- After almost nine years in the position
- Praise, thanks and good wishes for Krone
- Tom Bell taking over
- Krone said 95 words
(exechange) — Reston, Virginia, February 27, 2023 — Roger Krone, chief executive of Leidos, leaves his position. As announced by Leidos Holdings Inc. in a news release and in a regulatory filing published on Monday, February 27, 2023, Roger A. Krone leaves his post as chief executive officer at the defense, aviation, information technology and biomedical research company, after almost nine years in the role, effective May 3, 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.
Roger Krone’s duties as CEO will be taken over by Thomas A. (Tom) Bell, most recently President – Defense at Rolls-Royce plc.
The fact that Roger Krone’s successor is brought in from outside suggests that the board may seek to stimulate change with fresh ideas and new initiatives.
“Thorough and thoughtful process”
Roger Krone’s departure from the CEO post is explained as follows. Leidos stated: “Bell was selected by the company’s Board of Directors following a thorough and thoughtful process to select a successor.”
The top three reasons cited in corporate announcements for CEO departures over the past 12 months are performance issues (26.3% of cases), implementation of a planned succession (16.1%) and the statement that the time was right for a change (9.9%), 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 (3.6%) and conduct issues (2.1%). Rather rarely stated reasons are career change (2.1% of cases), health problems (1.5%), disagreement (1.2%), the desire for more time with family (0.9%) and death (0.9%). Sometimes, more than one reason was given. In 29.9% of cases, no reason was given.
Precise information regarding Roger Krone’s future plans was not immediately available.
Leidos said: “Bell, current President – Defense Rolls-Royce plc; Chairman & Chief Executive Officer, Rolls-Royce North America, Inc., will succeed current Chairman and CEO, Roger Krone, who has served in the role since 2014.”
Leidos further said: “Mr. Bell will succeed Roger A. Krone, who will retire as Chairman at the time of the Company’s 2023 annual meeting of stockholders (“2023 Annual Meeting”), and Chief Executive Officer as of the Effective Date [May 3, 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 executives received Push-out Scores above the critical threshold of 5, indicating elevated pressure.
Share price increase since July 2014
The announcement follows an increase in Leidos Holdings Inc.’s share price of 157% since July 2014. July 2014 is the month in which Krone’s tenure as CEO began.
In the position of CEO since 2014
Roger Krone became CEO of the Company in 2014.
Krone will retire as Chairman at the time of the Leidos 2023 annual meeting of stockholders, and CEO when Bell’s appointment becomes effective.
The Board expects to appoint Robert S. Shapard independent, non-executive chair after the 2023 annual meeting of stockholders and will also nominate Bell to the Board.
To facilitate a seamless leadership transition, Krone will continue as a fully employed advisor through July of this year.
Krone has served as the Company’s Chief Executive Officer since July 2014 and as the Chair of the Board since March 2015.
Prior to his appointment as the Company’s Chief Executive Officer, Krone served as President of Network and Space Systems for The Boeing Company since 2006.
Krone previously held various senior program management and finance positions at Boeing, McDonnell Douglas Corp. and General Dynamics.
Krone is also a certified public accountant (inactive).
95 words by Roger Krone
In the news release announcing his departure as CEO of Leidos Holdings Inc., Roger Krone received praise, thanks and good wishes.
In announcing the leadership change, Roger Krone said 95 words.
“The best possible hands”
Roger Krone stated: “Working with the extraordinary people of Leidos has been the honor of my career. Their dedication, innovation, and unwavering commitment to our mission have been the driving force behind our success. I want to thank them for the privilege of serving as their leader for nearly nine years, and for inspiring me with their passion, their brilliance, and their unwavering commitment to excellence. It has been a privilege to be a part of this remarkable team, and I am confident that the future of Leidos is in the best possible hands with all of them.”
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 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.
36% 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 335 CEO departures in the Russell 3000 Index evaluated over the past 12 months (February 27, 2022, to February 26, 2023), the average Push-out Score was 5.9, 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 36% 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 industrials sector marginally 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 industrials sector, which includes Leidos Holdings Inc., the average Push-out Score over the past 12 months was 4.8, which is marginally 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 industrials sector, 12 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 Roger Krone’s move determined
The Push-out Score regarding Roger Krone’s move is explained point by point in the exechange report.
exechange reached out to Leidos and offered the company the opportunity to comment on the score.
Read the full story in the exechange report 10.2023 ($).