- Push-out Score suggests push-out forces
- After less than one year in the position
- Praise, thanks and good wishes for Eulau
- Michael Clarke taking over
(exechange) — San Jose, California, August 31, 2018 — Bob Eulau, chief executive of Sanmina, leaves. As announced by Sanmina Corporation in a news release on Friday, August 31, 2018, Robert K. (Bob) Eulau leaves his post as Chief Executive Officer at the electronics manufacturing services company after less than one year in the role.
No company wants a CEO to flame out in the first year.
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 9.3 years, according to data compiled by exechange. Only 4 percent of the CEOs who departed over the past 12 months left the position within their first year. Around 11 percent left the position within two years, and 21 percent left the position within three years.
The exact date of Eulau’s departure was not specified in the announcement. Obviously, it was an abrupt change.
Sanmina said: “In the interim, Jure Sola will lead the Company as Executive Chairman.”
Sanmina has already removed the name of Eulau as Chief Executive Officer from the leadership page and lists Jure Sola as Chief Executive Officer.
Eulau’s duties will be taken over by Michael J. Clarke, a former Chief Executive Officer of Nortek, Inc., effective October 1, 2018.
Already a director
Clarke is already a director of Sanmina. 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, Clarke understands the expectations and dynamics of the board and has knowledge of Sanmina’s organization, risk-management practices and strategy.
No reason given
In the announcement, Sanmina did not explicitly explain the reason for Eulau’s move, leaving room for speculation.
Precise information about Eulau’s future plans was not immediately available.
Generally speaking, it is often an alarm signal for stockholders when a CEO leaves the post with no date given and without comprehensible reasons being given.
Sanmina said: “Sanmina Corporation … today announced that Bob Eulau its Chief Executive Officer resigned from the Company.”
Share price decline
The change follows a decline in the share price of Sanmina Corporation since July 2017.
In the position of CEO since 2017
Robert K. Eulau has served as the Chief Executive Officer and a director of Sanmina Corporation since October 2017.
Prior to that time, he served as Sanmina’s Executive Vice President and Chief Financial Officer from September 2009 until October 2017.
Prior to joining Sanmina, Eulau was the Executive Vice President, Chief Operating Officer and Chief Financial Officer of privately-owned Alien Technology Corporation, a developer of radio frequency identification products, from March 2006 to June 2008.
Previously, he was Senior Vice President and Chief Financial Officer of publicly-traded Rambus Inc., a technology licensing company, from May 2001 to March 2006.
Prior to Rambus, Eulau served over 15 years with Hewlett Packard Company in various leadership roles, including Vice President and Chief Financial Officer of HP’s Business Customer Organization, and Vice President and Chief Financial Officer of HP’s Computing Products business.
At the time of Eulau’s appointment as Chief Executive Officer at Sanmina, Jure Sola, then Chairman and Chief Executive Officer, had stated: “Bob and I have collaborated for the last eight years and he has been instrumental in the successful transformation of Sanmina, making this a perfect time for him to become Sanmina’s next Chief Executive Officer. Bob has a deep understanding of Sanmina’s strategy, customer focus, technology offerings and day-to-day execution. I am confident we’ve selected a strong leader. Bob’s wealth of experience and strong leadership are invaluable to the strategic direction of Sanmina and are precisely what Sanminaneeds for a successful future.”
At the time of Eulau’s appointment as Chief Executive Officer at Sanmina, Wayne Shortridge, then Lead Independent Director of Sanmina’s Board, had said: “I’ve had the opportunity to interact with Bob over the last eight years and he has demonstrated the business acumen for the position. I am confident he is ready to lead Sanmina. As part of our ongoing succession planning, Jure and the Board have been actively engaged with Bob in preparation for this transition and we are excited to have Bob become the second Chief Executive Officer in the history of Sanmina.”
Push-out Score suggests push-out forces
It is not completely certain what forces eventually triggered Bob Eulau’s move.
The Push-out Score™ determined by exechange suggests that push-out forces may have contributed to the change.
Read the full story in the exechange report 36.2018 ($).