Jabil CEO Kenny Wilson, still in his first year at the helm of the $14.4 billion technology manufacturing company, has been benched due to an investigation into his conduct, the company said in a short regulatory filing.
The board asked chief financial officer Michael Dastoor to step in as interim CEO on April 19 after putting Wilson on leave April 15, according to the filing. Jabil didn’t provide information about the concern or incident that launched the probe, only saying that the behavior that prompted it is unrelated to the company’s financial statements or financial reporting. Wilson is two weeks away from completing his first year in the CEO seat after taking it May 1, 2023. Jabil, with more than 140,000 employees globally, maintains a hotline through third-party platform Resolver to anonymously report code of ethics violations or other complaints. The company is based in Tampa Bay, Fla., and manufactures electronic parts for tech companies. Its largest customers include Apple, Cisco Systems, Dell Technologies, HP, and General Electric.
It is unclear who is leading the Jabil investigation. Typically, if an investigation into a CEO’s conduct originates with financial concerns, the audit committee would initiate and lead it, said Matteo Tonello, a corporate governance expert and managing director at the Conference Board. In cases outside of financials, there are multiple approaches the board can take, he told Coins2Day. For instance, the board could form an internal committee to oversee the investigation while an outside law firm or consultant conducts it. Typically, when an investigation involves the CEO, it’s led by the board to avoid executives undertaking a review of their boss.
Investigations can involve data obtained from text-based searches of company servers; mirroring a CEO’s cell phone or other devices; conducting interviews with employees, contractors, or customers; and reviewing documents. Law firms are often tapped because they have expertise in avoiding infringing on the rights of those being investigated, said Tonello. Companies could subject themselves to liability after an investigation because of the way the probe was conducted; sometimes CEOs hire their own counsel to represent them while an investigation is underway. “That doesn’t mean if you hire a law firm, the company wouldn’t be involved,” he noted, adding that legal and compliance staff are generally looped in along with the general counsel.
The length of probes varies, Tonello said; sometimes it concludes in a few days or weeks while others take months. “It depends on the nature of the allegations and what they entail,” he said.
A spokesman for Jabil would not comment beyond what the company said in the filing, only noting that Dastoor has the support of the senior leadership team while he steps in for Wilson. “Trust, accountability, and integrity are core to our company culture, and we are committed to upholding these principles,” Timur Aydin, director of enterprise content and media, said in a statement to Coins2Day.
Wilson, 58, first joined the company in 2000 in Livingston, Scotland, as a business unit coordinator, and served successful stints leading Jabil’s businesses in Europe, Asia, and the U.S. His last role before taking the corner office in Florida was as CEO of Jabil’s Green Point organization in Asia. The company announced in November 2022 that Wilson would take the reins from former CEO Mark Mondello the following May, which culminated in an orderly transition at the manufacturer, with hardly a ripple. Mondello, who has more than three decades of tenure at the company, still serves as its chairman.
In connection with Wilson’s promotion last year, the board bumped up his pay about 43% to a base salary of about $1 million, which he’ll continue to collect while the investigation pans out. His total compensation last year was valued at $10.2 million, largely driven by a stock award valued at $6.2 million. His sons, Jordan Wilson and Adam Wilson, both hold the title of business unit coordinator, the same one their father held.
Jabil, which had net revenues of $34.7 billion in fiscal 2023, disclosed that 17% of its net revenue comes from sales to Apple. A key tenet of its strategy is to build and maintain long-term relationships with leading companies in expanding industries that need highly automated, continuous flow manufacturing operations around the globe.