The departure of the CEOs of WeWork and Juul suggests that the market may be tired of overprivileged chief executives.
It may be too early to say that these departures herald a change in attitude among venture investors and public markets toward deeply entrenched CEOs, especially those with money-losing business plans supported by promises of profits in the remote future.
There are no signs, for example, that the position of Facebook’s founder and CEO Mark Zuckerberg is compromised, despite a series of breaches of user privacy and proliferating questions about the company’s role in spreading political disinformation. Zuckerberg’s holdings of supermajority shares make him almost impossible to dislodge, and in any case, Facebook remains spectacularly profitable.
Peloton launched its initial public offering Thursday and closed down more than 11% from its IPO price. Its founders, management team and other insiders, including founder and CEO John Foley, continue to hold 99.1% of the company’s voting power, thanks to shares carrying 20 votes each that aren’t available to the public. Peloton lost $246 million on revenue of $719 million in its fiscal year ended June 30.
Keep an eye on Peloton. It’s presenting itself as a world-changing company, it’s got an entrenched management, and it’s a money-loser. With We’s struggle in mind, Peloton CEO Foley may want to keep his severance package up to date.
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