Barron's Reporter Sabrina Escobar joined Closing Bell to break down the mass exodus of chief executives at big-name companies in the first half of 2022, including the recent CEO change at Bed Bath & Beyond, following a dismal earnings report.

Closing Bell

Hundreds of U.S. Companies Oust CEOs Amid Stock Market Slump

Welcome back to cheddar news is closing bell. Everyone I'm Kristen Schouler down here on the floor of the stock exchange and a growing number of ceos are stepping down from companies across a wide range of industries as their stocks sing to multi year lows? Well the latest being retail staple bed bath and beyond and social media sites Pinterest which did show their executives the door joining me now is Baron's reporter Sabrina, escobar Sabrina is good to see you. So it does seem that despite the problems being largely tied to macro economic factors, many stocks are down the C. E. O. S are on the chopping block. What does this mean for investors? But Kristin, thanks for having me. This means several things. So for many of these companies that have kind of shown their door to their CEOs, investors are looking for something to revitalize the stock. It's been, as you said, a very challenging time for the stock market and there's been a lot of volatility. But for many companies, this is just a way to secure a more sustainable ceo transition. Um, now before things get worse if for example, there's a recession coming up on and it can also just kind of inject a little bit of vitality to the stock In some cases. So I do want to talk about bed bath and beyond. We'll focus on that one. First Sabrina of course, first quarter sales down 25% from the same time a year ago losses increasing by some 600%. I mean these are drastic numbers in bed bath and beyond case. How are these retailers who sell non essential items doing right now is consumer spending holds back. I mean some might argue bed bath and beyond is essential items, but we know it's a tough landscape out there. Well, Bed Bath and beyond is interesting because they have been struggling for so many quarters. That's actually why the ceo was brought on in 2019 because he was going to try to revitalize a bit of the company's strategy and tried to transition to what is called an Omnichannel model, start incorporating digital with online. And when the pandemic happened, that really changed things up for retailers, which as you mentioned, are kind of based on discretionary spending? A lot of sales were pulled forward up to 2021 and 2020 when people just didn't have to spend on experiences are going out and now that consumer spending is um is pulling back, it'll be painful for most of these retailers that did make so much of their revenues, you know, pop over the last couple of quarters. Right. Um and so your reporting here Sabrina showing that from the beginning of this year january to May 100 US public Companies ceos left their post. Um And that data actually from the workforce consulting from Challenger Gray and christmas, what other data do you have to show that this is dramatic and what's exactly behind it. Right. Well, I mean, I just think when you think about the magnitude of the companies that are announcing um that their executives, not just Cdos, but C suite executives are transitioning I think is is just very overwhelming. So as you mentioned before, Pinterest was reported that their ceo is leaving. But you also have things such as, cos this is a real real meta platforms and amazon dot com announcing the departure of some very high level executives. And actually if you look at the Challenger Gray and christmas study thinking about it on a more Macro level, even beyond public companies, there were over 600 ceos that left both combining public and private companies over the course of this time period. And that is a very high number compared to past years according to this study. I mean is it just simply, can you infer Sabrina that is just simply a sign of the times right that pretty much all stocks are down growth stocks down dramatically and to some extent um you know these these Ceos that are getting pushed out can't necessarily control the macro economic environment. What's your take? Well, I think it's true that one Ceo is going to be very hard pressed to control the entire macroeconomic environment as you mentioned. But um you know, there are some companies that have retained their Ceo, so for example, Disney just renewed their contract with bob just over the last week. And so for them they're kind of seeing a stability in keeping their old Ceo as opposed to transitioning to somebody new, which is always a risk, right, when you don't really know who you're dealing with and how they're going to navigate the company. But um, but I do think that there's a lot of reasons that the Ceos are leaving and whether they're being outside of their choosing to leave, um, for many of these companies, there's probably a lot else happening outside of the macroeconomic environment that is, you know, contributing to the ceo departure. Okay, we're gonna leave it there, Barons Reporter Sabrina, escobar. Sabrina thanks so much for coming on.