The quest for revving up corporate performance has cost a host of C-suite executives their jobs in the past two fiscal years. According to data compiled by Prime Database, 81 senior executives at BSE500 companies – including CEOs, MDs and board directors – resigned from their positions from the beginning of FY16 till date.
While resignations can never be wholly attributed to performance alone, and are almost always explained by companies as for “personal reasons”, many of these exits came close on the heels of poor quarterly earnings.
For example, Subhanu Saxena quit as chief executive of Cipla last August, after the drugmaker’s profits in the June 2016 quarter nearly halved. Shantanu Khosla stepped down as MD of Procter & Gamble India, which was losing market share in several of its businesses.
Cipla said Saxena had stepped down to “attend to emergent family priorities”. P&G did not give a reason for Khosla’s exit.
A top executive at head-hunting firm Michael Page said Page Executive, the company’s division focussed on C-suite hiring, had seen a 15 per cent uptick in the past 12 months, with companies asking it to fill vacancies for CEOs, CFOs, CHROs and for the heads of engineering and manufacturing. “A C-suite executive is a high-cost element for an organisation; so if their performance is not consistently improving, they are asked to leave. The exit is often made to look voluntary,” said Pranshu Upadhyay, Director, Michael Page.
Senior executives are now under pressure, with companies open to a lot more public scrutiny than ever before, said Rituparna Chakraborty, Executive Vice-President and Co-Founder, Teamlease Services Ltd. “We’re seeing a shift from entitlement- to a performance-driven culture; seniority offers no job guarantee.”
At the close of FY17, large macroeconomic problems persisted, including bad loans and declining capital expenditure. A December 2016 research report by Crisil found that revenue growth for India Inc had stagnated at an average of 1.4 per cent in the preceding eight quarters.
Many have also lost their jobs to controversy. In July 2015, Etienne Benet was replaced as head of Nestle India while the FMCG major struggled in the aftermath of a government ban on its flagship Maggi Noodles brand, which had tested positive for excess lead content.
“At the CXO level, when companies come to us, they’re looking for those who won’t rest on their laurels and can respond quickly to exigencies,” said Chakraborty.
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.