HR & Management
The biggest CEO resignations of 2015 so far
11 min read
23 September 2015
With Volkswagen CEO Martin Winterkorn's resignation coming after the automaker was found to have installed software in its cars designed to cheat on emissions tests, we took a look at some of the biggest CEO resignations that happened throughout 2015.
It is often said that when a company reaches certain growth milestones, rather than business planning and market research, focus turns to who is sailing the ship. This often leads to companies taking on a different kind of captain.
However, a CEO’s departure can also be mired in scandal, whereby they then get fired or forced out by the board. As harsh as it may sound, this happens a lot.
Whatever the reason may be, 2015 has seen quite a few high-profile CEOs hand in their resignations – so we took a look at some of the biggest bosses to have left the helm in 2015 thus far.
(1) Martin Winterkorn – Volkswagen
The world’s second-largest carmaker is being engulfed by an emissions scandal, which has wiped nearly €26bn (£19.06bn) off its market value. Volswagen is said to have been caught cheating on US air pollution tests. The company installed software known as “defeat devices” in the electronic control module of diesel vehicles issued between 2008 and 2015.
Winterkorn has become the public face of the scandal, with allegations suggesting that he ignored warning signs about the emissions in 2014.
He recently resigned, claiming to be “shocked” by the situation. He said he had accepted the “responsibility for the irregularities that have been found in diesel engines and therefore requested the Supervisory Board to agree on terminating [his] function as CEO.
Winterkorn continued: “I am clearing the way for a fresh start with my resignation. The process of clarification and transparency must continue. This is the only way to win back trust.”
He added that he was not aware of any wrongdoing on his part, and was stunned that misconduct on such a scale was possible in the Volkswagen Group.
(2) Ellen Pao – Reddit
On 6 July, more than 150,000 Reddit users signed an online petition calling for Ellen Pao, the site’s interim CEO, to step down. The petition arose after Victoria Taylor, the director of talent who managed the site’s popular Ask Me Anything (AMA) division, was fired. Around 300 discussion areas were also shut down by moderators as a form of protest.
“Action must be taken to prevent Reddit from being further run into the ground,” the petition said. “Stop Pao from destroying the Reddit community by making her step down as CEO of Reddit.”
In answer to a request for comment, Pao apologised for the way the company had handled the transition plan – to no avail. She reportedly received death threats from users angry at her handling of the situation, and in a bid to take the sting out of any acrimony, both Reddit’s board member Sam Altman and Pao wrote pleas for compassion.
Pao urged those users who attacked her to remember that she was “just another human; I have a family, and I have feelings”.
When 200,000 users started calling for her dismissal, Pao resigned only eight months after she started working at Reddit. In a resignation statement, she wrote that she had seen “the good, the bad and the ugly on Reddit. The good has been off-the-wall inspiring, and the ugly made me doubt humanity”.
At the time, Pao said she had left the company because she felt unable to meet the board’s growth ambitions.
(3) Hisao Tanaka – Toshiba
Toshiba had been under fire for months over accounting irregularities until it all came spiralling down. In April, Toshiba itself began investigating accounting practices in its energy division.
There had been concerns that executives were setting unrealistic targets for new operations after worries that the 2011 Fukushima disaster may hit the company’s nuclear division.
A month later, an independent committee took over the review. While the report did not specifically refer to Fukushima, it did say that pressure within Toshiba was strong in the accounting years of 2011 and 2012. Furthermore, it found that the company’s three most recent CEOs had played active roles in inflating Toshiba’s operating profit.
“Within Toshiba, there was a corporate culture in which one could not go against the wishes of superiors,” the report said. “Therefore, when top management presented ‘challenges’, division presidents, line managers and employees below them continually carried out inappropriate accounting practices to meet targets in line with the wishes of their superiors.”
The company said in a statement that there had been inappropriate accounting going on for a long time, and “deeply” apologised for causing trouble for shareholders and other stakeholders. Because of this, Tanaka, alongside the company’s vice chairman, resigned.
Read on to find out about the CEO that simply wanted a career change.
(4) Noel Biderman – Ashley Madison
Personal information about millions of customers on dating site Ashley Madison, including e-mails, member profiles, credit card transactions, showed up online in August. A group known as Impact Team took credit for the hack.
The information was initially only accessible on the dark web, where users use anonymous browsing tools. But soon after the hack, databases showed up on the broader web, allowing people to search through parts of the data – and in the process uncovered some rather high-profile clients.
In addition to a $576m (£376.96m) class action lawsuit already filed in Canada against Ashley Madison and its owner, Avid Life Media, the companies are now also being sued in a US federal court by a man seeking class action status for victims of the breach. The lawsuit accuses Ashley Madison of negligence, invasion of privacy and causing emotional distress.
In the wake of the hack, Biderman announced his resignation.
“This change is in the best interest of the company and allows us to continue to provide support to our members and dedicated employees,” he said. “We are steadfast in our commitment to our customer base. We are actively adjusting to the attack on our business and members’ privacy by criminals. We will continue to provide access to our unique platforms for our worldwide members.”
(5) Anshu Jain and Jürgen Fitschen – Deutsche Bank
Since taking over from previous CEO Josef Ackermann, Jain and Fitschen had allegedly bounced from one crisis to the next, with many of the problems emanating from the investment-banking unit Jain ran.
The bank repeatedly fell short of its own profit forecasts. The executives said the bank had plenty of capital, only to go to shareholders for more funds, first in 2013 and then again in 2014. In April, the bank was forced to pay about $2.5bn (£1.64bn) and to plead guilty to resolve accusations that its traders tried to rig benchmark interest rates.
Adding to the pressure was that co-CEO Fitschen was on trial in connection with the collapse of the Kirch media empire in 2002, whereby he was accused of giving false testimony.
Jain soon resigned, with co-CEO Fitschen following suit. It was said that Jain’s decision was driven largely by criticism over the bank’s decision to cut jobs and close many branches, one person said. He also felt his inability to speak fluent German was a barrier to engaging shareholders at the bank’s annual meeting.
Deutsche Bank chairman Paul Achleitner claimed that Jain and Fitschen’s “decision to step down early demonstrated impressively their attitude of putting the bank’s interests ahead of their own.”
(6) Val Keating – Barclaycard
In a statement issued by Barclays in May, the company suggested that CEO Val Keating quit her post in order to pursue a “new professional challenge” after five years of service.
The bank did not give a date for her departure or say where she might be headed. She planned to stay with the lender for a period to help with the transition.
Under Keating, the business has tried to be in the vanguard of technology-led innovation, although initiatives such as its bPay payments wristband are being overhauled after trials met with mixed results.
Her tenure has been a clear financial success, however, with profits from Barclaycard soaring since 2009.
“I feel the time is right to find a new professional challenge,” Keating said in a press release. “I could not be more proud for having led this business during this important chapter in its history and look forward to seeing what Barclaycard will achieve during this next chapter.”