Drive Shack CEO Sarah Watterson leaves at short notice

  • Push-out Score suggests push-out forces
  • After about two years in the position
  • Ken May taking over

(exechange) — New York, November 8, 2018 — Sarah Watterson, chief executive of Drive Shack, leaves. It is a change at short notice. As announced by Drive Shack Inc. in a news release and in a regulatory filing published on Thursday, November 8, 2018, Sarah L. Watterson leaves her post as Chief Executive Officer at the public golf courses company after about two years in the role, effective November 12, 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 12 months was 9.2 years, according to data compiled by exechange. Only 20 percent of the CEOs who departed over the past 12 months left the position within three years.

Sarah Watterson’s duties will be taken over by Kenneth A. (Ken) May, most recently Executive Chairman of Urban Air Adventure Parks.

It is a reverse generational change. Ken May is about 27 years older than Sarah Watterson.

The fact that Sarah Watterson’s successor is brought in from outside suggests that the board may seek to stimulate change with fresh ideas and new initiatives.

In general, an outsider does not have the constraints of an insider when it comes to leading painful changes or making unpopular decisions.

Sarah Watterson’s move is part of a management shake-up also involving the position of Chief Financial Officer.

“To further drive the growth of the business”

A reason for Sarah Watterson’s imminent departure from the CEO post was not explicitly given. Drive Shack said: “As Drive Shack Inc. … continues to transform into a leading golf and entertainment company, the Board of Directors is excited to announce the addition of Ken May and David Hammarley to the management team to further drive the growth of the business.”

Precise information about Sarah Watterson’s future plans was not immediately available.

“Departed”

Drive Shack said: “Effective as of the Effective Date [November 12, 2018], Ms. Watterson departed as the Company’s Chief Executive Officer and President and was appointed as a member of the Board.”

Sarah Watterson will join the Board of Directors of the Company.

Share price decline

The change follows a decline in the share price of Drive Shack Inc. since June 2018.

Chaired by Wes Edens

Drive Shack Inc. is chaired by Wes Edens.

Edens has been Chairman of the Company’s Board of Directors since inception. He also served as the Company’s Chief Executive Officer from inception until February 2007.

In the position of CEO since 2016

Sarah L. Watterson has been the Chief Executive Officer and President at Drive Shack Inc. since September 26, 2016.

Through January 1, 2018, Watterson was also a Managing Director in the Private Equity group of Fortress.

During her time at Fortress, Watterson gained significant experience in the leisure and entertainment sectors, working across businesses such as Intrawest Resorts and the Milwaukee Bucks.

Prior to joining Fortress in 2011, Watterson worked at Goldman Sachs where she was a member of the global securities team.

Watterson graduated Summa Cum Laude from Cornell University with a Bachelor of Science in Applied Economics and Management.

Push-out Score suggests push-out forces

It is not completely certain what forces eventually triggered Sarah Watterson’s imminent 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 46.2018 ($).