Should we fire CEOs more often?

In this issue:

• Heads are rolling at SingPost
• Got 18 years of experience? You could be Dyna-Mac’s new CEO

Good morning, BT readers. 

It has been an eyebrow-raising time in C-suite Land with SingPost’s shock executive firings. 

What’s remarkable isn’t that the public termination of executives happens, but that they don’t happen more frequently. Maybe they should.

What’s happening?

As a mere rubbernecker, I don’t know whether the SingPost executives were justifiably let go. I have about as much company-specific insight on the situation as this overwhelmed Amazon driver who jettisoned 80 parcels in the woods during the festive crunch season.

Even so, Parcelgate’s C-suite implosion is exceptional in all the ways that it has deviated from a typical firing in Singapore.

For starters, both sides have been exceedingly plain-spoken, the public sacking filled with corporate trigger words such as “immediate effect”(!), “grossly negligent”(!) and “serious misrepresentations”(!).

The trio who were sacked are not going quietly, either. Verbal grenades that have been lobbed back include: “vigorously contest”, “aggrieved”, and “neither due nor fair”. I’ve left out the implied exclamation marks this time because this is starting to look unhinged, but I assure you, them’s fightin’ words when uttered by men whose ties match their shoes.  

Even with all the loaded verbiage in the air, we are left with more questions than answers, said David Gerald, founder, president and chief executive of the Securities Investors Association (Singapore), last week. 

There might be deeper and broader reasons for SingPost’s Parcelgate woes, and BT’s Benjamin Cher examines these in his commentary on the unsustainable battle being fought in the e-commerce space. 

Why it matters

SingPost might be an outlier on the local landscape but, elsewhere, more CEOs than ever are jumping ship or being walked off a short plank. Last year in the US, a record number of CEOs left their firms – more than 1,800 at last count, a 19 per cent increase from 2023. 

Maybe these chaps were quitting to meditate in silent retreats, but I doubt it. A separate study found that 42 per cent of S&P 500 companies that swapped CEOs in 2024 were underperforming on total shareholder returns, up from 30 per cent in 2017. 

“It’s a clear signal to CEOs: Deliver value or face heightened scrutiny,” said Lyndon Taylor, partner at executive search firm Heidrick & Struggles.

American CEO defenestrations are everything that local ones are not – ruthless, swift and unrelenting. Intel is falling behind Nvidia? Goodbye, Pat Gelsinger. Nike’s stock is down 25 per cent? So long, John Donahoe. Oh, the American consumer isn’t buying enough sweatpants? Tough luck. Embattled department store Kohl’s is trying out its third CEO in six years.

Even the succeeding CEOs are on a loudly ticking clock. Laxman Narasimhan lasted just over a year at Starbucks before being ousted in August. Diageo’s new CEO, Debra Crew, has only been at her job since June 2023 but has already come under scrutiny for the alcohol firm’s poor share price performance.

It makes you wonder, really, what the local market would look like if more CEOs were subjected to similarly unforgiving treatment.

Singapore’s banks have hauled the Straits Times Index (STI) to an all-time high, but more than half of the STI counters actually finished 2024 down or flat. Of BT’s 10 Singapore stocks to watch in 2025, six posted share price declines in 2024; several posted double-digit slumps. The iEdge S-Reit Index, a proxy for Singapore-listed real estate investment trusts (S-Reits), ended 2024 down 11.3 per cent. 

That’s unfair, some might argue. Surely, sectors like real estate and retail are battling forces far larger and beyond their control, such as still-high interest rates and inflation. 

Elsewhere, however, boards don’t care whose else’s fault it is. In fact, the screws are turned tighter on the CEOs of companies facing industry-wide pressure. The US retail and consumer goods sector, for example, has been especially beleaguered as consumers spend less. Since 2023, Nestle, Unilever and Reckitt Benckiser Group have all swapped CEOs while dealing with cost and supply chain pressures.

It isn’t a coincidence, then, that the average tenure of CEOs in that sector was about seven months shorter compared with that of their peers in automobiles, finance, tech and manufacturing last year. “There is a fresh lack of patience at the board level,” said Jim Rossman, global head of shareholder advisory at Barclays, according to a Reuters report in September.

Granted, there are very real constraints to emulating the American approach. Many local firms are family controlled, shareholder activism here isn’t as sophisticated, and the talent pool is shallower. The worst underlying reason might be that fewer people can be arsed to pound boardroom tables as retail investors make the rational decision to shun most local stocks.

This isn’t to say that a CEO’s head ought to roll every time a company has a bad quarter. Instead, it is the likelihood of decapitation that should be ratcheted up. To that end, it’s not enough that a CEO leaves – it should also be made apparent why they left. Even with departures that are officially framed as retirements, there are many ways for boards to signal that the event was actually a corporate kiss-off for low performance. 

When a company or industry isn’t doing well, employees are shown the door. Last year, there were almost a dozen high-profile layoffs in Singapore. 

And so, maybe CEOs should be subjected to the same Darwinian subtext that has long formed the soundtrack of employees’ lives here: if your head is in greater danger, you will be kept on your toes more.

The big number: S$15,000

Do you have a deep and abiding love for the oil-and-gas business? Are you energised by a daily work commute to Gul Road? (Think of all the podcasts you’ll finally have time for!) You might just have what it takes to be Dyna-Mac’s new CEO. 

The offshore oil-and-gas contractor showed its executive chairman and CEO Lim Ah Cheng the door last month following its acquisition by South Korean conglomerate Hanwha. 

The sudden removal of the man credited with the firm’s turnaround was puzzling, BT’s Jude Chan wrote last week. “Take away Lim, and Dyna-Mac is arguably little more than a bunch of fabrication yards and some cash in the bank,” Chan said.

Now, Dyna-Mac is on the hunt for a new CEO, offering anywhere from S$15,000 to S$22,000 a month for the role, according to the company’s job listing. 

BT’s Chan observed that these figures work out to be less than half the S$593,904 in base salary that Lim earned in 2023.

In any case, more than 70 applicants have thrown their hat into the ring for the job so far. The listing closes on Jan 14, so brush off that LinkedIn profile quick. 

(Disclosure: I own shares in Nvidia and Starbucks)

5 big reads

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• Maybank says SingPost can potentially offer a ‘significant’ special dividend after sales of assets Maybank maintains its buy rating on SingPost, with a price target of S$0.77
• Nvidia’s remarkable stock surge mints three board billionaires Nvidia’s stock surged 171 per cent in 2024.
• Retail traders seek nearly US$60 billion for toymaker Bloks Group’s Hong Kong IPO Dealmakers are broadly expecting a better year for Hong Kong IPOs.
• Trendlines launches investigations into potential misappropriation of funds A police report has been made.