WEBVTT - What Does It Cost to Replace a CEO?

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news. If you've been anywhere

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<v Speaker 1>on the Internet recently, you've probably seen the same viral

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<v Speaker 1>video I have. It's a closeup of a man and

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<v Speaker 1>a woman embracing up on the JumboTron at a Coldplay concert.

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<v Speaker 1>When they find out they're on screen, they panic.

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<v Speaker 2>Or show.

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<v Speaker 1>It was an awkward moment. Once the clip started gaining

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<v Speaker 1>traction online, internet flews discovered it was in fact an affair,

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<v Speaker 1>and they also discovered another awkward ringle. The woman in

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<v Speaker 1>the video was the chief people officer at a data

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<v Speaker 1>technology company called Astronomer, and the man in the video

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<v Speaker 1>was Astronomer's CEO. Well after that video blew up the

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<v Speaker 1>former CEO, just days later, the board accepted the CEO's

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<v Speaker 1>resignation and installed an interim chief.

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<v Speaker 2>In light of the amazingly unique and wild circumstances of

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<v Speaker 2>him being caught with his HR chief at the Coldplay concert,

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<v Speaker 2>he was summarily dismissed.

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<v Speaker 1>Matthew Boyle, Bloomberg's Management and work reporter, says the Astronomer

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<v Speaker 1>leader's ouster might be uniquely dramatic, but it's just the

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<v Speaker 1>latest in a series of CEO departures, terminations, and resignations

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<v Speaker 1>that Bloomberg has been tracking.

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<v Speaker 2>Last year saw a record number of CEOs who not

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<v Speaker 2>just departed big public US companies, but by our determination

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<v Speaker 2>and the determination of an outside expert, were ousted, were

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<v Speaker 2>essentially forced out.

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<v Speaker 1>Matthew's teams spoke with academics, corporate lawyers, executive search advisors,

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<v Speaker 1>and public relations experts, and partnered with compensation consulting firm

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<v Speaker 1>Ferry and Advisors to analyze CEO departures at some of

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<v Speaker 1>the world's biggest companies.

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<v Speaker 2>There were one hundred and thirty four forceouts in twenty

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<v Speaker 2>twenty four, including some very big companies we all know.

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<v Speaker 2>Nike was one. Just do It, the world's largest athletic

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<v Speaker 2>clothing company, is doing a leadership change. Starbucks was another.

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<v Speaker 2>Starbucks shook the restaurant industry by replacing CEO Laxman Narrisimhand

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<v Speaker 2>with Brian Nickel. Intel, CEO of Intel is out, Petco,

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<v Speaker 2>Victoria's Secret Peloton. These are all companies that decided that

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<v Speaker 2>they were not happy with their current CEO, and the

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<v Speaker 2>question I was seeking to answer was what is this costs?

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<v Speaker 1>The answer a whole lot variant found that to force

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<v Speaker 1>out these CEOs, companies paid a median of three point

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<v Speaker 1>one million dollars in cash, and for companies paying equity,

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<v Speaker 1>a median of six point two million dollars.

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<v Speaker 2>What is this cost to get rid of the CEO

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<v Speaker 2>you don't like? What does it cost to recruit the

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<v Speaker 2>new savior CEO who you really do want? What about

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<v Speaker 2>the lawyers and the PR people, and what about the

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<v Speaker 2>search firms that look for the new CEO? What happens

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<v Speaker 2>even to employee productivity?

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<v Speaker 1>For Astronomer, It's hard to tally the true cost of

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<v Speaker 1>the CEO's departure, in part because the company is private,

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<v Speaker 1>but it's damage control campaign can't have been cheap.

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<v Speaker 2>Hi, I'm Gwyneth Paltrow.

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<v Speaker 1>I've the company hired a crisis PR firm and put

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<v Speaker 1>out a video starring Gwyneth Paltrow, who just happens to

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<v Speaker 1>be the ex wife of Coldplay frontman Chris Martin.

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<v Speaker 2>Thank you for interest in Astronomer.

