- After about six and a half years in the position
- Praise and thanks for Farner
- Bill Emerson taking over temporarily
- Search for a successor
- Farner said 113 words
(exechange) — Detroit, Michigan, February 13, 2023 — Jay Farner, chief executive of Rocket Cos., leaves his position. As announced by Rocket Cos. in a news release and in a regulatory filing published on Monday, February 13, 2023, Jay Farner leaves his post as chief executive officer at the fintech platform company, after about six and a half years in the role, effective June 1, 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.
Rocket Cos. will undertake a search for a successor.
Jay Farner’s duties as CEO will be taken over temporarily by Bill Emerson, currently Vice Chairman at Rock Holdings, Inc., the Company’s majority stockholder, as interim Chief Executive Officer.
“The time is right for me to focus on my family”
Jay Farner’s planned departure from the CEO post is explained as follows. Farner stated: “While the time is right for me to focus on my family, I will certainly miss working with some of the brightest minds in the fintech industry.”
The top three reasons cited in corporate announcements for CEO departures over the past 12 months are performance issues (26.1% of cases), implementation of a planned succession (16%) and the statement that the time was right for a change (9.5%), according to exechange data. Other motives given for leadership changes included the outgoing CEO’s wish to pursue other opportunities (5.6% of cases), personal reasons (3.3%) and conduct issues (2.1%). Rather rarely stated reasons are career change (2.1% of cases), health problems (1.8%), disagreement (1.2%), death (0.9%) and the desire for more time with family (0.6%). Sometimes, more than one reason was given. In 30.9% of cases, no reason was given.
Precise information regarding Jay Farner’s future plans was not immediately available.
“Retire”
Rocket Cos. said: “[F]ollowing a 27-year career at the Company, Chief Executive Officer Jay Farner plans to retire from his position effective June 1, 2023.”
Rocket Cos. further said: “On February 8, 2023, Jay Farner notified the Board of Directors (the “Board”) of Rocket Companies, Inc. (the “Company”) of his intent to retire as Chief Executive Officer of the Company, effective June 1, 2023 (the “Transition Effective Date”), and as Vice Chairman and member of the Board, effective immediately.”
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 executives received Push-out Scores above the critical threshold of 5, indicating elevated pressure.
Share price decline since February 2021
The announcement follows a decline in Rocket Cos.’s share price of 58% since February 2021.
In the position of CEO since 2017
Jay Farner became CEO of the Company in 2017.
He also currently serves as the CEO of the Company’s subsidiary Rocket Central (previously Rock Central), a position he has held since January 2022.
Prior to that, Jay Farner was with Rocket Mortgage from 1996 until January 2022, and served as a senior leader since 1999.
Immediately prior to his promotion to CEO of Rocket Mortgage in 2017, Jay Farner served as President and Chief Marketing Officer of Rocket Mortgage.
Jay Farner also serves as Chief Executive Officer and Director of RHI, the Company’s principal stockholder, since 2017 and as a board member or officer of certain of its affiliates, including Rock Ventures.
Jay Farner serves as a board member of the Cleveland Cavaliers, Detroit Labs, LLC, Community Solutions, StockX, Bedrock Manufacturing, the Metropolitan Detroit YMCA, Bizdom Fund, the Rocket Giving Fund (where he also serves as President) and the Gilbert Family Foundation and a manager of Detroit Real Estate Holdings.
Jay Farner earned a bachelor’s degree in finance from Michigan State University.
113 words by Jay Farner
In the news release announcing his departure as CEO of Rocket Cos., Jay Farner received praise and thanks.
In announcing the leadership change, Jay Farner said 113 words.
“Amazing journey”
Jay Farner stated: “Being part of this amazing organization has been one of the most rewarding experiences of my life. More than 27 years ago, fresh out of college, I decided to join a small mortgage company led by Dan Gilbert. I never could have predicted the amazing journey that one decision would have taken me on, and I want to thank Dan for his mentorship, guidance and friendship over the years. Rocket Companies is full of incredible people – passionate about serving our clients, the community and each other. While the time is right for me to focus on my family, I will certainly miss working with some of the brightest minds in the fintech industry.”
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 110 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 337 CEO departures in the Russell 3000 Index evaluated over the past 12 months (February 13, 2022, to February 12, 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 financials sector substantially below 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 financials sector, which includes Rocket Cos., the average Push-out Score over the past 12 months was 4.3, which is substantially below the critical threshold of 5.
Nevertheless, even in this sector, some CEOs were compelled to leave their posts under what appeared to be severe stress. In the financials sector, 11 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 Jay Farner’s move determined
The Push-out Score regarding Jay Farner’s move is explained point by point in the exechange report.
exechange reached out to Rocket Cos. and offered the company the opportunity to comment on the score.
Read the full story in the exechange report 8.2023 ($).