- After about six years in the position
- Praise and thanks for Vlahos
- Carla Vernón taking over
- Vlahos said 107 words
(exechange) — Los Angeles, California, December 13, 2022 — Nick Vlahos, chief executive of Honest Co., leaves his position. As announced by Honest Co. in a news release and in a regulatory filing published on Tuesday, December 13, 2022, Nikolaos (Nick) Vlahos leaves his post as chief executive officer at the personal-care company, after about six years in the role, effective January 9, 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.
Nick Vlahos’s duties as CEO will be taken over by Carla Vernón, most recently Vice President of Consumables Categories at Amazon.com, Inc.
The fact that Nick Vlahos’s successor is brought in from outside suggests that the board may seek to stimulate change with fresh ideas and new initiatives.
In general, an outsider does not have the constraints of an insider when it comes to leading painful changes or making unpopular decisions.
“Driving profitability”
Honest Co. did not give an explicit reason for Nick Vlahos’s departure from the CEO post. Honest Co. said: “As CEO, Vernón will be laser-focused on category growth and driving profitability behind the company’s core mission of inspiring everyone to love living consciously. The move is part of a strategic leadership succession plan, as current CEO Nick Vlahos will step down from day-to-day operations after a near six-year tenure and remain on the Board of Directors at Honest.”
The top three reasons cited in corporate announcements for CEO departures over the past 12 months are performance issues (26.2% of cases), implementation of a planned succession (16.5%) and the statement that the time was right for a change (8.5%), according to exechange data. Other motives given for leadership changes included the outgoing CEO’s wish to pursue other opportunities (6.7% of cases), personal reasons (3%) and conduct issues (2.4%). Rather rarely stated reasons are health problems (2.1% of cases), career change (2.1%), 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 Nick Vlahos’s future plans was not immediately available.
“Step down/leave his current role”
Honest Co. said: “[C]urrent CEO Nick Vlahos will step down from day-to-day operations.”
Honest Co. further said: “Nick Vlahos will leave his current role as Chief Executive Officer of the Company on the Effective Date.”
Share price decline since December 2021
The announcement follows a decline in Honest Co.’s share price of 67% since December 2021.
In the position of CEO since 2017
Nick Vlahos became CEO of the Company in 2017.
Nikolaos Vlahos has served as the Company’s Chief Executive Officer and as a member of the Company’s Board since March 2017.
Prior to joining the Company, from September 2014 to March 2017, Vlahos served as Executive Vice President and Chief Operating Officer – Household, Lifestyle and Core Global Functions of The Clorox Company, a global manufacturer of consumer products, where he was responsible for the Charcoal, Glad, Cat Litter, Food, Brita and Burt’s Bees business operating units as well as the company’s Marketing, Sales, Product Supply and Research and Development functions.
Vlahos initially joined The Clorox Company in 1995 as a Chicago regional sales manager and held numerous roles within The Clorox Company’s sales and marketing organization before serving as Vice President – General Manager, Burt’s Bees from April 2011 to February 2013 and Vice President – General Manager, Laundry, Brita and Green Works from March 2009 to February 2011.
Before joining The Clorox Company, Vlahos worked at Helene Curtis where he assisted in the development of brands such as Degree and Suave.
Vlahos holds a B.A. degree in telecommunications from Indiana University.
107 words by Nick Vlahos
In the news release announcing his departure as CEO of Honest Co., Nick Vlahos received praise and thanks.
In the announcement of the leadership change, Nick Vlahos said 107 words.
“Now is the perfect time”
Nick Vlahos stated: “Over the last two years, I have been fortunate to partner with Carla to drive our Honest Lifestyle Platform at Amazon and it is clear that she understands how to engage the conscious-minded shopper and their desire for clean and natural products. With the recent distribution expansion that has delivered record-high retail sales and a strong management team in place, now is the perfect time for Honest to transition to its next CEO. I am confident that Carla is the right leader to continue to scale the business as we embark on our next decade as a modern consumer lifestyle brand, inspiring everyone to love living consciously.”
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 328 CEO departures in the Russell 3000 Index evaluated over the past 12 months (December 13, 2021, to December 12, 2022), the average Push-out Score was 5.6, 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 other opportunities 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, industrials and financials sectors, as measured by average Push-out Scores.
In the consumer staples sector, which includes Honest Co., the average Push-out Score over the past 12 months was 6.7, which is well above the critical threshold of 5.
In the consumer staples sector, six 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 Nick Vlahos’s move determined
The Push-out Score regarding Nick Vlahos’s move is explained point by point in the exechange report.
exechange reached out to Honest Co. and offered the company the opportunity to comment on the score.
Read the full story in the exechange report 51.2022 ($).