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<v Speaker 1>We reached out to Paltrow's representatives and her company Goop

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<v Speaker 1>to find out what she made for the ad spot.

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<v Speaker 1>As of this recording, we haven't heard back, but her

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<v Speaker 1>biographer told Us Weekly that t was likely paid millions

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<v Speaker 1>based on previous appearances millions for a one minute ad.

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<v Speaker 1>I'm Sarah Holder, and this is the big take from

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<v Speaker 1>Bloomberg News Today on the show, why it's so expensive

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<v Speaker 1>to replace the CEO and how those costs down to

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<v Speaker 1>the rest of us. It probably won't surprise you to

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<v Speaker 1>hear that American CEOs get paid a lot. Last year,

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<v Speaker 1>media and compensation for the one hundred highest paid CEOs

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<v Speaker 1>at public companies was nearly thirty one million dollars, according

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<v Speaker 1>to the pay consultant Equilar. The high pay also comes

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<v Speaker 1>with higher pressure to perform, and Bloomberg's Management and Work

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<v Speaker 1>reporter Matthew Boyle says last year a surprising number of

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<v Speaker 1>CEOs were shown the exit twenty.

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<v Speaker 2>Twenty four was a record figure. And is that because

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<v Speaker 2>there is more scrutiny on CEOs these days, not just

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<v Speaker 2>around maybe performance, but around, you know, what they're saying

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<v Speaker 2>on perhaps other issues. I think there's also been a

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<v Speaker 2>rush of CEOs to either leave voluntarily or involuntarily, because

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<v Speaker 2>during COVID, a lot of CEOs stuck around just saying,

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<v Speaker 2>I'm just going to get our company through COVID. Let's

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<v Speaker 2>just get through COVID and now it's time to hang

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<v Speaker 2>it up. Or they got their company through COVID and

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<v Speaker 2>now they look at Trump two point zero and they say, oh,

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<v Speaker 2>my goodness, I can't handle this as well. But also

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<v Speaker 2>a lot of these are just performance issues. I mean

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<v Speaker 2>they are underperforming. They were either chosen poorly or they

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<v Speaker 2>were not the right person at the right time. And

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<v Speaker 2>so when we saw that number one hundred and thirty four,

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<v Speaker 2>we said, my goodness, we need to take a look

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<v Speaker 2>at what's going on here. And twenty twenty five, the

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<v Speaker 2>current year, we're also on pace for a new record

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<v Speaker 2>as well in terms of the number of CEOs ousted already, yes,

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<v Speaker 2>already for the half year, so it could be another

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<v Speaker 2>record year.

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<v Speaker 1>Actually, well, let's start to break down some of the

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<v Speaker 1>costs that you dug into. First, there's the cost of

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<v Speaker 1>just getting rid of someone for cause, not for cause.

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<v Speaker 1>How are those kinds of payments structured.

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<v Speaker 2>Usually it's a set of payments where sometimes they will

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<v Speaker 2>pay their salary for the remainder of the year, even

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<v Speaker 2>for an additional year some type of cash bonus. So

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<v Speaker 2>let's say he was there for half of the fiscal

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<v Speaker 2>year and then was terminated, he might still get a

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<v Speaker 2>bonus for that year, which makes you kind of scratch

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<v Speaker 2>your head, what wait, you fired him, Why is he

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<v Speaker 2>or she getting a bonus?

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<v Speaker 1>Pro rated bonus is kind of crazy.

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<v Speaker 2>Yeah again, rules are different for CEOs, so they're going

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<v Speaker 2>to get some type of pro rated bonus for the

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<v Speaker 2>for the current year. But then where it gets really

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<v Speaker 2>interesting and the numbers start to get really bigger is

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<v Speaker 2>the equity. And these could be in the form and

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<v Speaker 2>I know these terms are arcane, but restricted stock units,

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<v Speaker 2>performance stock units RSUs, PSUs, stock options as well. There's

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<v Speaker 2>a million different flavors of equity and the basic way

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<v Speaker 2>to break it down is some of them you'll just

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<v Speaker 2>get for hanging around. They're time based, you know, they

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<v Speaker 2>will eventually vest over time. Some of them are performance based.

