- After about four years in the position
- Praise for Bahrambeygui
- Robert Price taking over temporarily
- Bahrambeygui said 69 words
(exechange) — San Diego, California, December 9, 2022 — Sherry Bahrambeygui, chief executive of PriceSmart, leaves her position. As announced by PriceSmart Inc. in a news release and in a regulatory filing published on Friday, December 9, 2022, Sherry S. Bahrambeygui leaves her post as chief executive officer at the operator of membership warehouse clubs, after about four years in the role, effective February 3, 2023.
The average tenure of CEOs who announced their departure over the past 12 months was 8.3 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.
Sherry Bahrambeygui’s duties as CEO will be taken over temporarily by Robert E. Price, currently founder and Chairman of the Board at PriceSmart Inc., as Interim Chief Executive Officer.
Robert Price is about 22 years older than Sherry Bahrambeygui.
Sherry Bahrambeygui’s move coincides with a management shake-up also involving the positions of President; and Chief of Staff to the Interim CEO.
“To pursue new professional and philanthropic interests”
The management change is explained as follows. PriceSmart said: “Sherry Bahrambeygui will be resigning as Chief Executive Officer, effective February 3, 2023, the date of the Company’s annual stockholder meeting, in order to pursue new professional and philanthropic interests.”
The top three reasons cited in corporate announcements for CEO departures over the past 12 months are 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 leadership changes included the outgoing CEO’s wish to pursue other opportunities (6.5% of cases), personal reasons (3.1%) and conduct issues (2.5%). Rather rarely stated reasons are health problems (2.2% 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 30.8% of cases, no reason was given.
Precise information regarding Sherry Bahrambeygui’s future plans was not immediately available.
PriceSmart said: “Sherry Bahrambeygui will be resigning as Chief Executive Officer, effective February 3, 2023.”
Generally, resignations are seen as formally voluntary departures. Still, CEOs may also be pressured to resign. In fact, 77% of the time “resign” 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 decline since December 2019
The announcement follows a decline in PriceSmart Inc.’s share price of 10% since December 2019.
In the position of CEO since 2018
Sherry Bahrambeygui became CEO of the Company in 2018.
As part of the PriceSmart leadership transition plan, Bahrambeygui will continue serving stockholders as a member of the Board of Directors of the Company.
Prior to her tenure as CEO, she served on the Company’s Board as a director for eight years, including having served as Vice Chairman and Chair of the Compensation Committee.
Between now and February 3, Bahrambeygui will continue her employment and will work towards the orderly transition of her responsibilities.
She has agreed to make herself available at the Company’s request for up to 100 hours of transition support during the twelve months following her resignation.
Sherry S. Bahrambeygui has served as Chief Executive Officer since January 2019 and previously served as interim Chief Executive Officer from November 2018 to January 2019.
Bahrambeygui has been a director of the Company since November 2011 and served as Vice Chairman of the Board from October 2016 to October 2017.
Prior to becoming Chief Executive Officer, she served as the President and Managing Member of the Price Group, LLC, an investment management firm from 2007 to 2018.
Before joining the Price Group, Bahrambeygui had a 15-year legal career as a litigator specializing in the health care, life sciences, consumer & retail, and real estate industries.
She was the founding partner of Hosey & Bahrambeygui, LLP, a leading boutique civil litigation practice, from 1999 to 2007.
69 words by Sherry Bahrambeygui
In the news release announcing her departure as CEO of PriceSmart Inc., Sherry Bahrambeygui received praise.
In the announcement of the leadership change, Sherry Bahrambeygui said 69 words.
“My day-to-day role is changing”
Sherry Bahrambeygui stated: “These past four years have been an incredibly challenging and professionally rewarding time. I have been so fortunate to work with an incredible team in the U.S. and in all of our markets that share my dedication to our employees and Members. While my day-to-day role is changing, I will remain connected to our incredible workforce by serving on the Board and helping build on the Company’s record performance.”
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 109 words. The longest statement was 382 words. 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 9, 2021, to December 8, 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 staples sector well above the critical threshold
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, financials and industrials sectors, as measured by average Push-out Scores.
In the consumer staples sector, which includes PriceSmart Inc., the average Push-out Score over the past 12 months was 6.5, which is well above the critical threshold of 5.
In the consumer staples sector, five 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.
Closer look at female CEOs
Female CEOs in the U.S. have been found to be more likely to be pushed out than male CEOs. Over the past 12 months, outgoing female CEOs have received an average Push-out Score of 6.2, substantially above the average Push-out Score of 5.5 for outgoing male CEOs.
Female CEOs have a 29% shorter tenure. Women in the role step down after an average tenure of 6 years, compared with 8.4 years for men, the exechange data shows, which covers 21 departing female CEOs and 304 departing male CEOs.
On a five-year view, departing female CEOs received an average Push-out Score of 5.8, which was significantly higher than the average Push-out Score of 5.3 for departing male CEOs. This suggests that women were more likely to be pushed out than men, even when using a longer observation period. This is evident from exechange data covering 1,403 CEO departures (84 of them women and 1,319 men) from 2017 to 2021. Female CEOs who announced their departure from 2017 to 2021 had a 26% shorter tenure, exiting after an average of 6.6 years, compared with 8.9 years for men, the exechange data shows.
Push-out Score for Sherry Bahrambeygui’s move determined
The Push-out Score regarding Sherry Bahrambeygui’s move is explained point by point in the exechange report.
exechange reached out to PriceSmart and offered the company the opportunity to comment on the score.
Read the full story in the exechange report 50.2022 ($).