- After almost 19 years in the position
- Accolades and praise for Templeton
- Haviv Ilan taking over
- Templeton will remain as chairman at Texas Instruments
- Templeton said 69 words
(exechange) — Dallas, Texas, January 19, 2023 — Rich Templeton, chief executive of Texas Instruments, leaves his position. As announced by Texas Instruments Inc. in a news release on Thursday, January 19, 2023, Richard K. (Rich) Templeton leaves his post as chief executive officer at the semiconductor company, after almost 19 years in the role, effective April 1, 2023.
It is the end of an era.
The average tenure of CEOs who announced their departure over the past 12 months was 8.4 years. Around 14% of CEOs left their posts after more than 15 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.
Rich Templeton’s duties as CEO will be taken over by Haviv Ilan, currently chief operating officer at Texas Instruments Inc.
Rich Templeton’s departure from the CEO post is explained as follows. Texas Instruments stated: “The transition is a well-planned succession that follows Ilan’s promotion to senior vice president in 2014, executive vice president and chief operating officer in 2020 and election to the board of directors in 2021.”
Texas Instruments had executed a similar plan in 2018 that backfired. On January 18, 2018, Texas Instruments had announced that Templeton would step down in June 2018 to make way for its chief operating officer at the time, Brian Crutcher, in what the company also had called a “well-planned succession.” In July 2018, one month after the CEO change, Texas Instruments said Crutcher had resigned, and Templeton was reassuming the top role. “Crutcher resigned due to violations of the company’s code of conduct. The violations are related to personal behavior that is not consistent with our ethics and core values, but not related to company strategy, operations or financial reporting,” Texas Instruments had said at the time.
“Strong foundation of ethics and values”
Pam Patsley, lead director of the TI board and chair of the compensation committee, said, regarding Haviv Ilan: “The board views succession planning as one of its vital responsibilities, and today’s announcement represents a thoughtful and well-planned transition. Haviv is well-known to the board, and is a demonstrated leader with deep business, technical and market knowledge and has a strong foundation of ethics and values.”
The top three reasons cited in corporate announcements for CEO departures over the past 12 months are performance issues (27% of cases), implementation of a planned succession (16.1%) and the statement that the time was right for a change (8.8%), according to exechange data. Other motives given for leadership changes included the outgoing CEO’s wish to pursue other opportunities (5.9% of cases), personal reasons (2.9%) and conduct issues (2.1%). Rather rarely stated reasons are career change (2.1% of cases), health problems (1.8%), death (0.9%), the desire for more time with family (0.6%) and disagreement (0.6%). Sometimes, more than one reason was given. In 31.4% of cases, no reason was given.
Templeton will remain as chairman at Texas Instruments
Texas Instruments stated: “Ilan, a 24-year veteran of TI, succeeds current CEO and president, Rich Templeton, who will transition out of these roles over the next two months but will remain the company’s chairman. ”
Texas Instruments said: “Texas Instruments Incorporated (TI) (Nasdaq: TXN) today said that its board of directors has selected Haviv Ilan to become the company’s next president and chief executive officer (CEO), effective April 1. Ilan, a 24-year veteran of TI, succeeds current CEO and president, Rich Templeton.”
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 Rich Templeton’s move was not available at the time of the analysis.
Share price increase since January 2018
The announcement follows an increase in Texas Instruments Inc.’s share price of 65% since January 2018.
In the position of CEO since 2004
Rich Templeton became CEO of the Company in 2004.
Templeton is a 40-year veteran of the semiconductor industry, serving the last 27 years at a senior level at the company.
He has been the company’s chairman since 2008, and chief executive officer and president from 2004 to June 2018 and July 2018 to present.
69 words by Rich Templeton
In the news release announcing his departure as CEO of Texas Instruments Inc., Rich Templeton received accolades and praise.
In announcing the leadership change, Rich Templeton said 69 words.
“Haviv is the right person”
Rich Templeton stated: “Haviv is an inspiring leader who is widely respected amongst our customers, employees and shareholders. He has a proven track record of delivering results, an intense focus on innovation and a passion to win, all of which make him an exceptional leader. The board and I are confident that Haviv is the right person to serve as TI’s next CEO and further strengthen the company for the long term.”
Over the past 12 months, 25% 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 108 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.
34% 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 19, 2022, to January 18, 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 time with family, performance issues or other opportunities were cited as departure reasons, the average Push-out Scores were also significantly elevated.
Around 34% 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, one in three 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, financials and utilities sectors, as measured by average Push-out Scores.
In the information technology sector, which includes Texas Instruments Inc., the average Push-out Score over the past 12 months was 6.2, which is well above the critical threshold of 5.
In the information technology sector, 20 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 Rich Templeton’s move determined
The Push-out Score regarding Rich Templeton’s move is explained point by point in the exechange report.
exechange reached out to Texas Instruments and offered the company the opportunity to comment on the score.
Read the full story in the exechange report 4.2023 ($).