- After about five years in the position
- Thanks for Jacobs
- Jeff Dayno taking over temporarily
(exechange) — Plymouth Meeting, Pennsylvania, January 6, 2023 — John Jacobs, chief executive of Harmony, leaves his position. As announced by Harmony Biosciences Holdings Inc. in a news release and in a regulatory filing published on Friday, January 6, 2023, John C. Jacobs leaves his post as chief executive officer at the pharmaceutical company, after about five 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.
John Jacobs’s duties as CEO will be taken over temporarily by Jeffrey M. (Jeff) Dayno, most recently Executive Vice President and Chief Medical Officer at Harmony Biosciences Holdings Inc., as interim Chief Executive Officer.
“To pursue another opportunity”
John Jacobs’s departure from the CEO post is explained as follows. Harmony said: “John Jacobs is stepping down as president and chief executive officer and a member of the Board of Directors to pursue another opportunity.”
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 John Jacobs’s future plans was not immediately available.
“Stepping down/resigning”
Harmony said: “John Jacobs is stepping down as president and chief executive officer and a member of the Board of Directors.”
Harmony further said: “John C. Jacobs is resigning as President and Chief Executive Officer of the Company. In connection with his departure, Mr. Jacobs is also resigning from the Board of Directors of the Company.”
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 CEO departure announcements over the past 12 months, the departing chief executive received a Push-out Score above the critical threshold of 5, indicating elevated pressure.
“Not due to any disagreement”
Harmony stated, regarding the change: “Mr. Jacobs’ resignation as President and Chief Executive Officer and as a member of the Board was not due to any disagreement with the Company on any matter relating to the Company’s operations, policies or practices. Mr. Jacobs’ last day with the Company will be January 20, 2023.”
Share price increase since January 2022
The announcement follows an increase in Harmony Biosciences Holdings Inc.’s share price of 20% since January 2022.
In the position of CEO since 2018
John Jacobs became CEO of the Company in 2018.
Jacobs has served as the Company’s President and Chief Executive Officer and on the Company’s board of directors since June 2018.
Previously, Jacobs served as the Company’s Executive Vice President and Chief Commercial Officer from October 2017 to June 2018.
Prior to joining the Company, Jacobs served as the Senior Vice President and General Manager of the Respiratory Business Unit of Teva Pharmaceuticals Industries Ltd., or Teva, a public pharmaceutical company, from September 2017 to October 2017.
He also served as Senior Vice President of Commercial Operations and Innovation of Teva, from September 2016 to September 2017, and as Vice President and General Manager of Teva’s Branded Business in Canada from July 2014 to September 2016.
Jacobs has held positions of increasing scope and responsibility at major pharmaceutical companies including Cephalon Inc., a former public biopharmaceutical and biotechnology company, Wyeth, LLC, a public pharmaceutical company, and Pfizer Inc., a public pharmaceutical and biotechnology company. He has over 25 years of commercial, operations, business and leadership experience across multiple therapeutic areas including central nervous system, sleep disorders, pain care and respiratory, as well as rare disease and other specialty markets.
Jacobs received a B.S. in business from State University of New York College at Plattsburgh and an M.B.A. from The State University of New York at Binghamton.
No statement by John Jacobs
In the news release announcing his departure as CEO of Harmony Biosciences Holdings Inc., John Jacobs received thanks.
The announcement of his departure as CEO does not include a statement by John Jacobs.
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 health care 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, utilities and financials sectors, as measured by average Push-out Scores.
In the health care sector, which includes Harmony Biosciences Holdings Inc., the average Push-out Score over the past 12 months was 6.9, which is well above the critical threshold of 5.
In the health care sector, 26 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 John Jacobs’s move determined
The Push-out Score regarding John Jacobs’s move is explained point by point in the exechange report.
exechange reached out to Harmony and offered the company the opportunity to comment on the score.
Read the full story in the exechange report 2.2023 ($).