More CEOs Could Be Headed for the Exit -- Corporate Outlook

   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 [e-mail]

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