Why are CEOs Stepping Down in Recent Times
In the last 6 months to 1 year, the CEO of major companies companies like Nestle, Boeing, Paramount, Starbucks, Amazon Web Services, HSBC, Binance, Under Armour, Grayscale, Papa Jones, Discover, and a few more have stepped down voluntarily. These are CEOs that manage and control the companies with large annual revenue in the trillion of dollars.
Unless you own the company with the highest share and you make yourself CEO, then you are just a glorified employee more opportune than other employee, and at this position, you either leave voluntarily, get fired, or you remain there for as long as the company still see you valuable.
In the past, the higher you climb in a corporate establishment, the more secure, and safe your job is compared to other staffs in the company and this is because when you climb to the ladder of the CEO, only the board of directors can actually fire you because they represent the majority of the company's shareholders. The last thing that comes to the mind of the board of directors is to change CEO because it would signal to the market that the company is going through some patchy times, and it would affect stock prices which will in turn affect shareholders who indirectly have a say in the company.
For the reason stated above, CEOs aren't fired outright rather they are given generous amounts to step down from the company so the company remains safe and stock prices don't collapse. While some have been forced to resign because of their decisions that were not in favor with the company or against law, others actually leave because the company went bankrupt but in cases where the company is doing fine, it is very difficult to say if they are being fired indirectly or they decide to retire because the average CEO of the fortune 500 companies is 57 years which is a good age to retire and the often have compensation ranging from millions to even billions as the average compensation is around $16 million.
We just went through a pandemic and we are in uncertain times because a lot is happening in our world and so most companies have been trading at a sideways pattern but some companies like Starbucks pushed out their CEO because the stock price wasn't doing well although, he stepped down not like he was fired but even a blind person could see that in plain writing that he was fired by the boards.
Since Starbucks announced its new CEO, the stock price has skyrocketed 25% and the shareholders are happy and so it is looking like a lot of stagnant company are going to do the same so this could possibly be the reason for the stepping down pandemic hitting the CEO world or maybe they do not want to be seen as a bad CEO that leaves for a new CEO to come in and stock price shoots, so they decide to step down. As at 2024, over 200 CEOs have left their positions which is the highest in all record times.
What do you think is going on in the corporate world and do you think there is another reason why these CEOs are stepping down from their duties?