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<v Speaker 2>They're tied to some sort of metric that you do

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<v Speaker 2>have to hit. But my point is when these CEOs

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<v Speaker 2>are terminated again, in three quarters of the companies we

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<v Speaker 2>looked at, there was some sort of accelerated vesting, which

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<v Speaker 2>means those shares that you were going to have to

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<v Speaker 2>wait five years for they're all yours now. For example,

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<v Speaker 2>the Starbucks CEO, we still don't know the final value

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<v Speaker 2>of his severance because it is based on pro rated

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<v Speaker 2>payments that are tied to the company's current fiscal year

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<v Speaker 2>and next fiscal year. He might get paid something for

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<v Speaker 2>the performance of Starbucks, like two years after he left.

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<v Speaker 1>Can you say more about the ousted Starbucks CEO? Was

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<v Speaker 1>his pay package and his exit package on the high side.

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<v Speaker 2>It was on the high side and in both cases,

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<v Speaker 2>and by that I mean the severance of Laxman Harasimam

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<v Speaker 2>was extraordinarily high among the companies we looked at, and

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<v Speaker 2>the payment to the incoming CEO, Brian Nickel was one

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<v Speaker 2>of the highest we have ever seen. He got ninety

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<v Speaker 2>million dollars, ten million dollars and sign on payments and

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<v Speaker 2>eighty million dollars in equity just for coming in the door.

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<v Speaker 2>And that gets into this whole area of what we

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<v Speaker 2>call make whole payments. The reason that number is so

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<v Speaker 2>big is because Brian Nicol was doing a very very

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<v Speaker 2>good job at his previous employer, Chippotle, and he was

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<v Speaker 2>getting this money at Chippotle for extraordinarily good performance. So Starbucks,

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<v Speaker 2>in order to wrench him out of Chipotle, basically had

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<v Speaker 2>to say we have to match that.

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<v Speaker 1>In a statement, A Starbucks spokesperson told Bloomberg, we brought

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<v Speaker 1>in a proven leader with a strong track record to

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<v Speaker 1>set Starbucks up for success and create long term value

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<v Speaker 1>for all stakeholders. He's backed by an experienced team, and

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<v Speaker 1>much of his compensation is tied to future financial performance.

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<v Speaker 1>Let's talk about maybe a more average company trying to

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<v Speaker 1>poach a new CEO or a new CEO. What are

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<v Speaker 1>some of the typical costs that go into that.

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<v Speaker 2>For a more typical CEO, you're usually hiring a search firm.

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<v Speaker 2>Corn Ferry and Spencer Stewart are two of the better

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<v Speaker 2>known ones. You are going to pay that search firm, though,

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<v Speaker 2>usually one third of the new CEO's first year payments

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<v Speaker 2>first year compensation, and that could be a million bucks.

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<v Speaker 2>It could be up to five million dollars in some cases,

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<v Speaker 2>so it is not chump change. But that's only the beginning.

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<v Speaker 2>There are compensation consultants, and then you have all these

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<v Speaker 2>other advisors. You need to pay PR consultants to sort

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<v Speaker 2>of spin the departure because this has to be spun.

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<v Speaker 2>Lawyers as well. PR people. Really good ones can cost

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<v Speaker 2>one thousand dollars an hour. Really good lawyers can cost

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<v Speaker 2>two thousand dollars an hour to negotiate all the disclosures

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<v Speaker 2>and filings you have to do to negotiate and hammer

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<v Speaker 2>out the contract for the outgoing CEO and the incoming CEO.

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<v Speaker 1>You know, the Astronomer team hired the crisis PR firm

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<v Speaker 1>behind Blake Lively's PR.

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<v Speaker 2>Can't probably not an expense they were expecting to have

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<v Speaker 2>in their twenty twenty five fiscal year. But here we are.

