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The real news should be Why CEOs Aren't Being Fired Fast Enough When bad CEOs do get fired, you often hear 'finally, what took them so long to rid of that guy'

by qwrusz 10y ago

The real news should be Why CEOs Aren't Being Fired Fast Enough When bad CEOs do get fired, you often hear 'finally, what took them so long to rid of that guy' and not 'aww, guy just got there, the board should have given him a longer chance'[1]. The upswing in stock price following a forced CEO turnover may be seen as corroborating this sentiment. Why are poorly performing CEOs not being replaced quicker when corporate boards with a fiduciary responsibility have more than enough evidence he/she is not the right person for the job?... [1] Ron Johnson is the only recent example I can remember where I heard maybe a couple people say that felt fast.

Bartweiss 10y ago
I don't think we should see those things as mutually exclusive. I might combine the arguments as "CEOs should be fired for personal performance, not corporate or economic upheavals." Stumpf left Wells Fargo over a debacle he neither created nor directly managed. Certainly, over something less visible and attributable than Cordiner at G.E. There's no particular reason to think that the new CEO is more qualified to reform incentive structures and security precautions than he is, so it was just a changing of the guard to show that something was being done. Meanwhile someone like Ballmer was ousted about a decade after the industry had decided it was necessary. I knew college students who swore they wouldn't work at Microsoft until Ballmer left, and that was years before he finally did. Even if you feel he did a good job, it's pretty undeniable that his presence was toxic to Microsoft's reputation and ability to recruit. And yet he only left when Microsoft's problems became undeniable and 'new blood' was needed to buoy the share price. To me, the most consistent narrative is that boards fire CEOs when a problem becomes so public that they need someone to hold responsible. That means both ignoring incompetence if things are running uneventfully, and ignoring competence (or reasonable ignorance) when a scandal comes through.
- r00fus 10y ago
  > Stumpf left Wells Fargo over a debacle he neither created nor directly managed. Cite needed. Right now it's completely not clear, except that widespread, clearly illegal activity happenend on his watch. I think it's ridiculous to compare Stumpf with Ballmer who simply wasn't as good as he could have been - he increased profits during his tenure, and to my knowledge, did not preside over shady activity (in contrast to Bill Gates who was happy to "knife the baby" of his competitors).

by qwrusz 10y ago

Bartweiss 10y ago

I don't think we should see those things as mutually exclusive. I might combine the arguments as "CEOs should be fired for personal performance, not corporate or economic upheavals." Stumpf left Wells Fargo over a debacle he neither created nor directly managed. Certainly, over something less visible and attributable than Cordiner at G.E. There's no particular reason to think that the new CEO is more qualified to reform incentive structures and security precautions than he is, so it was just a changing of the guard to show that something was being done. Meanwhile someone like Ballmer was ousted about a decade after the industry had decided it was necessary. I knew college students who swore they wouldn't work at Microsoft until Ballmer left, and that was years before he finally did. Even if you feel he did a good job, it's pretty undeniable that his presence was toxic to Microsoft's reputation and ability to recruit. And yet he only left when Microsoft's problems became undeniable and 'new blood' was needed to buoy the share price. To me, the most consistent narrative is that boards fire CEOs when a problem becomes so public that they need someone to hold responsible. That means both ignoring incompetence if things are running uneventfully, and ignoring competence (or reasonable ignorance) when a scandal comes through.

r00fus 10y ago
> Stumpf left Wells Fargo over a debacle he neither created nor directly managed. Cite needed. Right now it's completely not clear, except that widespread, clearly illegal activity happenend on his watch. I think it's ridiculous to compare Stumpf with Ballmer who simply wasn't as good as he could have been - he increased profits during his tenure, and to my knowledge, did not preside over shady activity (in contrast to Bill Gates who was happy to "knife the baby" of his competitors).