- After less than three and a half years in the position
- Thanks and good wishes for Ruffalo
- Jaco van der Merwe taking over
(exechange) — Chattanooga, Tennessee, January 6, 2023 — Barry Ruffalo, chief executive of Astec, leaves his position. As announced by Astec Industries Inc. in a news release on Friday, January 6, 2023, Barry A. Ruffalo leaves his post as chief executive officer at the manufacturer of equipment for asphalt road building, after less than three and a half years in the role, effective immediately.
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.
Barry Ruffalo’s duties as CEO will be taken over by Jaco van der Merwe, most recently Group President – Infrastructure Solutions at Astec Industries Inc.
“Dedicated focus on execution”
Astec did not give an explicit reason for Barry Ruffalo’s departure from the CEO post. Jaco van der Merwe said: “By working together with a dedicated focus on execution, we will create value for our shareholders, customers and employees.”
The top three reasons cited in corporate announcements for CEO departures over the past 12 months are performance issues (26.1% of cases), implementation of a planned succession (16.5%) and the statement that the time was right for a change (8.4%), according to exechange data. Other motives given for leadership changes included the outgoing CEO’s wish to pursue other opportunities (6% 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%), death (0.9%) and disagreement (0.6%). Sometimes, more than one reason was given. In 30.9% of cases, no reason was given.
Precise information regarding Barry Ruffalo’s future plans was not immediately available.
Astec said: “Barry Ruffalo has stepped down as President and Chief Executive Officer and as a member of the Board of Directors, effective immediately.”
Companies often provide less precise information in their corporate announcements than in regulatory filings, which are sometimes published with a considerable delay and therefore cannot always be included in the exechange analysis. In the present case, a regulatory filing regarding Barry Ruffalo’s move was not available at the time of the analysis.
Share price decline since January 2022
The announcement follows a decline in Astec Industries Inc.’s share price of 40% since January 2022.
In the position of CEO since 2019
Barry Ruffalo became CEO of the Company in 2019.
Barry A. Ruffalo has served as President and Chief Executive Officer (“CEO”) of Astec Industries since August 2019.
Prior to joining Astec Industries, he was employed by Valmont Industries, a publicly-traded global producer of highly-engineered fabricated metal products, where he had served from 2015 to 2016 as Executive Vice President, Operational Excellence, from 2016 to 2017 as Group President – Energy & Mining, during 2017 as Group President – North America Structures/Energy/Mining and from 2018 to July 2019 as Group President of Global Engineered Support Structures.
Preceding his career at Valmont Industries, from 2013 to 2015, Ruffalo served terms as President of the Irrigation and of the Infrastructure divisions of Lindsay Corporation, a publicly-traded global leader in proprietary water management and road infrastructure products and services.
Ruffalo has also served on the Board of Directors of Masonite International Corporation (NYSE: DOOR) since July 2021, where he also serves on the Human Resources and Compensation Committee.
In addition, Ruffalo is active in trade association boards.
At the time of Barry Ruffalo’s appointment as Chief Executive Officer at Astec, Bill Gehl, Chairman of Astec, had stated: “After a comprehensive search that included a number of highly qualified candidates, we are excited to hire Mr. Ruffalo. Barry brings a wealth of experience to Astec. He is a leader that has driven change, understands infrastructure and will add tremendous value.”
At the time of Barry Ruffalo’s appointment as Chief Executive Officer at Astec, Ruffalo had stated: “I am excited to join Astec as its CEO and a member of the Board of Directors. I look forward to moving forward with measures to make Astec more profitable and agile while building on the strength of its world-class products.”
No statement by Barry Ruffalo
In the news release announcing his departure as CEO of Astec Industries Inc., Barry Ruffalo received thanks and good wishes.
The announcement of his departure as CEO does not include a statement by Barry Ruffalo.
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 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.
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 333 CEO departures in the Russell 3000 Index evaluated over the past 12 months (January 6, 2022, to January 5, 2023), the average Push-out Score was 5.7, according to exechange data. References to conduct issues, disagreements and irregularities lead to the highest Push-out Scores. When performance issues, time with family 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 industrials sector substantially 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, utilities and financials sectors, as measured by average Push-out Scores.
In the industrials sector, which includes Astec Industries Inc., the average Push-out Score over the past 12 months was 4.5, 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, 11 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 Barry Ruffalo’s move determined
The Push-out Score regarding Barry Ruffalo’s move is explained point by point in the exechange report.
exechange reached out to Astec and offered the company the opportunity to comment on the score.
Read the full story in the exechange report 2.2023 ($).