- After less than a year and a half in the position
- Dusan Senkypl taking over temporarily
- Deshpande kept it short and said 56 words
(exechange) — Chicago, Illinois, March 31, 2023 — Kedar Deshpande, chief executive of Groupon, leaves his position. As announced by Groupon Inc. in a news release and in a regulatory filing published on Friday, March 31, 2023, Kedar Deshpande has left his post as chief executive officer at the e-commerce marketplace, after less than a year and a half in the role, effective March 30, 2023.
The average tenure of CEOs who announced their departure over the past 12 months was 8 years. Around 13% of departing CEOs left their posts within two 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.
Kedar Deshpande’s duties as CEO will be taken over temporarily by Dusan Senkypl, most recently Chairman and CEO at Pale Fire Capital, as Interim Chief Executive Officer.
Already a director
Senkypl has already been a member of the board of directors of Groupon. 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, Senkypl understands the expectations and dynamics of the board and has knowledge of Groupon’s organization, risk-management practices and strategy.
“Accelerating Groupon’s transformation”
Groupon did not give an explicit reason for Kedar Deshpande’s departure from the CEO post. Ted Leonsis, Chairman of the Groupon Board of Directors, stated: “The Board is focused on accelerating Groupon’s transformation and we are confident that Dusan can help us reach this important goal.”
The top three reasons cited in corporate announcements for CEO departures over the past 12 months are performance issues (27.5% of cases), implementation of a planned succession (16.6%) and the statement that the time was right for a change (10.3%), according to exechange data. Other motives given for leadership changes included the outgoing CEO’s wish to pursue other opportunities (5.9% of cases), personal reasons (3.8%) and conduct issues (2.2%). Rather rarely stated reasons are health problems (1.6% of cases), disagreement (1.3%), death (1.3%), the desire for more time with family (0.9%) and career change (0.6%). Sometimes, more than one reason was given. In 28.1% of cases, no reason was given.
Precise information regarding Kedar Deshpande’s future plans was not immediately available.
Groupon said: “Mr. Senkypl succeeds Kedar Deshpande, who has stepped down as CEO and Director of Groupon and will serve as an advisor to the company for 60 days to aid in a smooth transition.”
Groupon further said: “The Company announced that its Board of Directors (the “Board”) appointed Dusan Senkypl as Interim Chief Executive Officer (“Interim CEO”) of the Company, effective on March 30, 2023 (the “Effective Date”). In connection with such appointment, Mr. Senkypl entered into an employment agreement with the Company’s wholly owned subsidiary, Groupon Management, LLC, dated March 30, 2023 (the “Employment Agreement”). Mr. Senkypl will replace Kedar Deshpande, who is no longer serving as the Company’s Chief Executive Officer or a member of the Board as of the Effective Date.”
Share price decline since December 2021
The announcement follows a decline in Groupon Inc.’s share price of 83% since December 2021. December 2021 is the month in which Deshpande’s tenure as CEO began.
In the position of CEO since 2021
Kedar Deshpande became CEO of the Company in 2021.
His bio reads as follows:
- Groupon Director (2021-present) and Chief Executive Officer (2021-present)
- Deshpande spent more than 10 years (2011-2021) at Zappos.com (“Zappos”), where he most recently served as the Chief Executive Officer (2020-2021). Throughout his tenure, he held various senior leadership positions across Zappos’ Marketing, Product, Tech and Service functions and served as Zappos’ Chief Operating Officer (2019-2020). Prior to that, Deshpande was a software engineer at General Electric.
At the time of Kedar Deshpande’s appointment as Chief Executive Officer at Groupon, Ted Leonsis, Chairman of the Board of Directors, had stated: “Throughout the Board’s search process, our goal was to identify a leader who could help accelerate Groupon’s progress to become the go-to destination for local, and we are excited to welcome Kedar as Groupon’s next CEO. Kedar has a strong track record of driving growth and operational excellence, and brings significant e-commerce leadership experience to Groupon. We believe these characteristics coupled with his passion for people and culture, will allow Kedar to successfully lead Groupon into its next chapter of growth.”
At the time of Kedar Deshpande’s appointment as Chief Executive Officer at Groupon, Deshpande had stated: “Groupon is at a pivotal moment in its journey to become the destination for local, and I am honored to take on this leadership role. Local experiences create memories and forge new connections that can last a lifetime, and as an at-scale local experiences marketplace, Groupon is very well-positioned to grow by connecting more and more consumers to local merchants around the world. The company has spent the last 18 months building a strong foundation for growth and I am excited to work alongside the Groupon team and the Board to drive progress and create value for all of our stakeholders.”
56 words by Kedar Deshpande
In announcing the leadership change, Kedar Deshpande kept it short and said 56 words.
“Significant reduction of our fixed cost structure”
Kedar Deshpande stated: “It has been a tremendous honor to serve as the CEO of Groupon and I am proud of the goals our team has accomplished together, including a significant reduction of our fixed cost structure. I look forward to watching the company continue to transform into the ultimate destination for local services and experiences under Dusan’s leadership.”
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.
39% 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 320 CEO departures in the Russell 3000 Index evaluated over the past 12 months (March 31, 2022, to March 30, 2023), the average Push-out Score was 6.1, 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 personal reasons were cited as departure reasons, the average Push-out Scores were also significantly elevated.
Around 39% 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, three in eight departing CEOs were forced out or fired.
Push-out Score for Kedar Deshpande’s move determined
The Push-out Score regarding Kedar Deshpande’s move is explained point by point in the exechange report.
Read the full story in the exechange report 14.2023 ($).