Becker's Hospital Review

36 CEO / STRATEGY Reading between the lines when CEOs abruptly 'step down' By Molly Gamble A mbiguous language around CEO departures can obscure the circumstances or drivers of their exits. Researchers are trying to find correlations that get the real story. A team of researchers from Stanford Graduate School of Business and Yale School of Management looked beyond the language of CEOs who "stepped down" to examine the push-out scores of nearly 1,400 turnover events at Russell 3000 companies between 2017 and 2021. e push-out score was developed by financial journalist Daniel Schauber to assess the likelihood that a CEO was pressured to resign versus voluntarily leaving their role. e researchers found a high push-out score for 29 percent of turnover events, suggesting an involuntary departure. Only 23 percent had a low score indicative of a voluntary exit. e research also found strong correlation between stock price performance and the likelihood a leader was pressured to quit. CEOs with low push-out scores delivered shareholder returns of around 8 percent in the three years leading up to the news of their departure compared with -42 percent for those with scores suggesting they were terminated. Voluntary separations almost always involve the naming of a permanent CEO, while involuntary exits involve a higher number of interim successors, who are associated with worse financial performance. e researchers' paper, "Firing and Hiring the CEO: What Does CEO Turnover Data Tell Us About Succession Planning?" suggests boards usually appoint an interim leader because they fired the incumbent — not because the incumbent unexpectedly resigned. Another sign the CEO was forced out? ey are more likely to join other ventures as CEO, executive, investor, consultant or founder. CEOs who step down voluntarily are more likely to join the organization's board or retire. Determining whether the incumbent CEO was fired or voluntarily resigned is helpful information to assess the quality of the organization's board and its tolerance for CEO underperformance. In their paper, researchers posit that 4 out of 10 CEOs retain their jobs despite five years of worst-in-class performance based on return on assets. n UF Health Shands CEO resigns By Ayla Ellison G ainesville, Fla.-based University of Florida Health Shands has a new interim leader after CEO Ed Jimenez submitted his resignation, according to WCJB. Mr. Jimenez, who was appointed CEO of UF Health Shands in 2014, resigned in early July, a hospital spokesperson confirmed to WCJB. Mr. Jimenez joined the health system in 2010 and previously served as COO. Jim Kelly, senior vice president and CFO of UF Health Shands, has been named interim CEO. He joined the health system in 2012, according to the report. "Jim has been an invaluable part of the UF Health Shands leadership team for a number of years and has been instrumental in the system's growth and stability," said David Nelson, MD, senior vice president for health affairs at University of Florida and president of UF Health, according to WCJB. "I know that Jim, Chief Operating Officer Traci d'Auguste, Vice President of Finance Bob Thornton and our other hospital leaders will work hard to maintain a culture of excellence, while focusing on our commitment to delivering the highest-quality care possible and a great patient experience for all who seek our help." The health system did not provide a reason for Mr. Jimenez's departure. n Image Credit: Adobe Stock

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