- After 27 years in the position
- Praise and thanks for Ross
- Ryan McMonagle taking over
- Ross said 66 words
(exechange) — Kansas City, Missouri, December 7, 2022 — Fred Ross, chief executive of Custom Truck, leaves his position. As announced by Custom Truck One Source Inc. in a news release and in a regulatory filing published on Wednesday, December 7, 2022, Fred Ross leaves his post as chief executive officer at the provider of specialized truck and heavy equipment services, after 27 years in the role, effective March 20, 2023.
It is the end of an era.
The average tenure of CEOs who announced their departure over the past 12 months was 8.1 years. Around 6% of CEOs left their posts after more than 20 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.
Fred Ross’s duties as CEO will be taken over by Ryan McMonagle, currently President and Chief Operating Officer at Custom Truck One Source Inc.
It is a generational change. Ryan McMonagle is about 20 years younger than Fred Ross.
“Leverages the strengths of the entire executive team”
Custom Truck did not give an explicit reason for Fred Ross’s departure from the CEO post. Marshall Heinberg, Chairman of the Company’ Board of Directors, said: “The leadership transition plan that the Board has put in place leverages the strengths of the entire executive team and assures that the strategic vision of the Company will move forward unabated.”
The top three reasons cited in corporate announcements for CEO departures over the past 12 months were performance issues (25.5% of cases), implementation of a planned succession (16.6%) and the statement that the time was right for a change (8.6%), 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 30.2% of cases, no reason was given.
Precise information regarding Fred Ross’s future plans was not immediately available.
Custom Truck said: “Mr. McMonagle succeeds Fred Ross, the Company’s Chief Executive Officer, who notified the Board on December 7, 2022 that he would be retiring as Chief Executive Officer, effective March 20, 2023.”
Generally, retirements are seen as formally voluntary departures. Still, CEOs may also be pressured to accelerate their retirement plans. In fact, 32% of the time “retire” was used in the past 12 months, the CEO departure received a Push-out Score above the critical threshold of 5, indicating elevated pressure.
Share price increase since December 2019
The announcement follows an increase in Custom Truck One Source Inc.’s share price of 125% since December 2019.
In the position of CEO since 1996
Fred Ross became CEO of the Company in 1996.
As part of the Board’s succession plan, Ross is expected to continue his employment with the Company as Founder and will continue to serve as a member of the Company’s Board of Directors.
In his role as Founder, Ross will assist with the transition of leadership to McMonagle and continue to work on special projects.
Ross founded Custom Truck & Equipment, LLC (“CTE”), the predecessor to Custom Truck, in 1996 and was actively involved in all aspects of the specialty equipment business, including the entry into new markets and product categories, growing CTE to become one of the leading specialty equipment sales and rental companies.
Ross was the Chief Executive Officer of CTE until affiliates of Blackstone purchased a majority interest in CTE in February 2015, along with several other entities, forming Custom Truck LP.
Ross has served as the Chief Executive Officer of Custom Truck LP and a member of its board of directors since its acquisition by Blackstone.
66 words by Fred Ross
In the news release announcing his departure as CEO of Custom Truck One Source Inc., Fred Ross received praise and thanks.
In the just-released announcement of the leadership change, Fred Ross said 66 words.
“I have worked with Ryan for more than seven years”
Fred Ross stated: “Building Custom Truck One Source into the business that it is today has been one of the greatest accomplishments of my life. Leading our employees and serving our customers is something I have been passionate about my entire career. I have worked with Ryan for more than seven years, and I am confident in his leadership abilities and in the entire team that is in place.”
Over the past 12 months, 27% 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 110 words. The longest statement was 382 words, and the shortest statement was 23 words. Leadership transitions in which departing CEOs provide conspicuously short, excessively long or no explanations for their move are statistically associated with elevated pressure and show an increased incidence of Push-out Scores above the critical threshold of 5. In contrast, leadership changes are statistically associated with low pressure when departing CEOs speak more about their successors than their successes.
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 325 CEO departures in the Russell 3000 Index evaluated over the past 12 months (December 7, 2021, to December 6, 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 industrials sector substantially below 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 industrials sector, which includes Custom Truck One Source Inc., the average Push-out Score over the past 12 months was 4.2, which is substantially below the critical threshold of 5.
Nevertheless, even in this sector, some CEOs were compelled to leave their posts under what appeared to be severe stress. In the industrials sector, 10 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 strong pressure to step down.
Push-out Score for Fred Ross’s move determined
The Push-out Score regarding Fred Ross’s move is explained point by point in the exechange report.
exechange reached out to Custom Truck and offered the company the opportunity to comment on the score.
Read the full story in the exechange report 50.2022 ($).