- After about six years in the position
- Accolades, praise and thanks for Scalzo
- Geoff Tanner taking over
- Scalzo will remain as Executive Vice Chair at Simply Good Foods
- Scalzo spoke at length and said 133 words
(exechange) — Denver, Colorado, January 30, 2023 — Joe Scalzo, chief executive of Simply Good Foods, leaves his position. As announced by Simply Good Foods Co. in a news release and in a regulatory filing published on Monday, January 30, 2023, Joseph E. (Joe) Scalzo leaves his post as chief executive officer at the consumer packaged food and beverage company, after about six years in the role, effective July 7, 2023.
The average tenure of CEOs who announced their departure over the past 12 months was 8.5 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.
Joe Scalzo’s duties as CEO will be taken over by Geoff Tanner, most recently Chief Commercial and Marketing Officer at The J.M. Smucker Company.
The fact that Joe Scalzo’s successor is brought in from outside suggests that the board may seek to stimulate change with fresh ideas and new initiatives.
“Thoughtful succession planning process”
Joe Scalzo’s planned departure from the CEO post is explained as follows. James M. Kilts, Chairman of the Board, stated: “We are pleased to welcome Geoff following a comprehensive search and thoughtful succession planning process to identify the next CEO of Simply Good Foods.”
The top three reasons cited in corporate announcements for CEO departures over the past 12 months are performance issues (27.2% of cases), implementation of a planned succession (15.6%) and the statement that the time was right for a change (9.3%), according to exechange data. Other motives given for leadership changes included the outgoing CEO’s wish to pursue other opportunities (5.7% of cases), personal reasons (3%) 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 31.1% of cases, no reason was given.
Scalzo will remain as Executive Vice Chair at Simply Good Foods
Simply Good Foods stated: “At the time of the CEO succession, Mr. Scalzo will be appointed as Executive Vice Chair of the Board and will serve in this role through August 31, 2024, the last day of the Company’s fiscal year 2024. Mr. Scalzo is expected to continue to serve as a director thereafter. Upon Mr. Scalzo’s appointment as Executive Vice Chair, David J. West will step down from the position of Vice Chair of the Board, but is expected to continue to serve as an independent director of the Company.”
Simply Good Foods said: “Geoff Tanner, formerly Chief Commercial and Marketing Officer at The J.M. Smucker Company (NYSE: SJM), has been named President, Chief Operating Officer and CEO Elect and a member of the Simply Good Foods Board of Directors, effective April 3, 2023. Mr. Tanner will subsequently succeed Joseph E. Scalzo as Chief Executive Officer on July 7, 2023, in connection with Mr. Scalzo’s sixth anniversary as CEO of the Company.”
Simply Good Foods further said: “In connection with Mr. Scalzo’s transition into retirement, on January 27, 2023, the Company entered into a transition agreement with Mr. Scalzo.”
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.
Share price increase since July 2017
The announcement follows an increase in Simply Good Foods Co.’s share price of 200% since July 2017. July 2017 is the month in which Scalzo’s tenure as CEO began.
In the position of CEO since 2017
Joe Scalzo became CEO of the Company in 2017.
His bio reads as follows:
Scalzo has served as a director and President and Chief Executive Officer of the Company since July 2017 and in the same role for Atkins and as a member of Atkins’ board of directors since February 2013.
From November 2005 to February 2011, Scalzo served as a senior executive in various roles at Dean Foods, including as President and Chief Operating Officer, as well as President and Chief Executive Officer of WhiteWave Foods. Scalzo is credited at Dean for leading the transformation of WhiteWave Foods, which began as three separate businesses, into a winning consumer foods company.
Prior to that, Scalzo held various executive roles at Gillette, where he spearheaded the successful three-year turnaround of the company’s one billion dollar global personal care business and The Coca Cola Company.
Scalzo began his career at P&G in 1985.
PARTICIPATION ON OTHER BOARDS
Scalzo has been a member of the Board of Directors of TreeHouse Foods, Inc. since April 2022.
Before joining Simply Good Foods, Scalzo served as a director of Earthbound Farm from 2010 to October 2013.
Scalzo also served as a director of HNI Corp. from 2003 to November 2009 and Focus Brands from March 2014 to October 2020.
Scalzo received a Bachelor of Science in Chemical Engineering from the University of Notre Dame.
133 words by Joe Scalzo
In the news release announcing his departure as CEO of Simply Good Foods Co., Joe Scalzo received accolades, praise and thanks.
In announcing the leadership change, Joe Scalzo spoke at length and said 133 words.
“Continue growing market share and profitability”
Joe Scalzo stated: “It has been the crowning privilege of my career to be a part of the Simply Good Foods success story and work with this talented team to scale the business, diversify our portfolio and embed an industry-leading culture. Geoff knows the food space and its snacking segments well and is a bold, compassionate and empowering leader who is committed to building inclusive organizations that bring out the best in their people. He has the vision needed to ensure Simply Good Foods continues to set trends for our industry and lead the nutritional snacking movement. The Board and I are confident that under his leadership, the Company will continue growing market share and profitability, and I look forward to partnering with Geoff to achieve a smooth transition and watching Simply Good Foods’ continued success.”
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 109 words. The longest statement was 510 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.
35% 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 334 CEO departures in the Russell 3000 Index evaluated over the past 12 months (January 30, 2022, to January 29, 2023), the average Push-out Score was 5.8, 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 35% 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 consumer staples sector far 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 Simply Good Foods Co., the average Push-out Score over the past 12 months was 7.1, which is far above the critical threshold of 5.
In the consumer staples sector, eight 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 Joe Scalzo’s move determined
The Push-out Score regarding Joe Scalzo’s move is explained point by point in the exechange report.
exechange reached out to Simply Good Foods and offered the company the opportunity to comment on the score.
Read the full story in the exechange report 6.2023 ($).