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<v Speaker 2>But one big cost that I didn't expect when I

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<v Speaker 2>started doing reporting, but that does come into play is

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<v Speaker 2>that the new CEO is probably going to want other

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<v Speaker 2>new people around him or her. So what we often

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<v Speaker 2>see is that what we call the c suite, the

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<v Speaker 2>executive leadership of a company will usually have other departures

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<v Speaker 2>and arrivals after the new CEO comes in. So Starbucks

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<v Speaker 2>brought in a new CFO, Chief Financial Officer, Kathy Smith,

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<v Speaker 2>highly regarded CFO. She received eleven point four million to

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<v Speaker 2>come on board again, just her sign on and what

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<v Speaker 2>we call the make whole payments. Because she was earning

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<v Speaker 2>a lot at her last job. You got to pay

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<v Speaker 2>the piper to get her into this new job. So

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<v Speaker 2>Starbucks wanted her though Brian Nickel wanted her. That's what

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<v Speaker 2>she got, and.

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<v Speaker 1>Then they had to push out the old CFO.

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<v Speaker 2>You say bye bye to that person. Guess what that's

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<v Speaker 2>a seference cost. And meanwhile, the other executives at the

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<v Speaker 2>company are getting very nervous because a new CEO is

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<v Speaker 2>coming in and they're worried. And there's usually some type

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<v Speaker 2>of interregnum period where there is no CEO, certain executives

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<v Speaker 2>are brought on as what we call an interim CEO.

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<v Speaker 2>Let's say you take the chief operating officer and say,

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<v Speaker 2>you know, look, look Laura, we just need you for

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<v Speaker 2>six months just to like steer the ship, keep the

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<v Speaker 2>trains running on time, and we're going to give you

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<v Speaker 2>one point two million dollars as a retention bonus.

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<v Speaker 1>Sounds pretty good, not a bad.

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<v Speaker 2>Deal, Yeah, And sometimes they backfire because the executives who

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<v Speaker 2>get paid the bonuses are not retained. They leave either

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<v Speaker 2>voluntarily or involuntarily. Later, more severance, more recruitment costs. It

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<v Speaker 2>just keeps adding and adding, which was just so fascinating

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<v Speaker 2>to me. I was like, my god, when does this

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<v Speaker 2>ever end.

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<v Speaker 1>So that's how the costs to push out a CEO

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<v Speaker 1>can spiral. But how does all this tummult impact all

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<v Speaker 1>the people who work at and invest in these companies?

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<v Speaker 1>That's after the break. It sounds like everyone in the

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<v Speaker 1>c suite makes money when CEOs are replaced, the outgoing CEO,

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<v Speaker 1>the incoming CEO, other executives, But for everyone else, dealing

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<v Speaker 1>with a leadership transition can be stressful. You might have

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<v Speaker 1>a new boss, Your boss might have a new boss.

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<v Speaker 1>I asked Bloomberg's Management and Work reporter Matthew Boyle how

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<v Speaker 1>the drama associated with the CEO leaving can impact all

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<v Speaker 1>the other people left working at the company.

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<v Speaker 2>People get very nervous. Am I going to have a

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<v Speaker 2>new boss? Am I going to have a new job?

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<v Speaker 2>Is there going to be a layoff? Are they going

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<v Speaker 2>to bring in the McKinsey consultants and start to do

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<v Speaker 2>some big sort of strategy overhaul?

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<v Speaker 1>Are we taking things in a different direction?

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<v Speaker 2>Exactly? Exactly, so, you certainly are going to have a

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<v Speaker 2>hit to productivity and possibly an increase in your voluntary

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<v Speaker 2>turnover when you have a CEO changeover like this.

