- After almost nine years in the position
- Carrie Wheeler taking over
- Wu will transition to President, Marketplace at Opendoor
- Wu said 72 words
(exechange) — San Francisco, California, December 1, 2022 — Eric Wu, chief executive of Opendoor, leaves his position. As announced by Opendoor Technologies Inc. in a news release and in a regulatory filing published on Thursday, December 1, 2022, Eric Wu leaves his post as chief executive officer at the e-commerce platform for residential real estate transactions, after almost nine years in the role, effective immediately.
The average tenure of CEOs who announced their departure over the past 12 months was 8.2 years. This is according to data collected by CEO-exit research firm exechange.
exechange tracks CEO departures at the 3,000 largest publicly traded companies in the U.S., examines the reasons CEOs leave and determines the Push‑out Score™, a measure of pressure on departing chief executives on a scale of 0 to 10.
Eric Wu’s duties as CEO will be taken over by Carrie Wheeler, most recently Chief Financial Officer at Opendoor Technologies Inc.
Christy Schwartz, who has served as Chief Accounting Officer since March 2021, has been named Interim Chief Financial Officer. The Company has initiated a search for a permanent CFO.
Eric Wu’s move coincides with a management shake-up also involving the position of President.
“Focus on both financial and operational excellence”
The management change is explained as follows. John Rice, Opendoor Board Lead Independent Director, said: “These leadership changes enable Opendoor to focus on both financial and operational excellence while continuing to innovate and lead disruptive change for the real estate industry.”
The three most common reasons given for CEO departures over the past 12 months are performance issues (24.6% of cases), reference to a planned succession (17.2%) and the statement that now was the right time for a change (8.9%), according to exechange data. Other reasons given for CEO departures included pursuit of other opportunities (6.5% of cases), personal reasons (3.4%) and conduct issues (2.5%). Rather rarely mentioned departure reasons are health problems (2.5% of cases), career change (2.2%), time with family (0.9%), disagreement (0.6%) and death (0.6%). Sometimes, more than one reason was given. In 30.2% of cases, no reason was given.
Wu will transition to President, Marketplace at Opendoor
Opendoor stated: “Opendoor Technologies Inc. (“Opendoor”) (Nasdaq: OPEN), a leading e-commerce platform for residential real estate transactions, today announced changes to the executive leadership team and Board of Directors, including the appointment of Chief Financial Officer Carrie Wheeler as Chief Executive Officer and the transition of Eric Wu to a new role as President, Marketplace, effective immediately. ”
Opendoor said: “On December 1, 2022, Opendoor Technologies Inc. (the “Company”) appointed Carrie Wheeler as the Chief Executive Officer of the Company effective as of December 1, 2022 replacing Eric Wu who resigned from his position as the Chief Executive Officer to be appointed as the Company’s President, Marketplace effective as of December 1, 2022.”
Generally, resignations are seen as formally voluntary departures. Still, CEOs may also be pressured to resign. In fact, 76% of the time “resign” was used in corporate announcements, the CEO departure was associated with above-average pressure, exechange data shows.
Share price decline since December 2021
The announcement follows a decline in Opendoor Technologies Inc.’s share price of 87% since December 2021.
In the position of CEO since 2014
Eric Wu became CEO of the Company in 2014.
Eric Wu co-founded Opendoor and has served as the Company’s Chief Executive Officer and as Chairman of the Company’s board of directors since December 2020.
Wu also served as Opendoor Labs Inc.’s Chief Executive Officer and as a member of Opendoor Labs Inc.’s board of directors from April 2014 to December 2020.
Prior to Opendoor Labs Inc., Wu founded and served as the Chief Executive Officer of Movity.com, a geo-data analytics company acquired by Trulia in 2011.
Wu previously co-founded RentAdvisor.com, an apartment search company specializing in lead generation, which was later acquired by Apartment List.
Wu holds a B.S. in Economics from University of Arizona.
72 words by Eric Wu
Eric Wu said 72 words in the official leadership-change announcement.
“A critical piece of Opendoor’s future”
Eric Wu stated: “Over several years, I built conviction that our third-party marketplace is what homebuyers and sellers need, will fundamentally change how all homes are transacted and is a critical piece of Opendoor’s future. Thus, I’ve made the decision to focus my time and energy on building and delivering on this vision. More importantly, I know firsthand that Carrie’s depth of experience and leadership will be foundational to our success in this next chapter.”
Over the past 12 months, 26% of all outgoing CEOs remained silent in the departure announcement, according to data compiled by exechange. Departing CEOs who did make a statement said an average of 111 words. The longest statement was 382 words, and the shortest statement was 23 words. Statistically, management changes are associated with high pressure when outgoing CEOs provide conspicuously short, excessively long or no explanations of their move, according to exechange data. In contrast, leadership transitions are statistically associated with low pressure when departing CEOs speak more about their successors than their successes.
31% of CEOs are forced out or fired
When CEO departures are announced, exechange determines the Push-out Score on a scale of 0 to 10 to assess how likely it is that the chief executive was pushed out or felt pressure to leave the position.
Of the 325 CEO departures in the Russell 3000 Index evaluated over the past 12 months (December 1, 2021, to November 30, 2022), the average Push-out Score was 5.5, according to exechange data. References to conduct issues, disagreements and irregularities lead to the highest Push-out Scores. When time with family, performance issues or personal reasons were cited as departure reasons, the average Push-out Scores were also significantly elevated.
Around 31% of the CEO departure events from the past 12 months received Push-out Scores of 8 or higher.
In other words, in the past 12 months, three in 10 departing CEOs were forced out, fired or stepped down under extreme pressure.
Pressure in the real estate sector drastically below average
Some industries are under generally higher pressure than others, and CEOs are feeling the strain. In the past 12 months, the communication, consumer staples and health care sectors showed the highest average Push-out Scores. By contrast, pressure on CEOs was lowest in the real estate, industrials and financials sectors, as measured by average Push-out Scores.
In the real estate sector, which includes Opendoor Technologies Inc., the average Push-out Score over the past 12 months was 3.2, which is drastically below the average.
Nevertheless, even in this sector, some CEOs were compelled to leave their posts under what appeared to be severe stress. In the real estate sector, two exiting CEOs received Push-out Scores of 8 or higher over the past 12 months, indicating that they were forced out or stepped down under extreme pressure.
Push-out Score for Eric Wu’s move determined
The Push-out Score regarding Eric Wu’s move is explained point by point in the exechange report.
exechange reached out to Opendoor and offered the company the opportunity to comment on the score.
Read the full story in the exechange report 49.2022 ($).