- Push-out Score determined
- After less than two years in the position
- Praise for McDonald
- Fritz Henderson taking over in the interim
- Search for a successor
(exechange) — Plymouth, Michigan, June 11, 2018 — Bruce McDonald, chief executive of Adient, leaves. It is an abrupt change. As announced by Adient plc in a news release and in a regulatory filing published on Monday, June 11, 2018, R.Bruce McDonald leaves his post as Chief Executive Officer at the automotive parts manufacturer after less than two years in the role, effective immediately.
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 12 months was 9.5 years, according to data compiled by exechange. Only 10 percent of the CEOs who departed over the past 12 months left the position within two years, and 21 percent left the position within three years.
Adient will undertake a search for a successor.
McDonald’s duties will be taken over in the interim by Frederick A. (Fritz) Henderson, most recently Chief Executive Officer of SunCoke.
Already a director
Henderson is already a director of Adient. Often a board member is a last resort, someone who is turned to in desperation when a company cannot find suitable candidates. On the other hand, directors-turned-executives represent a blend of outsider and insider.
They don’t have the constraints of a pure insider when it comes to leading painful changes or making unpopular decisions, and they have more company knowledge than a pure outsider.
Having been a director, Henderson understands the expectations and dynamics of the board and has knowledge of Adient’s organization, risk-management practices and strategy.
“Now is the right time for a new leader with a fresh perspective”
McDonald’s sudden departure from the CEO post is explained as follows. John M. Barth, Adient’s Lead Director, said in a fairly blunt statement: “Bruce and the Board agree that now is the right time for a new leader with a fresh perspective to drive value in the next phase of Adient’s life as a public company.”
Precise information about McDonald’s future plans was not immediately available.
“Stepping down/will no longer serve”
Adient said: “Henderson succeeds R. Bruce McDonald, who is stepping down from his role as Chairman and CEO effective immediately, and will remain as an advisor to the CEO until September 30, 2018.”
Adient further said: “R.Bruce McDonald, Adient’s former Chairman and Chief Executive Officer, resigned from the Board and will no longer serve as Chief Executive Officer or an executive officer of Adient effective June 11, 2018.”
“Not the result of any disagreement”
“Mr. McDonald’s resignation from the Board was not the result of any disagreement with Adient or any matter relating to Adient’s operations, policies or procedures,” Adient 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 sharp decline in the share price of Adient plc since January 2018.
In the position of CEO since 2016
Bruce McDonald has been Chairman and Chief Executive Officer of Adient plc since October 31, 2016.
McDonald has served as the company’s Chairman and CEO since its separation from Johnson Controls in 2016.
McDonald was Executive Vice President, Vice Chairman of Johnson Controls, Inc. from 2014 to October 2016.
He was Chief Financial Officer of Johnson Controls from 2005 to 2014 and Executive Vice President since 2006.
McDonald joined Johnson Controls in 2001 as Vice President, Corporate Controller.
Prior to joining Johnson Controls, McDonald held a variety of operational and financial positions at TRW, LucasVarity Automotive and Varity Corporation.
McDonald is a Chartered Accountant and a Certified Public Accountant.
McDonald has served on the board of Dana Incorporated since 2014, where he serves as chair of the Audit Committee and a member of the Compensation Committee.
Push-out Score determined
The Push-out Score™ determined by exechange suggests that push-out forces have contributed to the change.
Read the full story in the exechange report 25.2018 ($).