The turnover rate for the chief executive officers of major American companies is relatively small when retirements are taken out of the equation. Most have good relationships with their boards. Even poor financial results often do not result in terminations of CEOs.
Recently, poor judgment about relationships with employees and the people the company does business with has become a trigger, one that was much less as issue a generation ago. However, several CEOs have done such a poor job as heads of their companies this year that their boards should let them go, and soon.
These are the CEOs who have done so much damage that they should be ousted. Some of these CEOs also rank among the country’s highest paid corporate leaders. Here is a full list of the highest paid CEOs at America’s largest companies.
William McMullen, Kroger
The huge grocery chain has been flanked, successfully, by Walmart, Amazon and potentially Target. Based on share price, management has done nothing to hold off the competition. The stock is down 26% in the past year. Kroger has been unable to turn its footprint of 2,760 stores to any advantage. It has followed competition into online shopping, home delivery and store pick-up from orders previously placed. However, McMullen has not come up with a formula to restart revenue growth and leverage the company’s famous and widely known brand.
Even company supporters take a dim view of its current situation. Pivotal Research’s Ajay Jain upgraded Kroger‘s shares, according to Barron’s, which said, “Jain admits that there’s not a lot on the horizon in terms of near-term catalysts for Kroger stock.”
Dennis Muilenburg, Boeing
In the recent history of corporate America, it is rare that a huge company’s reputation has been damaged as much as Boeing’s was with the 737 Max 8 disasters, which included two fatal crashes. There have been a series of accounts of troubling news since then. One had to do with a flaw in the software of the plane, which Boeing is in a rush to repair as deliveries of the model plunge. These are Boeing’s troubles in a nutshell.
Another accusation was that the Federal Aviation Administration allowed Boeing to do much of the certification of the plane and that the relationship between the FAA and Boeing was too close for comfort. More problems with the plane have delayed the time when it can go back into service until next year. Muilenburg has effectively dodged the rule that the CEO is responsible for a company’s culture. So has the board.
Art Peck, Gap
The apparel retailer already has tacitly admitted that it has crumbled under Peck. The company has spun out the only successful division, Old Navy, which will become its own publicly traded corporation. Peck will not run it, but Old Navy chief Sonia Syngal will. Peck gets Gap’s dogs, which include Gap, Banana Republic and Intermix. This will give Peck the chance to close more underperforming stores.
When announcing the deal, Robert Fisher, Gap’s board chair, said, “Following a comprehensive review by the Gap Inc. Board of Directors, it’s clear that Old Navy’s business model and customers have increasingly diverged from our specialty brands over time.” Over time, Gap has closed hundreds of stores. Analysts expect no improvement at the company Peck will lead.
Leslie H. Wexner, L Brands
It is almost unheard of that a CEO is savaged in a media account about his relationship with someone outside his company. Several media reports, particularly in The New York Times, described Wexner’s long friendship with now-deceased sex offender Jeffrey Epstein. Epstein was given sweeping control over Wexner’s finances. Epstein also tried to become involved in the recruitment of models for Victoria’s Secret, part of L Brands, according to reports.
L Brands shares have plummeted almost 20% in the past month and are down by about half from their 52-week high. Even before the Epstein matter, L Brands results had faltered badly. Recent earnings confirmed the trend.