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Consumer firms seeing unprecedented CEO exits in 2019
[SOUTHFIELD, Michigan] The departure on Tuesday of Tupperware Brands Corp chief executive officer Tricia Stitzel, which came shortly after CEO exits at McDonald's Corp and Gap Inc, put an exclamation point on an already bad year for executive turnover at US consumer companies.
So far in 2019, 45 CEOs have left under pressure from companies making everything from hamburgers to jeans. That's more than any other industry and represents a churn rate that is almost double that of last year and also surpasses the previous year, according to data collected from the Russell 3000 stock index by Exechange, which tracks CEO departures. So far, an average of five CEOs have departed each month this year.
"The data shows increasing pressure, and the pressure seems to be highest in 2019," said Daniel Schauber, founder of Exechange. Activists are ousting leaders who fail to revitalise their brands, he said.
Consumer-company leaders are falling prey to the rapidly shifting landscape in retail as shoppers migrate from brick-and-mortar stores to online and mobile commerce. A record 7,600 retail locations have closed this year, according to a Credit Suisse report.
Consumer companies outside the US have also seen changes at the top. Through both planned successions and shakeups, departures affected major brand names like Unilever NV, Tesco plc, Anheuser-Busch InBev NV and Imperial Brands plc.
The executive volatility shows no sign of abating and has increased in the last two months, Mr Schauber said. The company ranks CEO departures on a scale from zero to 10, with zero representing an amicable and voluntary departure and 10 as a forced firing. This month alone, five CEOs were ousted with a score of 10, according to his data.
"The consumer staples sector was always called a recession-proof and defensive sector," Mr Schauber said. "You shouldn't see any pressure at all now that stock markets are at an all-time high. But there's a big shift in these industries."