- After almost eight years in the position
- Accolades, praise and thanks for Greco
- Search for a successor
- Greco spoke at length and said 174 words
(exechange) — Raleigh, North Carolina, February 28, 2023 — Tom Greco, chief executive of Advance Auto, is set to leave his position. As announced by Advance Auto Parts Inc. in a news release and in a regulatory filing published on Tuesday, February 28, 2023, Thomas R. (Tom) Greco leaves his post as chief executive officer at the auto-parts retailer, after almost eight years in the role, effective December 31, 2023.
The average tenure of CEOs who announced their departure over the past 12 months was 8.4 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.
Advance Auto will undertake a search for a successor.
Long goodbye
It is a long goodbye. The announcement of Tom Greco’s move comes up to 10 months prior to his planned departure from the post of CEO.
In general, a top executive who announces the departure particularly early may be considered a lame duck.
Lengthy lead times give boards extra time to find replacements, and they also create uncertainty. Would-be successors may jockey for attention and workers may wonder who is actually in charge.
Generally speaking, lame-duck leaders can take a forceful role in selecting a successor and are not expected to launch major shifts.
“Now is the right time”
Tom Greco’s planned departure from the CEO post is explained as follows. Greco stated: “I believe now is the right time to begin to transition leadership.”
The top three reasons cited in corporate announcements for CEO departures over the past 12 months are performance issues (26.4% of cases), implementation of a planned succession (16.3%) and the statement that the time was right for a change (9.8%), 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 (3.6%) 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 29.7% of cases, no reason was given.
Precise information regarding Tom Greco’s future plans was not immediately available.
“Retire”
Advance Auto said: “Tom Greco has informed the company of his plan to retire as President and Chief Executive Officer of the company at the end of the year.”
Advance Auto further said: “On February 22, 2023, Thomas R. Greco, President and Chief Executive Officer of Advance Auto Parts, Inc. (the “Company”) informed the Company’s Board of Directors (the “Board”) of his intention to retire from his position at the end of the year.”
Generally, retirements are seen as formally voluntary departures. Still, CEOs may also be pressured to accelerate their retirement plans. In fact, 34% 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 2022
The announcement follows a decline in Advance Auto Parts Inc.’s share price of 40% since February 2022.
In the position of CEO since 2016
Tom Greco became CEO of the Company in 2016.
Following Greco’s retirement, he plans to serve in an advisory capacity through a transition period.
Greco has served as the Company’s President and Chief Executive Officer and a member of the Company’s Board since 2016.
Previously, Greco was the Chief Executive Officer of Frito-Lay North America, where he worked to grow revenue and increase profits, providing him with important experience in the consumer retail industry.
Greco became the Company’s President and Chief Executive Officer in August 2016, having served as Chief Executive Officer since April 2016.
From September 2014 until April 2016, Greco served as Chief Executive Officer, Frito-Lay North America, a unit of PepsiCo, Inc. (“PepsiCo”), a leading global food and beverage company.
As Chief Executive Officer, Frito-Lay North America, Greco was responsible for overseeing PepsiCo’s snack and convenient foods business in the U.S. and Canada.
Greco previously served as Executive Vice President, PepsiCo and President, Frito-Lay North America from September 2011 until September 2014 and as Executive Vice President and Chief Commercial Officer for Pepsi Beverages Company from 2009 to September 2011.
Greco joined PepsiCo in Canada in 1986 and served in a variety of leadership positions, including Region Vice President, Midwest; President, Frito-Lay Canada; Senior Vice President, Sales, Frito-Lay North America; President, Global Sales, PepsiCo; and Executive Vice President, Sales, North America Beverages.
Before joining PepsiCo, Greco worked at The Proctor & Gamble Company, a consumer packaged goods company.
He has served as a director of Tapestry, Inc., an American multinational luxury fashion holding company, since December 2020.
174 words by Tom Greco
In the news release announcing his departure as CEO of Advance Auto Parts Inc., Tom Greco received accolades, praise and thanks.
In announcing the leadership change, Tom Greco spoke at length and said 174 words.
“I am extremely proud”
Tom Greco stated: “It has been a privilege to lead Advance and I am extremely proud of the talented team we have built as well as the accomplishments we have delivered together. Since my appointment as CEO, we have successfully integrated a transformative acquisition while scaling the business and enhancing our operational efficiency, inventory and distribution capabilities to better serve our customers. I believe now is the right time to begin to transition leadership for two primary reasons. First, we are in the final year of our three-year strategic business plan and are in the process of updating our next multi-year strategy. This transition will enable my successor to play a role in developing the next chapter of Advance’s strategy and help ensure the long-term success of Advance. Secondly, by planning for retirement in advance, I will be able to work with the Board’s Succession Committee to identify my successor and facilitate a smooth transition. In the meantime, I’m committed to the execution of our 2023 plan to continue delivering for customers and driving long-term shareholder value.”
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 337 CEO departures in the Russell 3000 Index evaluated over the past 12 months (February 28, 2022, to February 27, 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 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 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 Advance Auto Parts 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, 24 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 Greco’s move determined
The Push-out Score regarding Tom Greco’s move is explained point by point in the exechange report.
exechange reached out to Advance Auto and offered the company the opportunity to comment on the score.
Read the full story in the exechange report 10.2023 ($).