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<v Speaker 1>Well, there's a final category of costs that we haven't

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<v Speaker 1>talked about yet, which is shareholder value. If you boot

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<v Speaker 1>your CEO your stock can drop. Obviously, the hope is

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<v Speaker 1>that you're going to turn things around. The stocks will

0:12:58.360 --> 0:13:03.360
<v Speaker 1>rise eventually. Changing leadership will reasure investors. But what did

0:13:03.360 --> 0:13:05.040
<v Speaker 1>you find when you looked at the hit to stock

0:13:05.080 --> 0:13:08.120
<v Speaker 1>price during these transition periods and in the periods thereafter.

0:13:08.320 --> 0:13:11.680
<v Speaker 2>The day Brian Nicol was announced as the new CEO,

0:13:12.000 --> 0:13:14.480
<v Speaker 2>the stock jumped. It was like, oh, my goodness, they

0:13:14.600 --> 0:13:17.720
<v Speaker 2>found this rock star. The shares rose twenty three some

0:13:17.840 --> 0:13:18.440
<v Speaker 2>odd percent.

0:13:18.760 --> 0:13:20.440
<v Speaker 1>We're going to be Chipotle exactly.

0:13:20.760 --> 0:13:25.600
<v Speaker 2>Everything's awesome. What was lost in that analysis The shares

0:13:25.600 --> 0:13:28.120
<v Speaker 2>had fallen twenty five percent in the twelve months leading

0:13:28.160 --> 0:13:30.560
<v Speaker 2>up to that. So guess what, it's a wash. So

0:13:30.600 --> 0:13:33.200
<v Speaker 2>you have to look at the full period, not just

0:13:33.240 --> 0:13:36.040
<v Speaker 2>the one day stock jump on the day that the

0:13:36.080 --> 0:13:37.800
<v Speaker 2>new savior CEO is announced.

0:13:38.640 --> 0:13:41.680
<v Speaker 1>There hasn't been much research looking deeply at this question.

0:13:42.200 --> 0:13:44.520
<v Speaker 1>The last data Matthew could find comes from a twenty

0:13:44.600 --> 0:13:49.440
<v Speaker 1>fifteen study by PwC, which analyzed CEO transitions at twenty

0:13:49.440 --> 0:13:53.240
<v Speaker 1>five hundred companies across three years. By looking at the

0:13:53.280 --> 0:13:56.920
<v Speaker 1>median shareholder returns in the year before and after a

0:13:57.000 --> 0:14:02.400
<v Speaker 1>CEO changeup, PwC estimated for the world's largest public companies.

0:14:02.800 --> 0:14:06.360
<v Speaker 1>These kinds of force turnovers cost one point eight billion

0:14:06.480 --> 0:14:09.840
<v Speaker 1>dollars in shareholder value, and that was ten years ago.

0:14:10.400 --> 0:14:12.480
<v Speaker 2>So that is the hit to shareholders, and it really

0:14:12.520 --> 0:14:15.559
<v Speaker 2>speaks to a company should do a better job of

0:14:15.679 --> 0:14:17.040
<v Speaker 2>you know. This is what it all gets to is

0:14:17.120 --> 0:14:21.120
<v Speaker 2>corporate governance and succession planning, and companies need to do

0:14:21.160 --> 0:14:24.080
<v Speaker 2>a much better job of They spend millions on these

0:14:24.120 --> 0:14:27.560
<v Speaker 2>search firms and on succession planning and building up what

0:14:27.560 --> 0:14:30.720
<v Speaker 2>they call their bench, you know, their managers below the CEO,

0:14:30.840 --> 0:14:34.680
<v Speaker 2>who could one day run the show. But oftentimes, as

0:14:34.680 --> 0:14:37.720
<v Speaker 2>we've seen here obviously, with a record number of ousters

0:14:37.720 --> 0:14:40.280
<v Speaker 2>and all these costs flying around, they're not doing a

0:14:40.360 --> 0:14:42.640
<v Speaker 2>very good job of it at the moment. So, you know,

0:14:42.720 --> 0:14:45.600
<v Speaker 2>and that's on the blame goes to the companies, and

0:14:45.640 --> 0:14:48.160
<v Speaker 2>it certainly goes to boards boards of directors as well.

