Though corporate profits are sky-high, so are another more dubious milestone: the number of CEOs being fired for bad behavior.
Of the 59 CEOs who departed S&P 500 firms last year, 30.5% were let go on a nonvoluntary basis, up from 22.1% in 2017, according to the Conference Board’s 2019 CEO Succession Practices report. Coins2Day was provided an early look at the report.
This 15-year high in the rate of CEO firings was spurred by #MeToo accusations which toppled several prominent corporate heads: Among the 18 nonvoluntary CEO departures, 5 oustings were related to personal conduct and #MeToo allegations. That’s especially noteworthy given that only one CEO between 2013 to 2017 was fired as a result of personal conduct unrelated to performance, according to the Conference Board. Overall, the trend is proof that the #MeToo movement has reached the boardroom.
“This is the highest percentage of CEO dismissals related to issues of personal conduct in the 20-year history of Conference Board studying CEO succession,” says Matteo Tonello, a managing director at the Conference Board.
This turnover in 2018 included the likes of Les Moonves at CBS Corporation, who was fired for cause following several sexual misconduct allegations, and Steve Wynn at Wynn Resorts, who stepped down following multiple sexual harassment allegations.
Will the trend continue? Just over the weekend, McDonalds CEO Steve Easterbrook was pushed out after violating company policy by engaging in a consensual relationship with an employee.
The biggest benefactor of CEO departures last year are internal candidates, who won 9 out of 10 of these top roles, their highest share this decade, according to the Conference Board’s report, which was done in partnership with Heidrick & Struggles.
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