- After about five years in the position
- Praise and thanks for Sheffield
- Rich Dealy taking over
- Sheffield kept it short and said 39 words
(exechange) — Dallas, Texas, April 26, 2023 — Scott Sheffield, chief executive of Pioneer, is set to leave his position. His upcoming departure is made public at an early stage. As announced by Pioneer Natural Resources Co. in a news release and in a regulatory filing published on Wednesday, April 26, 2023, Scott D. Sheffield leaves his post as chief executive officer at the independent oil and gas exploration and production company, after about five consecutive years in the role, effective December 31, 2023.
The average tenure of CEOs who announced their departure over the past 12 months was 7.8 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.
It is a long goodbye. The announcement of Scott Sheffield’s move comes up to eight 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.
Scott Sheffield’s duties as CEO will be taken over by Richard P. (Rich) Dealy, currently President and Chief Operating Officer at Pioneer Natural Resources Co.
The announcement marks Sheffield’s second retirement as the CEO of Pioneer. Sheffield previously retired in 2016, only to come back to helm Pioneer in 2019.
“The right time”
The planned management change is explained as follows. Chairman Ken Thompson stated: “[N]ow is the right time to implement the robust succession plan we have put in place.”
The top three reasons cited in corporate announcements for CEO departures over the past 12 months are performance issues (27.4% of cases), implementation of a planned succession (16.2%) 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 (6.4% 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 (1%) and career change (0.6%). Sometimes, more than one reason was given. In 28.3% of cases, no reason was given.
Precise information regarding Scott Sheffield’s future plans was not immediately available.
Pioneer said: “Dealy will replace current CEO Scott D. Sheffield, who will retire at the end of 2023.”
Pioneer further said: “On April 21, 2023, Scott D. Sheffield, Chief Executive Officer (the “CEO”) of the Company, informed the Board of Directors (the “Board”) of the Company that he intends to retire as the Company’s CEO, effective end of day on December 31, 2023.”
Generally, retirements are seen as formally voluntary departures. Still, CEOs may also be pressured to accelerate their retirement plans. In fact, in 37% of the cases where the term “retirement” 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 February 2019
The announcement follows an increase in Pioneer Natural Resources Co.’s share price of 56% since February 2019. February 2019 is the month in which Sheffield’s tenure as CEO began.
In the position of CEO since 2019
Scott Sheffield became CEO of the Company in 2019.
Sheffield is expected to continue to serve on the Board following his retirement.
The Board also previously nominated Dealy for election to the Company’s Board.
Sheffield was appointed the Company’s Chief Executive Officer in February 2019 and also served as the Company’s President from February 2019 through December 2020.
He served as Chairman of the Board of the Company from 1999 through February 2019.
Previously, he had served as Chief Executive Officer of the Company from 1997 through December 31, 2016, and then as the Executive Chairman until December 31, 2017.
Sheffield was the Chairman of the Board of Directors and Chief Executive Officer of Parker & Parsley Petroleum Company, a predecessor of the Company (together with its predecessor companies, “Parker & Parsley”), from January 1989 until Pioneer was formed in August 1997.
Sheffield joined Parker & Parsley as a petroleum engineer in 1979, was promoted to Vice President – Engineering in September 1981, was elected President and a Director in April 1985.
Before joining Parker & Parsley, Sheffield was employed as a production and reservoir engineer for Amoco Production Company.
39 words by Scott Sheffield
In the news release announcing his departure as CEO of Pioneer Natural Resources Co., Scott Sheffield received praise and thanks.
In announcing his departure, Scott Sheffield kept it short and said 39 words.
“With a sure hand and a clear strategic vision”
Scott Sheffield stated: “Rich is a disciplined and focused leader. His three-decade track record of operational and financial contributions, industry knowledge and inspiring leadership have prepared him to take the helm of Pioneer with a sure hand and a clear strategic vision.”
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.
40% 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 314 CEO departures in the Russell 3000 Index evaluated over the past 12 months (April 26, 2022, to April 25, 2023), the average Push-out Score was 6.2, according to exechange data. References to conduct issues, disagreements and irregularities lead to the highest Push-out Scores. When performance issues, pursuit of other opportunities or time with family were cited as departure reasons, the average Push-out Scores were also significantly elevated.
Around 40% 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, two in five departing CEOs were forced out or fired.
Push-out Score for Scott Sheffield’s move determined
The Push-out Score regarding Scott Sheffield’s move is explained point by point in the exechange report.
exechange reached out to Pioneer and offered the company the opportunity to comment on the score.
Read the full story in the exechange report 18.2023 ($).