FTSE 100 chief executives are beginning to know how top flight football managers feel in terms of job security.
Today’s abrupt departure of Stephen Kelly, the chief executive officer of The Sage Group PLC (LON:SGE), means that 16% of the companies in the FTSE 100 have jettisoned their chief executives this year.
According to Russ Mould, the investment director at AJ Bell, only 2007 and 2013 have seen more changes this century, with 17 changes at the top among the UK’s corporate elite on each occasion.
“In some ways, this seems odd, as 2000 and 2007 were clearly difficult years and 2013 was testing for certain sectors,” Mould observed.
“The tech bubble burst in the first case and the Great Financial Crisis began in the second, ushering in a recession and a multi-year bear market in share prices in both cases. In 2013, three miners – Anglo American, Rio Tinto and BHP Billiton – all appointed new leaders as they looked to adapt to a new environment of lower commodity prices and shareholder calls for greater capital discipline and debt reduction,” he added.
Compared to big names such as Martin Sorrell (WPP), Adam Crozier (ITV), Moya Greene (Royal Mail) and Stuart Gulliver (HSBC), Kelly’s scalp is especially noteworthy.
Some of those big names have attracted the outspoken ire of shareholders whereas it appears that any misgivings about Kelly’s fitness to continue leading Sage were expressed behind closed doors.
Kelly lasted four years at Sage – Manchester United manager Jose Mourinho tends not to last even that long at most of his clubs – and to keep the football analogy going, there are few Sir Alex Fergusons and Arsene Wengers among the FTSE 100 bosses, with just 11 of the current FTSE chief executives (CEOs) enjoying stints at the top of more than 10 years.
According to Mould, “Kelly’s 46 months in office compare to the current average across the FTSE 100 of 62 (or 5.2 years)”.
“Perhaps this is a reflection of how the underlying economy is still sluggish and generally unhelpful and pressure from investors to perform is all the greater, especially as activist investors are getting results with several interventions in the UK,” Mould suggested.