- After less than one year in the position
- Brian Mariotti taking over
- Perlmutter will transition to President at Funko
(exechange) — Everett, Washington, December 5, 2022 — Andrew Perlmutter, chief executive of Funko, leaves his position. As announced by Funko Inc. in a news release on Monday, December 5, 2022, Andrew Perlmutter leaves his post as chief executive officer at the toymaker, after less than one year in the role, effective immediately.
The average tenure of CEOs who announced their departure over the past 12 months was 8.2 years. Around 5% of CEOs left their posts within their first year. 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.
Andrew Perlmutter’s duties as CEO will be taken over by Brian Mariotti, a former Chief Executive Officer at Funko Inc.
Andrew Perlmutter’s move coincides with a management shake-up also involving the positions of Chief Financial Officer; and Chief Operating Officer.
“To strengthen the Company’s operations”
The management change is explained as follows. Funko said: “Funko, Inc. (“Funko” or “the Company”) (Nasdaq: FNKO), a leading pop culture lifestyle brand, today announced a series of leadership changes to strengthen the Company’s operations, drive enhanced returns for stockholders and best position Funko to capture the significant opportunities ahead.”
The top three reasons cited in corporate announcements for CEO departures over the past 12 months were performance issues (24.8% of cases), implementation of a planned succession (17%) and the statement that the time was right for a change (8.7%), according to exechange data. Other motives given for CEO exits included the outgoing CEO’s wish to pursue other opportunities (6.5% of cases), personal reasons (3.4%) and conduct issues (2.5%). Rather rarely stated reasons were health problems (2.5% of cases), career change (2.2%), the desire for more time with family (0.9%), disagreement (0.6%) and death (0.6%). Sometimes, more than one reason was given. In 30.3% of cases, no reason was given.
Perlmutter will transition to President at Funko
Funko stated: “Mr. Mariotti succeeds Andrew Perlmutter, who is stepping down as CEO and will become President, effective immediately.”
Funko said that Andrew Perlmutter “is stepping down as CEO.”
Companies often provide less precise information in their corporate announcements than in regulatory filings, which are sometimes published with a considerable delay and therefore cannot always be included in the exechange analysis. In the present case, a regulatory filing regarding Andrew Perlmutter’s move was not available at the time of the analysis.
“Not related to any issues”
Funko stated, regarding the change: “The Company noted that the announced leadership transitions are not related to any issues with respect to the integrity of the Company’s financial statements or accounting policies and practices.”
Share price decline since January 2022
The announcement follows a decline in Funko Inc.’s share price of 45% since January 2022. January 2022 is the month in which Perlmutter’s tenure as CEO began.
In the position of CEO since 2022
Andrew Perlmutter became CEO of the Company in 2022.
As President, Perlmutter will focus primarily on growing the Company’s brands and will remain on the Board of Directors.
Mariotti has a mandate from the Board to identify operational improvements while continuing to drive profitable growth.
Andrew Perlmutter has served as Funko, Inc.’s Chief Executive Officer and as a member of the Funko, Inc. Board of Directors since January 2022.
Previously, Perlmutter served as the President of Funko, Inc. and FAH, LLC from October 2017 to January 2022.
Perlmutter was the Senior Vice President of Sales of FAH, LLC from June 2013 until October 2017.
Prior to joining FAH, LLC, he was a co-founder of Bottle Rocket Collective, a board and travel games company, where he oversaw product manufacturing and sales from December 2012 until December 2013.
Prior to his time at Bottle Rocket Collective, he was a National Account Manager at The Wilko Group from August 2001 until December 2012, where he managed sales to a variety of major mass-market, specialty and online retailers.
Perlmutter received a B.A. in Interpersonal Communications from Southern Illinois University.
At the time of Andrew Perlmutter’s appointment as Chief Executive Officer at Funko, Brian Mariotti, then Chief Executive Officer, had stated: “We have an amazing set of opportunities in front of us, and there isn’t a better person to lead us than Andrew. His experience and vision will be critical in delivering the next phase of Funko’s growth.”
At the time of his appointment as Chief Executive Officer at Funko, Andrew Perlmutter, then President, had stated: “I’m honored to assume the role of CEO in January, while maintaining the longstanding and fruitful partnership Brian and I have enjoyed for many years. With the transition, we plan to continue to pursue a four-pillar approach that focuses on leveraging our core Pop! platform; driving additional revenue streams through product diversification; accelerating growth in our direct-to-consumer channel; and expanding our international business.”
No statement by Andrew Perlmutter
The just-released announcement of the leadership change does not include a statement by Andrew Perlmutter.
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. Leadership transitions in which departing CEOs provide conspicuously short or no explanations for their move are statistically associated with increased pressure and more often show Push-out Scores above the critical threshold of 5, according to exechange data.
32% 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, with 0 being most likely a voluntary move and 10 being most likely a forced exit. Anything over a 5 indicates that there are valid reasons to believe an executive may have been pushed out.
Of the 323 CEO departures in the Russell 3000 Index evaluated over the past 12 months (December 5, 2021, to December 4, 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 32% 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 or fired.
Pressure in the consumer discretionary sector well above critical threshold
Some industries are under generally higher pressure than others, and CEOs are feeling the strain. In the past 12 months, the communication, health care and consumer staples 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 consumer discretionary sector, which includes Funko Inc., the average Push-out Score over the past 12 months was 6.1, which is well above the critical threshold of 5.
In the consumer discretionary sector, 21 exiting CEOs received Push-out Scores of 8 or higher over the past 12 months, indicating that they were most likely forced out or faced extreme pressure to step down.
Push-out Score for Andrew Perlmutter’s move determined
The Push-out Score regarding Andrew Perlmutter’s move is explained point by point in the exechange report.
exechange reached out to Funko and offered the company the opportunity to comment on the score.
Read the full story in the exechange report 50.2022 ($).