0:14:48.240 --> 0:14:50.720
<v Speaker 1>Are there any examples of companies that have managed to

0:14:50.760 --> 0:14:54.520
<v Speaker 1>replace their CEO in a more cost effective, less disruptive

0:14:54.560 --> 0:14:57.080
<v Speaker 1>way this year? I'm thinking about Warren Buffett actually.

0:14:56.800 --> 0:15:00.000
<v Speaker 2>For example, Yes, I mean, Buffett as usual is an

0:15:00.200 --> 0:15:03.080
<v Speaker 2>icon here and we've all known for years and years.

0:15:03.120 --> 0:15:05.400
<v Speaker 2>It was a bit of a horse race or parlor game.

0:15:05.520 --> 0:15:08.160
<v Speaker 2>You know who was going to be the successor, and

0:15:08.200 --> 0:15:11.280
<v Speaker 2>in the end choosing able right a very smart choice.

0:15:11.360 --> 0:15:14.840
<v Speaker 2>I mean it got resoundingly positive feedback because I think

0:15:14.920 --> 0:15:17.760
<v Speaker 2>Warren had the benefit of time. He is Berkshire Hathaway.

0:15:18.040 --> 0:15:20.840
<v Speaker 2>There was no activist investor banging on the door saying

0:15:21.000 --> 0:15:22.960
<v Speaker 2>we need to know the new who's going to replace

0:15:23.000 --> 0:15:25.920
<v Speaker 2>Warren within six months, or we're going to you know, uh,

0:15:26.080 --> 0:15:27.960
<v Speaker 2>the trust we're going to raise out exactly. He has

0:15:28.040 --> 0:15:32.360
<v Speaker 2>such a reservoir of trust. Few companies have that reservoir

0:15:32.440 --> 0:15:34.720
<v Speaker 2>of trust, I would say in American business right now.

0:15:35.200 --> 0:15:38.840
<v Speaker 1>This is perhaps an obvious question, but if companies are

0:15:38.880 --> 0:15:43.960
<v Speaker 1>spending all this money on CEO transitions, what aren't they

0:15:44.000 --> 0:15:46.200
<v Speaker 1>spending it on. Does this come at the expense of

0:15:46.440 --> 0:15:50.960
<v Speaker 1>employee salaries, investing in new products? How do companies make those.

0:15:51.520 --> 0:15:53.600
<v Speaker 2>It's a really good question, and I think it comes

0:15:53.600 --> 0:15:56.160
<v Speaker 2>at the expense of a lot of different things. If

0:15:56.200 --> 0:15:59.240
<v Speaker 2>you're paying out all this money to the CEO, you

0:15:59.320 --> 0:16:01.600
<v Speaker 2>might not be paying enough for your CFO and the

0:16:01.640 --> 0:16:04.640
<v Speaker 2>other executives. It's certainly kind of coming to cost of

0:16:04.720 --> 0:16:07.880
<v Speaker 2>paying your rank and file employees as well, maybe you're

0:16:07.920 --> 0:16:10.840
<v Speaker 2>cutting the training budget what we call the learning and

0:16:10.840 --> 0:16:13.640
<v Speaker 2>development budgets, so there won't be as many opportunities for

0:16:13.760 --> 0:16:17.200
<v Speaker 2>employees to learn new skills. Let's say in an age

0:16:17.240 --> 0:16:20.000
<v Speaker 2>of AI that's more important than ever. But you're also

0:16:20.040 --> 0:16:22.800
<v Speaker 2>made the good point business opportunities missed when you have

0:16:22.920 --> 0:16:25.720
<v Speaker 2>no CEO or you're looking for a new one. I

0:16:25.720 --> 0:16:27.760
<v Speaker 2>think there are certainly, and many of the people I

0:16:27.840 --> 0:16:30.320
<v Speaker 2>talked to for the story said there is an opportunity

0:16:30.400 --> 0:16:32.880
<v Speaker 2>cost there. You're not launching that new product, you're not

0:16:33.120 --> 0:16:35.680
<v Speaker 2>entering a new market, You're missing out on a potential

0:16:35.760 --> 0:16:38.160
<v Speaker 2>M and a deal you know that would have transformed

0:16:38.200 --> 0:16:40.920
<v Speaker 2>the company. But you are so consumed with this CEO

0:16:41.080 --> 0:16:44.840
<v Speaker 2>changeover that you have blinders on.

