CEO Turnover Hits a Record HighThe pandemic-driven upheaval across global offices goes all the way to the top, with a record number of chief executive changes at FTSE 100 firms already this year. 27 July 2020
Lina Saigol and David Ricketts of Financial News writes that companies, under increased pressure from investors, are shuffling their executive teams like never before, in the hope they can better steer them through the crisis.
Russ Mould, investment director at AJ Bell, said the FTSE 100’s figure for CEO turnover in 2020 — 18 changes already made or announced — is the highest this century, beating the previous peaks of 17 a year, seen in both 2007 and 2013. Meanwhile, the 18 changes of chief financial officer so far in 2020 is second only to 2014, when 19 finance chiefs at UK blue-chips were replaced.
SquareWell’s research, referrenced in this article, found that, while just 7% of executives were formally dismissed, almost a third (29%) were ousted from their roles because of poor performance, a scandal or strategic disagreement. The remaining 66% of executives quit.
The article highlights that analysts, headhunters and investors have highlighted several reasons for the churn, including pressure from shareholders frustrated with underperformance and the need for better governance during the crisis, while other departures have taken place as executives reach the end of their tenures.
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AQTION, a subsidiary of SquareWell Partners, published its inaugural study – ‘Stewardship in AQTION’ – which details how the world’s largest 65 asset managers and owners steward their portfolio companies and how they incorporate extra-financial considerations into their investment decision-making processes.
Carl Icahn is preparing for a second board battle at gene-sequencing company Illumina after shareholders elected his candidate, Andrew Teno, to the company’s board and ousted the chairman, John Thompson, in May. Icahn then successfully pushed out former CEO Frances DeSouza in June.