• Chano Fernandez has stepped down as co-CEO
• Elimination of Dual Chief Executive Officer role is planned
• Carl Eschenbach to become sole Chief Executive Officer
• Bhusri will remain as executive chair at Workday
• Bhusri said 78 words

(exechange) — Pleasanton, California, December 20, 2022 — Aneel Bhusri, co-chief executive of Workday, is set to leave his position. His upcoming departure is made public at an early stage. As announced by Workday Inc. in a news release and in a regulatory filing published on Tuesday, December 20, 2022, Aneel Bhusri leaves his post as co-chief executive officer at the provider of enterprise cloud applications for finance and human resources, after about 10 years in the role, effective January 31, 2024.

Long goodbye

It is a long goodbye. The announcement of Aneel Bhusri’s move comes up to 13 months prior to his planned departure from the post of co-CEO.

In general, a top executive who announces the departure particularly early may be considered a lame duck.

Aneel Bhusri’s move coincides with a management shake-up also involving the position of co-CEO.

Chano Fernandez has stepped down as co-CEO and as a member of the Workday Board of Directors, effective immediately.

Workday announced the appointment of Carl Eschenbach to co-CEO, effective immediately.

Carl Eschenbach will serve as co-CEO alongside Aneel Bhusri, Workday’s co-CEO, co-founder, and chair, through January 2024, Workday’s fiscal year end.

At that time, Aneel and the Board expect that Carl Eschenbach will assume sole CEO responsibilities and Aneel Bhusri will assume a full-time role as executive chair and will remain as chair of the Board of Directors.

“Massive opportunity in front of us”

Workday did not give an explicit reason for Aneel Bhusri’s planned departure from the co-CEO post. Carl Eschenbach, co-CEO, Workday, said: “I’m thrilled to be expanding my role at Workday and working with Aneel, the rest of the leadership team, and our amazing group of employees to help us build on this great momentum and take hold of the massive opportunity in front of us.”

The top three reasons cited in corporate announcements for CEO departures over the past 12 months are performance issues (26.7% of cases), implementation of a planned succession (16.4%) 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 30.1% of cases, no reason was given.

Share price decline since December 2021

The announcement follows a decline in Workday Inc.’s share price of 35% since December 2021.

In the position of CEO since 2014

Aneel Bhusri became CEO of the Company in 2014.

Aneel Bhusri co-founded Workday in 2005 and has served as a Director since then, including as Chairman from 2012 to 2014 and from April 2021 to the present.

He has been the Company’s co-Chief Executive Officer since August 2020 after serving as Chief Executive Officer since 2014.

Bhusri also served as co-Chief Executive Officer from 2009 to 2014 and as President from 2007 to 2009.

From 1993 to 2004, Bhusri held a number of senior management positions with PeopleSoft, Inc., including Vice Chairman of its board of directors from 1999 to 2002.

Bhusri is currently an advisory partner at Greylock Partners, a Silicon Valley venture capital firm that he has been associated with since 1999, and prior to that time worked at Norwest Venture Partners and Morgan Stanley.

He has served as a director of General Motors Company since October 2021 and currently serves as a director of the Workday Foundation.

He served as a director of Intel Corporation from 2014 to November 2019 and of Pure Storage, Inc. from 2010 to February 2018.

78 words by Aneel Bhusri

In the announcement of the leadership change, Aneel Bhusri said 78 words.

“An incredible opportunity in front of us”

Aneel Bhusri stated: “We have an incredible opportunity in front of us and I’m confident that Carl, with his leadership skills and his proven experience in helping technology companies scale, as well as his commitment to culture and values, will help lead Workday through its next phase of growth. Chano has been an integral part of Workday since he joined almost nine years ago and has helped us to achieve great success and growth. We thank him for his many contributions.”

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.

33% 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 329 CEO departures in the Russell 3000 Index evaluated over the past 12 months (December 20, 2021, to December 19, 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 33% 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 information technology 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 information technology sector, which includes Workday 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 information technology sector, 17 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 Aneel Bhusri’s move determined

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

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

Read the full story in the exechange report 52.2022 ($).