0:16:44.840 --> 0:16:47.400
<v Speaker 1>One of the takeaways that I think you've really highlighted

0:16:47.680 --> 0:16:51.920
<v Speaker 1>is it seems like CEOs always make a lot of money,

0:16:51.960 --> 0:16:54.360
<v Speaker 1>even if they screw things up or cost the scandal.

0:16:54.440 --> 0:16:57.920
<v Speaker 1>Is that fair? Like, do CEOs always fail up to

0:16:57.960 --> 0:16:59.480
<v Speaker 1>the tune of millions of dollars?

0:16:59.560 --> 0:17:01.560
<v Speaker 2>Yeah? I mean, I mean there's no other way to

0:17:01.600 --> 0:17:04.000
<v Speaker 2>answer that but to say, yes, they get paid on

0:17:04.119 --> 0:17:09.120
<v Speaker 2>goodly sums. We know CEO pay is just increasing all

0:17:09.160 --> 0:17:12.560
<v Speaker 2>the time. It's like hockey stick growth. So given that

0:17:12.640 --> 0:17:15.800
<v Speaker 2>a lot of these payments are usually based on what

0:17:15.920 --> 0:17:18.600
<v Speaker 2>the CEOs are earning in a given year, we certainly

0:17:18.680 --> 0:17:20.399
<v Speaker 2>know that the cost to get rid of a CEO

0:17:20.960 --> 0:17:23.600
<v Speaker 2>is only increasing. There's no way these things ever go

0:17:23.720 --> 0:17:27.119
<v Speaker 2>down unless you know, CEO pay does not go down.

0:17:27.359 --> 0:17:29.959
<v Speaker 2>The cost of making a mistake with hiring a CEO

0:17:30.480 --> 0:17:32.840
<v Speaker 2>is not going to go down. I mean. An interesting

0:17:32.880 --> 0:17:35.199
<v Speaker 2>thing that's in proxy statements now is what they call

0:17:35.240 --> 0:17:37.520
<v Speaker 2>the CEO pay ratio, where they have to say what

0:17:37.560 --> 0:17:40.840
<v Speaker 2>does the CEO may compare to the media and employee.

0:17:41.200 --> 0:17:43.480
<v Speaker 2>Some of these ratios are like six hundred to one,

0:17:43.840 --> 0:17:46.280
<v Speaker 2>and I know that raises much bigger questions about you know,

0:17:46.320 --> 0:17:50.560
<v Speaker 2>the American worker and wages and unions, you know, and

0:17:50.640 --> 0:17:53.160
<v Speaker 2>all that, But it really just shows that CEO pay

0:17:53.520 --> 0:17:57.359
<v Speaker 2>has been stratospheric for years, and anytime they try to

0:17:57.400 --> 0:17:59.960
<v Speaker 2>rein it in, one of the unintended consequences is they've

0:18:00.200 --> 0:18:03.560
<v Speaker 2>find other workarounds and loopholes and ways to pay them more.

0:18:03.920 --> 0:18:06.480
<v Speaker 2>But whoever is paid, they're going to be getting plenty

0:18:06.520 --> 0:18:09.040
<v Speaker 2>of money. Yes, that's the common denominor here.

0:18:09.600 --> 0:18:12.400
<v Speaker 1>Well, Matthew, thank you so much. This is a great conversation.

0:18:12.440 --> 0:18:13.720
<v Speaker 2>Sure, thanks so much for having me.

0:18:20.240 --> 0:18:23.159
<v Speaker 1>This is the Big Take from Bloomberg News. I'm Sarah Holder.

0:18:23.440 --> 0:18:26.040
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