Three’s a Trend: CEOs of Major Brands Exit
In the past two days, the CEOs of three major brands have abandoned their perches — all amid some kind of strife. Announcing major company news such as executive exits requires tact. It’s instructional to examine the three latest specimens.
Drafting statements about big executive moves raises tough questions. Some firms do it with more aplomb and transparency than others. Should you reveal the real reason for the split rather than invoking the clichéd sudden desire to spend more time with family? Should you address the crisis that led to the leadership switch? Should you praise the departing person or just kick her out?
Yesterday, vaping giant Juul said Kevin Burns resigned as CEO amid a torrent of negative publicity about alleged marketing to kids and the overall safety of e-cigarettes, including 10 deaths (though the government hasn’t named the products involved). Juul faces a real threat to its survival, whether from reduced sales or the impending regulatory tsunami (and a criminal probe). In its announcement, it said it was pulling all U.S. marketing for its products (pictured).
The press release didn’t address the safety question but did confront the underage issue, though not directly concerning Burns. It provided a quote from Burns’s two company co-founders, who applauded him. “Kevin transformed our start-up into a global business,” they said.
K.C. is a proven industry leader who understands the importance of responsible business practices. This decision by Juul recognizes that this is a critical time for the company.
–Howard Willard, CEO of Altria
Burns will be replaced by K.C. Crosthwaite, an executive at combustible-cigarette giant Altria, which owns 35 percent of Juul. In a statement, Altria CEO Howard Willard said, “K.C. is a proven industry leader who understands the importance of responsible business practices. This decision by Juul recognizes that this is a critical time for the company.”
Also yesterday, eBay said CEO Devin Wenig was stepping down. Under pressure from investors, the online auctioneer has reportedly been weighing selling off some of its businesses. The company didn’t cite this as a reason for the CEO switch — nor did it give any other one.
The only part of the announcement that hinted at a rationale (and provided any praise of Wenig) was a quote from the board chairman. “Devin has been a tireless advocate for driving improvement in the business,” Thomas Tierney said, but “both Devin and the board believe that a new CEO is best for the company at this time.”
Wenig tweeted out his own response to the news. “In the past few weeks it became clear that I was not on the same page as my new board,” he wrote.
On Wednesday, the CEO-out-the-door news came from WeWork, which has mostly been talked about lately due to its fizzled initial public offering. The shared-office brand said co-founder Adam Neumann was leaving as CEO of its parent company (he will remain non-executive chairman of the board).
“While our business has never been stronger, in recent weeks, the scrutiny directed toward me has become a significant distraction, and I have decided that it is in the best interest of the company to step down as chief executive,” Neumann is quoted in the statement.
That’s the only hint of a reason; the press release mostly lauds how great WeWork’s position is and Neumann’s role in getting there. It doesn’t directly address that Neumann has been a colorful but controversial leader and there have been rumors of drug use. More substantively, questions have been raised about the company’s business model (it lost $2 billion last year). It filed for an IPO last month, but has now postponed it.
Judging by these three examples, in announcing CEO departures, companies tend to praise the ex at least a little bit, but shy away from discussing in any detail the reason for the split.
Photo Credit: Juul
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