- After around 13 years in the position
- Praise, thanks and good wishes for Tomlinson
- Michelle Gloeckler taking over temporarily
- Search for a successor
- Tomlinson kept it short and said 51 words
(exechange) — Bowling Green, Kentucky, February 6, 2023 — Tom Tomlinson, chief executive of Holley, leaves his position. As announced by Holley Inc. in a news release and in a regulatory filing published on Monday, February 6, 2023, Thomas (Tom) Tomlinson leaves his post as chief executive officer at the platform serving performance automotive enthusiasts, after around 13 years in the role, effective immediately.
The average tenure of CEOs who announced their departure over the past 12 months was 8.5 years. Around 31% of CEOs left their posts after more than 10 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.
Holley will undertake a search for a successor.
Tom Tomlinson’s duties as CEO will be taken over temporarily by Michelle Gloeckler, a former Chief Merchant & President International at Academy Sports & Outdoors, as Interim Chief Executive Officer.
Already a director
Gloeckler has already been a member of the board of directors of Holley. 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, Gloeckler understands the expectations and dynamics of the board and has knowledge of Holley’s organization, risk-management practices and strategy.
No reason given
In the announcement, Holley did not explicitly explain the reason for the move.
The top three reasons cited in corporate announcements for CEO departures over the past 12 months are performance issues (26.5% of cases), implementation of a planned succession (16.1%) and the statement that the time was right for a change (9.2%), 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%), disagreement (0.9%), death (0.9%) and the desire for more time with family (0.6%). Sometimes, more than one reason was given. In 31.3% of cases, no reason was given.
Precise information regarding Tom Tomlinson’s future plans was not immediately available.
“Retire”
Holley said: “Tom Tomlinson will retire as President and Chief Executive Officer (“CEO”) and resign from the Board.”
Holley further said: “On February 4, 2023, Thomas Tomlinson gave notice to the Company that he will retire as President and Chief Executive Officer (“CEO”) and resign from the Board of Directors (the “Board”), effective February 6, 2023.”
Generally, retirements are seen as formally voluntary departures. Still, CEOs may also be pressured to accelerate their retirement plans. In fact, 33% 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 decline since February 2022
The announcement follows a decline in Holley Inc.’s share price of 71% since February 2022.
In the position of CEO since 2009
Tom Tomlinson became CEO of the Company in 2009.
Tomlinson has served as President and Chief Executive Officer of Holley and as a member of the Company’s Board of Directors since July 2021 and, prior to the Business Combination, previously served as President and Chief Executive Officer of Holley Intermediate since December 2009.
Since that time, he and his team have driven significant growth in revenues and earnings by focusing the business on its passionate automotive enthusiast consumers and by developing innovative new products for the cars and trucks they love.
Tomlinson and his team have completed a series of strategic acquisitions which have contributed meaningful sales and earnings growth, added new product categories and brands and have increased Holley’s market position in the otherwise highly fragmented performance automotive aftermarket industry.
Prior to assuming the role of President and Chief Executive Officer, Tomlinson served as Chief Financial Officer since March 2003, during which time he and his team put the initial building blocks in place that have supported the business’s transformation into a profitable and growing business.
Tomlinson is a passionate automotive enthusiast and has been immersed in car culture since childhood.
He began his professional career in public accounting where he served a wide variety of businesses with PricewaterhouseCoopers.
Tomlinson holds a bachelor’s degree in accounting and finance from Liberty University.
51 words by Tom Tomlinson
In the news release announcing his departure as CEO of Holley Inc., Tom Tomlinson received praise, thanks and good wishes.
In announcing the leadership change, Tom Tomlinson kept it short and said 51 words.
“We have accomplished a great deal together”
Tom Tomlinson stated: “It has been an honor to lead Holley since 2009 and I would like to thank all of our employees for their commitment and service to the Company. We have accomplished a great deal together, and I believe this team will continue to drive strong long-term growth well into the future.”
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 336 CEO departures in the Russell 3000 Index evaluated over the past 12 months (February 6, 2022, to February 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 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 discretionary 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, health care and consumer staples 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 discretionary sector, which includes Holley Inc., the average Push-out Score over the past 12 months was 6.6, which is well above the critical threshold of 5.
In the consumer discretionary sector, 23 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 Tom Tomlinson’s move determined
The Push-out Score regarding Tom Tomlinson’s move is explained point by point in the exechange report.
exechange reached out to Holley and offered the company the opportunity to comment on the score.
Read the full story in the exechange report 7.2023 ($).