- After less than three and a half years in the position
- Praise, thanks and good wishes for Donigan
- Busy Burr taking over temporarily
- Search for a successor
- Donigan kept it short and said 35 words
(exechange) — Philadelphia, Pennsylvania, January 9, 2023 — Heyward Donigan, chief executive of Rite Aid, leaves her position — as “mutually agreed.” As announced by Rite Aid Corp. in a news release and in a regulatory filing published on Monday, January 9, 2023, Heyward Donigan has left her post as chief executive officer at the drugstore chain, after less than three and a half years in the role, effective January 7, 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.
Rite Aid will undertake a search for a successor.
Heyward Donigan’s duties as CEO will be taken over temporarily by Elizabeth (Busy) Burr, most recently President and Chief Commercial Officer at Carrot Inc., as interim Chief Executive Officer.
Already a director
Burr has already been a member of the board of directors of Rite Aid. Generally speaking, most director-turned-CEO appointments occur following a sudden resignation of the outgoing CEO and signal a lack of preparedness on the company’s part to groom internal talent. Directors-turned-executives represent a blend of outsider and insider.
They don’t have the constraints of a pure insider when it comes to leading painful changes or making unpopular decisions, and they have more company knowledge than a pure outsider.
Having been a director, Burr understands the expectations and dynamics of the board and has knowledge of Rite Aid’s organization, risk-management practices and strategy.
“Enhance its competitive position”
Rite Aid did not give an explicit reason for Heyward Donigan’s departure from the CEO post. Bruce Bodaken, Rite Aid Chairman, said: “As the Company continues its efforts to enhance its competitive position in this dynamic environment, the Board determined and Heyward agreed that now is the right time to identify the next leader of the business.”
The top three reasons cited in corporate announcements for CEO departures over the past 12 months are performance issues (26.6% of cases), implementation of a planned succession (16.4%) 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 (6.3% 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 30.4% of cases, no reason was given.
Precise information regarding Heyward Donigan’s future plans was not immediately available.
“Departure/ceased to serve/terminated”
Rite Aid said: “Burr’s appointment follows Heyward Donigan’s departure from the Company as President and CEO, and as a member of the Board.”
Rite Aid further said: “On January 7, 2023, Rite Aid Corporation (the “Company”) and Heyward Donigan, the Company’s President and Chief Executive Officer (“CEO”), mutually agreed to terms pursuant to which Ms. Donigan ceased to serve as CEO and terminated employment with the Company, effective immediately.”
Share price decline since January 2021
The announcement follows a decline in Rite Aid Corp.’s share price of 79% since January 2021.
In the position of CEO since 2019
Heyward Donigan became CEO of the Company in 2019.
Donigan was appointed Chief Executive Officer in 2019 and President and Chief Executive Officer in February 2020.
From 2015 to 2019 Donigan served as President and Chief Executive Officer of Sapphire Digital, which designs and develops omni-channel platforms that help consumers choose their best fit healthcare providers.
Previously, she served as President and Chief Executive Officer of Value Options, then the nation’s largest independent behavioral health improvement company, and prior to that she served as Executive Vice President and Chief Marketing Officer at Premara Blue Cross and as Senior Vice President of all operations at Cigna Healthcare.
She previously held executive roles at General Electric, Empire BCBS and U.S. Healthcare.
She has served on the Board of Directors of Rite Aid since 2019.
35 words by Heyward Donigan
In the news release announcing her departure as CEO of Rite Aid Corp., Heyward Donigan received praise, thanks and good wishes.
In the announcement of the leadership change, Heyward Donigan kept it short and said 35 words.
“I am proud”
Heyward Donigan stated: “It has been a privilege to lead Rite Aid and its exceptional team. I am proud of all that we have achieved together, and I believe that the Company is well positioned for the future.”
Over the past 12 months, 27% 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 335 CEO departures in the Russell 3000 Index evaluated over the past 12 months (January 9, 2022, to January 8, 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 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, utilities and financials sectors, as measured by average Push-out Scores.
In the consumer staples sector, which includes Rite Aid Corp., the average Push-out Score over the past 12 months was 6.9, which is well above the critical threshold of 5.
In the consumer staples sector, seven 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.
Closer look at female CEOs
Female CEOs in the U.S. have been found to be more likely to be pushed out than male CEOs. Over the past 12 months, outgoing female CEOs have received an average Push-out Score of 6.3, considerably above the average Push-out Score of 5.6 for outgoing male CEOs.
Female CEOs have a 35% shorter tenure. Women in the role step down after an average tenure of 5.5 years, compared with 8.5 years for men, the exechange data shows, which covers 24 departing female CEOs and 311 departing male CEOs.
On a five-year view, departing female CEOs received an average Push-out Score of 5.8, which was significantly higher than the average Push-out Score of 5.3 for departing male CEOs. This suggests that women were more likely to be pushed out than men, even when using a longer observation period. This is evident from exechange data covering 1,403 CEO departures (84 of them women and 1,319 men) from 2017 to 2021. Female CEOs who announced their departure from 2017 to 2021 had a 26% shorter tenure, exiting after an average of 6.6 years, compared with 8.9 years for men, the exechange data shows.
Push-out Score for Heyward Donigan’s move determined
The Push-out Score regarding Heyward Donigan’s move is explained point by point in the exechange report.
exechange reached out to Rite Aid and offered the company the opportunity to comment on the score.
Read the full story in the exechange report 3.2023 ($).