There were 21,251 total changes in board director and officer positions in 2016 per 8-K item 5.02. Of those D&O changes, 1,022 involved CEO departures and 1,169 involved CFO departures. While not given in every filing, a reason for the departure is included in many disclosures. Of the reasons that were disclosed, here are the top 5 for both CEOs and CFOs:
For CEOs, the most common reason for a departure in 2016 was related to a position change within the company. Often this manifests as a CEO resigning from the position but staying on as a member of the board, or when an individual filling in for the CEO on an interim basis returns to their ordinary duties.
The most common reason for a CFO departure is for another opportunity outside of the company. Considering also that the fifth most common reason for CFO departures last year was to pursue other interests, it seems that CFOs are far more likely than CEOs to voluntarily cut ties with an employer.
Every once in a while, in reviewing the thousands of 8-K filings that compile this database, we come across some particularly noteworthy filings. Recently filed on April 17, Adcare Health Systems, Inc disclosed the termination of their CEO and Chairman, William McBride III, after an internal investigation that concluded:
Mr. McBride intentionally misrepresented his educational credentials to the Board by indicating that he had an MBA degree from the University of California Los Angeles, which he does not; and (ii) Mr. McBride then allowed the same false information to be (a) included in a press release issued by the Company on October 13, 2014, which was then furnished as an exhibit to a Current Report on Form 8-K filed by the Company on October 17, 2014, and (b) incorporated into the biographical information with respect to Mr. McBride that appeared on the Company’s website.
Another recent noteworthy filing involves the resignation of Synchronoss Technologies Inc CFO, John Frederick, effective April 27, after joining the company on just February 27. Per the separation agreement, “the company agreed to a lump-sum severance payment equal to $1.2 million.” Not bad for two months as CFO.
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