Friday 5th February 2021
This article first appeared in the Morning Brief. Receive the Morning Letter straight to your inbox Monday through Friday by 6:30 a.m. ET. Subscribe to
After a break during COVID, CEO departures are on the rise again.
In one of the last morning briefs we published in 2020, before the COVID-19 pandemic became the big story of the year, we highlighted an increase in CEO turnover.
At the time, a still-expanding economy and raging stock market served as the backdrop for a senior class ready to take on a different challenge. According to recruitment agency Challenger, Gray & Christmas, a record 219 business executives left their posts in January 2020.
And then things changed.
Wartime companies and executives were forced to focus on keeping the lights on in the spring of 2020 as they weather an unprecedented economic shock. Growth and expansion were out, liquidity and survival were in.
For example, former Disney (DIS) CEO Bob Iger surprisingly resigned in late February 2020. In April, however, the New York Times reported that Iger “has effectively returned to running the company.” The best plans were blown up in the depths of the COVID-19 crisis.
But with businesses now able to look over the hill to the other side of the pandemic, one of the big business trends of last year seems to be reviving.
This week we saw two key CEOs – Jeff Bezos of Amazon (AMZN) and Ken Frazier of Merck (MRK) – announced that they would leave the CEO job and take on a role as Executive Chairman in their respective companies.
Frazier’s departure from Merck ends a decade-long run at the helm of the pharmaceutical giant to which he moved almost 30 years ago. Frazier is also one of the few black bosses at a Fortune 500 company, and his departure is another reminder that Corporate America has done an embarrassing job of developing and nurturing minority talent through its ranks.
Bezos’ departure from the tech giant he founded in 1994 marks the end of an era for what tech analyst Ben Thompson called and “arguably the greatest CEO in technology history, in large part because he created it.” three huge companies that all generate enormous consumer surplus and look forward to impregnable rifts. “
Back in February 2020, we argued that the departure of chief executives was a natural part of what was then a mature business cycle.
Brian Belski, a strategist at BMO, wrote last year that a CEO’s need after the financial crisis was to “preserve and protect.” The next era, Belski said, would require a leader who focuses on growing, not maintaining. And we would suggest that the COVID-induced economic disruption increasingly looks exactly like this – an interruption.
And on the other side of the pandemic, there is still a new economic cycle that will likely reward companies with the qualities 2020 seemed to demand: growth and investment rather than preservation and survival.
And with a generation of CEOs just weathering the most unprecedented crisis in their careers, you can expect more top executives to see the next few months as the right time to step aside.
from Myles Udland, a reporter and anchor for Yahoo Finance Live. Follow him up @MylesUdland
YAHOO FINANCIAL HIGHLIGHTS
New Crypto VC Fund Attracts Wall Street Billionaires and LL Cool J. at
Why Sir Richard Branson gave 23andMe millions of dollars to go public
The employment recovery in Hawaii is a case study of what could have gone right for the U.S.: Lt. Governor
–
Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, SmartNews, LinkedIn, Youtube, and reddit.
Find live stock quotes and the latest business and financial news
For tutorials and information on investing and trading stocks, see cash
