- Push-out Score suggests push-out forces
- After less than two and a half years in the position
- Accolades, praise and thanks for Lopez
- Jonathan Halkyard taking over
- Lopez made a lengthy statement and said 76 words
(exechange) — Charlotte, North Carolina, December 18, 2017 — Gerry Lopez, chief executive of Extended Stay America, leaves. It is a change at short notice. As announced by Extended Stay America, Inc. in a news release and in a regulatory filing published on Monday, December 18, 2017, Gerardo I. (Gerry) Lopez leaves his post as Chief Executive Officer at the hotel chain after less than two and a half years in the position, effective January 1, 2018.
No company wants a CEO to flame out in the first years.
Among the 3,000 largest publicly held companies incorporated in the U.S. based on market capitalization, the average tenure of the CEOs who departed over the past twelve months was 8.8 years, according to data compiled by exechange. Only 20 percent of the CEOs who departed over the past twelve months left the position within three years.
Lopez’ duties will be taken over by Jonathan Halkyard, currently Chief Financial Officer at Extended Stay America, Inc.
No reason given
In the announcement, Extended Stay America did not explicitly explain the reason for Lopez’ imminent move, leaving room for speculation.
Precise information about Lopez’ future plans was not immediately available.
Generally speaking, it is often an alarm signal for stockholders when a CEO leaves the position at short notice and without a reasonable explanation.
Extended Stay America said: “Concurrently with the appointment of Mr. Halkyard, the Company’s current President and CEO, Gerry Lopez, will transition to the role of Senior Advisor until March 18, 2018. Mr. Halkyard will succeed to Mr. Lopez’s positions on the ESA and ESH Boards of Directors on January 1, 2018.”
Extended Stay America further said: “On December 18, 2017, the Board of Directors of each of Extended Stay America, Inc. (“Extended Stay”) and ESH Hospitality, Inc. (“ESH REIT” and, together with Extended Stay, the “Company”) accepted the voluntary resignation of Gerardo Lopez from his position as President and Chief Executive Officer (“CEO”) of each of Extended Stay and ESH REIT, effective January 1, 2018. Mr. Lopez also resigned from his position as a director of each of Extended Stay and ESH REIT, effective January 1, 2018.”
“Did not involve any disagreement”
“Mr. Lopez’s resignations did not involve any disagreement with either of Extended Stay or ESH REIT,” Extended Stay America said.
It is a phrase that may be intended to prevent false rumors. It may also fuel further speculation and raise more questions than it answers. Such a phrase should be read very carefully. The exact wording may be insightful.
Share price decline
The change follows a decline in the share price of Extended Stay America, Inc. since November 2017.
Chaired by Douglas G. Geoga
Extended Stay America, Inc. is chaired by Douglas G. Geoga.
Douglas G. Geoga has served as Chairman of the board of directors of the Corporation since July 2013 and as Chairman of the Board of ESH REIT since November 2013.
In the position of CEO since 2015
Gerardo I. Lopez has been the Chief Executive Officer and President of Extended Stay America, Inc. since August 24, 2015.
Lopez has been the Chief Executive Officer and President at ESH Hospitality, Inc. since August 24, 2015.
From March 2009 to August 2015, Lopez was the President and Chief Executive Officer and a director of AMC Entertainment.
Prior to joining AMC Entertainment, he served as Executive Vice President of Starbucks Coffee Company and President of its Global Consumer Products, Seattle’s Best Coffee and Foodservice divisions from September 2004 to March 2009.
From November 2001 to September 2004, Lopez served as President of the Handleman Entertainment Resources division of Handleman Company, a former music distribution company.
Lopez has also held a variety of executive management positions with International Home Foods, Frito Lay, Pepsi-Cola and the Procter & Gamble Company.
Lopez currently serves on the boards of directors of Brinker International, Inc. and CBRE Group, Inc.
Lopez has agreed to continue his employment with the Company in the role of senior advisor to the Company until March 18, 2018 in order to ensure a smooth transition.
At the time of his appointment as Chief Executive Officer at Extended Stay America, Lopez said: “Strategically transforming companies and brands is what I love to do. And we do it by building teams, focusing on the guest experience, innovating, redefining the business model and finding growth. There are a lot of parallels between my prior position and the one at Extended Stay America, and I am thrilled to lead an organization with so much potential.”
Push-out Score suggests push-out forces
It is not completely certain what forces eventually triggered Gerry Lopez’ imminent move.
The Push-out Score™ determined by exechange suggests that push-out forces may have contributed to the management change.
Read the full story in the exechange report 52.2017 ($).