- After nine years in the position
- Accolades, praise, thanks and good wishes for Charron
- Ric Phillips taking over
- Charron said 86 words
(exechange) — Jasper, Indiana, January 10, 2023 — Don Charron, chief executive of Kimball Electronics, leaves his position. As announced by Kimball Electronics Inc. in a news release and in a regulatory filing published on Tuesday, January 10, 2023, Donald D. (Don) Charron leaves his post as chief executive officer at the electronics contract manufacturer, after nine years in the role, effective February 28, 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.
Don Charron’s duties as CEO will be taken over by Richard D. (Ric) Phillips, most recently President and Chief Executive Officer at Elkay Manufacturing Company.
The fact that Don Charron’s successor is brought in from outside suggests that the board may seek to stimulate change with fresh ideas and new initiatives.
“Positioned for growth”
Kimball Electronics did not give an explicit reason for Don Charron’s departure from the CEO post. Phillips said: “The Company has a rich history of excellence, and is positioned for growth with near record levels of open order backlog, new program wins, and increased capacity resulting from the recent facility expansions.”
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 (8.2%), according to exechange data. Other motives given for leadership changes included the outgoing CEO’s wish to pursue other opportunities (6.2% of cases), personal reasons (2.9%) and conduct issues (2.3%). 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 30.8% of cases, no reason was given.
Precise information regarding Don Charron’s future plans was not immediately available.
Kimball Electronics said: “Donald D. Charron, Chairman and Chief Executive Officer, will retire on February 28, 2023.”
Kimball Electronics further said: “On January 4, 2023, Donald D. Charron, Chairman and Chief Executive Officer of Kimball Electronics, Inc. (“Kimball Electronics,” the “Company,” “we,” or “us”) informed Kimball Electronics of his intention to retire effective February 28, 2023.”
Generally, retirements are seen as formally voluntary departures. Still, CEOs may also be pressured to accelerate their retirement plans. In fact, 35% of the time “retire” 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 the result of any disagreement”
Kimball Electronics stated, regarding the change: “Mr. Charron has served as our Chairman and Chief Executive Officer since we became a stand-alone public company in October 2014, and his decision to retire as the Chairman and Chief Executive Officer is not the result of any disagreement on any matter relating to our accounting practices, operations, or policies.”
Share price increase since January 2018
The announcement follows an increase in Kimball Electronics Inc.’s share price of 31% since January 2018.
In the position of CEO since 2014
Don Charron became CEO of the Company in 2014.
Charron serves as Kimball Electronics’ Chairman of the Board and Chief Executive Officer.
Prior to 2014, he served as an Executive Vice President of Kimball International, Inc. (Kimball Electronics’ former parent company), a member of the Board of Directors of Kimball International, and the President of Kimball Electronics Group.
Charron had led the EMS segment of Kimball International since joining Kimball International in 1999.
Prior to that, he spent six years with Rockwell International in various leadership roles.
Charron earned a Bachelor of Science degree in electrical engineering from the South Dakota School of Mines and Technology in 1987.
86 words by Don Charron
In the news release announcing his departure as CEO of Kimball Electronics Inc., Don Charron received accolades, praise, thanks and good wishes.
In the announcement of the leadership change, Don Charron said 86 words.
“It has been a team effort”
Don Charron stated: “It is with immense gratitude and pride that I say farewell to the Kimball family. Thank you for a journey of a lifetime. I am so proud of what we have accomplished together, and grateful for the support and partnership I received along the way. It has been a team effort, and I’m leaving with friendships and memories that will last forever. I have been very fortunate to serve the Company during my career, and I’ve never been more excited about the future of Kimball Electronics.”
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 341 CEO departures in the Russell 3000 Index evaluated over the past 12 months (January 10, 2022, to January 9, 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 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 consumer staples, communication 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 information technology sector, which includes Kimball Electronics 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, 18 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 Don Charron’s move determined
The Push-out Score regarding Don Charron’s move is explained point by point in the exechange report.
exechange reached out to Kimball Electronics and offered the company the opportunity to comment on the score.
Read the full story in the exechange report 3.2023 ($).