Directors

How public companies announce CEO sackings for bad behaviour


April 5, 2022

This list looks at the way public companies announce they have sacked their CEO for poor behaviour. Many CEOs are terminated against their wishes, but few disclose the specifics.

Cleanaway 2021: The AFR ran numerous stories about bullying allegations at Cleanaway but the announcement about the departure of CEO Vik Bansal in January 2021 was full of nice words. However, this earlier ASX statement in September 2020 responding to an AFR article said Vik "acknowledged that his behaviour should have been better and expressed contrition".

David Jones, 2010: fired Mark McInnes for harassing a female staff member. Released this one pager saying that he admitted to "behaving in a manner unbecoming of a chief executive to a female member of staff", whilst also allowing McInnes to release this separate 4 paragraph statement. He received a $1.5 million settlement on top of statutory entitlements and Paul Zahra was immediately promoted to CEO from within.

James Hardie, 2022: set a new best practice with this announcement detailing how CEO Jack Truong had breached the code of conduct with poor staff interaction despite being given an opportunity to remedy his ways after a third party review. Was terminated with nothing more than his statutory entitlements.

Oil Search, 2021: After the 25 year rein of Peter Botten finally came to an end in April 2020, Dr Kieran Wulff took over as CEO but only lasted until July 19 last year when he resigned for "heath reasons", although the ASX announcement also said the departure followed "the receipt of recent concerns and complaints about his behaviour". The health issue was "a long term medical condition which has recently deteriorated". Lo and behold, Santos went public with its merger proposal the very next day and agreement was reached on September 10. Oil Search no longer exists, demonstrating how poor behaviour at the top can have profound implications.

Orica, 2015: whilst the press picked up on the bad behaviour of CEO Ian Smith, the company was more discrete releasing this statement head-lined "Orica announces leadership transition plan" talking about seeking a new CEO with "a different management style". They also released this statement using the word "termination" whilst disclosing Smith's $2.5 million payout in addition to statutory entitlements. The interim solution was non-executive director Alberto Calderon who went on to become the permanent CEO.

QBE Insurance, 2020: After 3 years as CEO, Pat Regan was fired for having an affair with his executive assistant, but this was only disclosed as "workplace communications" that breached the code of conduct. However, it was disclosed in the ASX announcement that an external investigation was commissioned and the board did say Regan "exercised poor judgment". The chair Mike Wilkins took over as interim executive chair and the departure package was announced a week later. He only got statutory entitlements and $310,000 in lieu of a reduced notice period.