Valhi CEO Robert Graham leaves post

  • After about six years in the position
  • Michael Simmons taking over
  • Graham will remain as employee at Contran

(exechange) — Dallas, Texas, December 16, 2022 — Robert Graham, chief executive of Valhi, leaves his position. As announced by Valhi Inc. in a regulatory filing published on Friday, December 16, 2022, Robert D. Graham leaves his post as chief executive officer at the holding company, after about six years in the role, effective December 31, 2022.

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.

Robert Graham’s duties as CEO will be taken over by Michael S. Simmons, currently president at Valhi Inc.

No reason given

In the announcement, Valhi did not explicitly explain the reason for the move.

The top three reasons cited in corporate announcements for CEO departures over the past 12 months are performance issues (26.8% 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 (6.4% 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 29.9% of cases, no reason was given.

Graham will remain as employee at Contran

Valhi stated: “In connection with his retirement as a director and officer of the registrant, Mr. Graham also provided notice to the registrant’s affiliates Kronos Worldwide, Inc. (“Kronos Worldwide”), NL Industries, Inc. (“NL”) and CompX International Inc. (“CompX”) that he will retire as an officer and director of those companies as of December 31, 2022. Following such retirements, Mr. Graham will continue to be employed by Contran Corporation (“Contran”), the privately-held parent corporation of the registrant. ”


Valhi said: “On December 12, 2022, Robert D. Graham, vice chairman of the board and chief executive officer of the registrant, provided notice to the registrant of his retirement, effective as of December 31, 2022, as a director, vice chairman of the board and chief executive officer of the registrant.”

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 decline since June 2022

The announcement follows a decline in Valhi Inc.’s share price of 53% since June 2022.

In the position of CEO since 2017

Robert Graham became CEO of the Company in 2017.

Robert D. Graham has served on the Company’s board of directors since 2016, as the Company’s vice chairman of the board and chief executive officer since 2017, and as the Company’s president since 2016.

He previously served as the Company’s chairman of the board during 2017, as the Company’s executive vice president from 2014 to 2016, as the Company’s chief legal officer from 2015 to 2017, and as the Company’s vice president from 2003 to 2014.

No statement by Robert Graham

The announcement of the leadership change does not include a statement by Robert Graham.

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 110 words. The longest statement was 382 words. 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 elevated pressure and show an increased incidence of 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 328 CEO departures in the Russell 3000 Index evaluated over the past 12 months (December 16, 2021, to December 15, 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 materials sector somewhat below 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 materials sector, which includes Valhi Inc., the average Push-out Score over the past 12 months was 4.7, which is somewhat 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 materials sector, four 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 Robert Graham’s move determined

The Push-out Score regarding Robert Graham’s move is explained point by point in the exechange report.

exechange reached out to Valhi and offered the company the opportunity to comment on the score.

Read the full story in the exechange report 51.2022 ($).