in the past couple of years, most notably when, in 2012, the Costa Concordia capsized off the Italian coast, killing 32 people. Then in February, Carnival's ship Triumph suffered an engine room fire. The accident left 4,200 people adrift in the Gulf of Mexico without power or working toilets for five days. Bookings have tumbled since, forcing the company to sharply discount prices. Arison has also been managing general partner of the Miami Heat NBA team for 17 years.
Total compensation 2012: $6.49 million
10. George Zimmer — Men’s Wearhouse (MW)
On June 19 Men's Wearhouse said it fired founder, executive chairman and face of the company, George Zimmer. The retailer, one of North America’s largest men’s clothing sellers, later said the move came after Zimmer pushed to take the company private “and effectively demanded to be reinstated as the sole decision maker at the clothing chain,” according to a Reuters story.
In an interview with Fortune magazine in December, Zimmer said a few board directors came to him the day before a board meeting to tell him what was going on: “I wasn't being summarily discharged, but instead they offered me a figurehead position, with fair compensation. But I elected not to work for people who I had originally hired to work at the company, who now just wanted me in that sort of role.”
Zimmer was well-known for his “You’re going to like the way you look” tagline in Men’s Wearhouse commercials. And judging by the company’s second-quarter results, customers have missed him. In September the retailer reported earnings fell 28% and cut its full-year profit forecast. More recently, the suit seller made a $1.5 billion bid for rival Jos. A. Bank Clothiers — less than two weeks after Jos. A. Bank dropped its bid for Men's Wearhouse.
Total compensation 2012: $1.98 million
11. Mark Pincus — Zynga (ZNGA)
Founder and CEO Mark Pincus stepped down from the maker of online games “Farmville” and “Words With Friends” in July, and in an attempt to revive the ailing company, handed the reins over to Don Mattrick, who had headed up Microsoft's Xbox division. Pincus remains Zynga’s chairman and chief product officer. Last month Mattrick shook up the management ranks further, announcing the departures of three executives.
Total compensation 2013: $1
2012: $300,000 base salary; no bonus [April 2013 proxy statement]
12. Steve Ballmer — Microsoft (MSFT)
Microsoft CEO Steve Ballmer announced on Aug. 23 that he will resign from the company within the next 12 months. Named CEO in 2000, Ballmer joined the software giant in 1980 and was its first business manager. Forbes estimates Ballmer’s net worth to be $15.2 billion as of March 2013.
When Ballmer took the helm in January 2000, the company was worth more than $601 billion. Today, its value is less than half that amount, at nearly $270 billion. As the Daily Ticker noted, the Redmond, Wash., company has seen its share of fumbles — including the Zune music player and the first version of its Surface tablet — but it has also been able to weather the aftermath of the tech bust better than its competitors. The speculation around who will be Microsoft’s next CEO has centered on current Ford (F) chief, Alan Mulally, and internal executive Satya Nadella, as well as Stephen Elop, former CEO of Nokia (NOK).
Total compensation 2012: $1.31 million
13. Michael T. Duke — Walmart (WMT)
On Nov. 25 Walmart said Doug McMillon, 47, head of its international business, will replace CEO Mike Duke in February. McMillon has spent his whole career at the world’s largest retailer and was considered a likely candidate to succeed Duke. McMillon headed Walmart International, the company's second-largest operating unit, since 2009, and was CEO of Sam’s Club, the company's retail warehouse chain, before that. Duke will continue as chairman of the executive committee of the board and stay on as an adviser to McMillon for a year.
As our own Jeff Macke pointed out when the move was announced, "McMillon’s appointment suggests the retailer is increasingly looking abroad to fuel growth."
Total compensation 2013: $20.69 million
