Double-edged departure: Gannett CEO Bob Dickey retires

With a Push-out Score of 6, the CEO departure at Gannett Co. is in the upper range of the scale and seems double-edged.

As announced on December 5, 2018, Robert J. (Bob) Dickey “has informed the company’s board of directors of his intention to retire” from the media company. He has agreed to stay on until May 7, 2019, or, if earlier, until a successor is named.

At 61 years, Dickey is at the normal retirement age. The lead time of up to 153 days is acceptable. His tenure of three years and 10 months (as at May 7, 2019) is still appropriate, and in the announcement from the McLean, Virginia-based Gannett, Dickey receives praise and thanks.

At the same time, six of nine warning lamps light up.

A successor for the CEO position has yet to be found. That’s the first point for the Push-out Score.

The announcement follows a decline in Gannett’s share price of 40 percent since April 2016. The shares have decreased 11 percent since the beginning of the year, while the Standard & Poor’s 500 index has climbed 5 percent. Point number 2.

A reason for Dickey’s planned departure from the CEO post is not explicitly provided. Point number 3.

The circumstances of the change are challenging. Point number 4.

Similar to other newspaper publishers, Gannett faces the challenge of finding new sources of revenue.

On November 8, Gannett reported third-quarter results that missed profit and revenue expectations.

The form and language of the announcement provide points number 5 and 6.

In the announcement, the departing chief executive receives no accolades for concrete and quantified successes, no word of regret and no good wishes.

Dickey makes a lengthy statement (183 words) and apparently considers it necessary to highlight concrete and quantified successes during his tenure himself. He says: “In October, for example, the USA Today Network reached more than 129 million unique visitors with over 40 percent between the ages of 21-44, positioning us as a leader across all age groups, while on the digital marketing side our client base and average revenue per client continue to grow.”

The statement of Chairman J.Jeffry Louis sounds a little less euphoric. While acknowledging that Dickey has positioned Gannett “at the forefront of the digital transformation through key acquisitions such as ReachLocal, SweetIQ and WordStream,” he concludes: “We thank Bob for his 29 years of service to Gannett and are grateful for his continuing leadership in creating value for our customers and shareholders as we work to select his successor.”

At the same time, Dickey states: “While the board undertakes its duty to plan for the future, I will continue working hard.” That does not sound like he is excessively happy to leave office soon. Precise information regarding his future plans was not immediately available.

Conclusion: Succession issues, poor share price development, non-transparent reason, critical time, formal anomalies and linguistic peculiarities in the announcement are six red flags.

There are thus several indications that he is leaving the post under pressure.