BSE-listed cos witness a high-profile resignation every nine days: Report
The resignations are not officially attributed to performance and “personal reasons” are invariably cited as the cause, but fall in a company’s quarterly profit mostly coincides with the resignation of a top executive.
June 13, 2017 / 11:46 AM IST
Cut-throat competition in the pursuit of success has cost several top corporate executives their jobs in the last couple of years. Since the start of FY16, 81 senior executives holding positions of Chief Executive Officers, Managing Directors, Chief Financial Officers, and board directors in 500 companies listed on the Bombay Stock Exchange have resigned, according to Prime Database. This means a high-profile executive has called it quits every nine days.
The resignations are not officially attributed to performance and “personal reasons” are invariably cited as the cause, according to a Business Line report. But fall in a company’s quarterly profit mostly coincides with the resignation of a top executive.
For example, drug major Cipla saw a 44 percent year-on-year fall in its net profit for the first quarter of last year. In the aftermath of the poor show, the company’s CEO Subhanu Saxena resigned citing family reasons. Cipla’s Chief Operating Officer (COO) Umang Vohra was then promoted to CEO.
Another top company with a similar story was Cairn India. The oil and gas vertical of London-listed Vedanta Resources saw its Managing Director and CEO Mayank Ashar quit in June 2016 for personal reasons. In turn, CFO Sudhir Mathur was made the CEO of Cairn India.
Ashar’s resignation came a few days after Cairn India extended the repayment period for its USD 1.25 billion loan owed to a group company, according to a Business Standard report.
On the other hand, a chief executive from the hiring company Michael Page told Business Line
that their department for hiring top executives like CEOs, CFOs, and Chief Human Resources Officers, had seen an increase of 15 percent in last 12 months. Since persons holding these positions incur a “high-cost” to the company, they were relieved of their duties owing to poor performance and the resignation was portrayed to be voluntary, he said.