A few weeks after being battered through a Congressional hearing, the 31-year veteran of the bank said he had decided to retire after becoming too much of a distraction, and was replaced by the general counsel on an interim basis.
A CEO’s departure is often a complicated, political process, as boards, executives, and consultants juggle various interests and the language used to describe a departure is one of the finer points.
“It’s interesting to see what the public language is when a CEO is leaving,” said Andy Challenger, a VP at consulting firm Challenger, Gray, & Christmas, which tracks CEO departures. “Stepping down is the most common, retirement common, resigned is another term they’ll use.”
The word chosen has weight. According to Challenger, executives can usually frame their own departures, and each option has different connotations depending on what they want to do next and how much face they want to save.
“A lot of times boards and companies will leave it up to the CEO how they will want to frame their departure. If a CEO chooses to retire, that can seem like it was your choice, it was time for you to go,” said Challenger. “Stepping down does take on more of ‘this job isn’t working out for me’ connotation.”
Executives can save face by “retiring,” but by definition, it has one big downside — the acknowledgement that the main act of a career is over. Generally, according to Challenger, CEOs who have “retired” generally stick to spots on boards or accepting an interim CEO job in the short term should the need arise and the services match.
In Sloan’s case, he’s only 58 — still young enough to have another act if he wants to. But after a full 31-year career at Wells Fargo with many of those years in charge of parts of the bank, the baggage associated with being a decision-maker and supervisor at Wells Fargo might have made it difficult to find a similar job as a chief executive or corporate president anyway. And with that entire career at the same bank, retirement has a ring to it that reflects Sloan’s decades of service.
Similarly, Sloan’s predecessor John Stumpf also chose to “retire,” and did so after 34 years of service.
Challenger, Gray & Christmas tracks CEO departures of companies that have been in business for at least two years with at least 10 employees, and found some interesting stats. In the first two months of 2019, Challenger said 124 had stepped down, 75 had “retired,” 27 had “resigned,” and 23 had taken a new position in a new company.
Between 2014 and 2018, the numbers even out a bit more: During this time, 1,689 had “retired,” 1,466 had “stepped down” 1,437 had “resigned,” and 646 had taken a new position in another company. (During this time, the average CEO tenure was 11.4 years.)
Of course, there are other reasons for departures. In Challenger, Gray & Christmas’s data: “terminated” (154), “no reason given” (100), “another position within company” (90), “deceased” (49), and “scandal” (45) among them.