Shareholders Give U.S. Business Chiefs The Chop
Heads are rolling across corporate America as several top chief executives become victims of impatient shareholders who are disappointed with profits and volatile and unforgiving markets. John Howard writes.
Market and investor pressure is mounting throughout America over poor performing companies along with shareholders being no longer prepared to accept mediocrity.
Chief executives at Proctor & Gamble (P&G), Coca-Cola and Mattel, the maker of Barbie dolls, have all been fired in the past month.
On Thursday Durk Jager, president of consumer products giant, Proctor & Gamble, joined the "hit list," as it's being called, amid concerns of falling profits and failure to perform.
After leading Proctor & Gamble for 30 years, Jager left as the company announced that profits would remain flat. Analysts had been predicting a 15 per cent increase.
Stock value which reached $118 in January closed at $56.75 on Thursday.
P & G began a drastic restructuring plan this fiscal year, including promising to cut 15,000 jobs over five years.
Jager follows Douglas Ivester of Coca-Cola, who left after a series of difficulties in Europe and a decrease in corporate profits.
Jill Barad, the brash CEO of toymaker Mattel, has also gone after stock prices fell $10 dollars, down from $48 dollars two years ago.
At Xerox, Rick Thoman was pushed out the door last month after only one year. Like P & G, the Xerox company was in the middle of restructuring and had experienced losses over the last quarter.
Floyd Hall, boss at giant retailer Kmart who saved the chain of stores from failure five years ago, has also been let go because of recent setbacks.
Jager going from P&G on Thursday meant his departure was the 36th major corporate executive to hit the streets since June 1.
The trend is not limited to major corporates either. Small and mid-size companies are also giving their chief executives the DCM flick.
"The market is impatient. It's not allowing executives as much time as they used to have," said Daniel Peris, an analyst at Argus Research.
Based on the old business adage - America sneezes and New Zealand catches the cold - there might be some New Zealand chief executives also starting to worry about their future - batten down the hatches.