With a Push-out Score of 9, the CEO departure at PG&E Corp. is in the upper range of the scale and appears rough.
As announced on January 14, 2019, Geisha J. Williams stepped down from her post as CEO at the utility.
While the announcement does not explicitly state that she was fired, all the criteria of the analysis model suggest that she had to leave under tremendous pressure.
Williams’s duties were taken over in the interim by John R. Simon, most recently executive vice president and general counsel of PG&E.
The fact that a permanent successor is not immediately available constitutes the first point for the Push-out Score.
Williams leaves in difficult times. Point number 2.
On January 14, PG&E also said it is preparing to file for Chapter 11 bankruptcy protection as it faces liabilities linked to wildfires in California.
A reason for Williams’s departure from the CEO post was not explicitly provided. Point number 3.
The management change announcement follows a decline in PG&E’s share price of 74 percent since October 2017. Point number 4.
Williams’s short tenure as CEO (one year and 10 months), the fact that she leaves her post effective immediately and her low age of 57 years make for points number 5, 6 and 7.
The form and language of the announcement provide points 8 and 9.
In the announcement from the San Francisco, California-based PG&E, Williams receives praise and thanks, but no accolades for concrete and quantified successes, no word of regret and no good wishes.
Richard C. Kelly, chair of the board of PG&E, did not say many words regarding Williams: “On behalf of the board, I want to thank Geisha for her service and her tireless commitment to our employees and the 16 million Californians we serve.”
Simon, her successor, addresses the problems directly. He states: “While the board conducts its CEO search, our priority will be keeping the company focused on further improving safety.”
Williams is entitled to receive severance benefits.
Conclusion: Succession issues, challenging circumstances, non-transparent reason, poor share price development, short tenure, short notice period, low age, formal anomalies and linguistic peculiarities in the announcement are nine red flags.
PG&E did not respond to a message seeking comment.
On January 29, PG&E filed for Chapter 11 protection. It was the biggest utility bankruptcy in U.S. history.