A Message To CEOs Who Are Chronic Underperformers: Step Up By Stepping Down

April 28, 2014 Vince Molinaro

CEO obligations


If you learned that 38% of your employees were chronically poor performers, you’d be moving fast to fix the problem. Yet, a recent report released by The Institute for Policy Studies, called Executive Excess 2013 – Bailed Out Booted Busted, documents that 38 % of CEOs studied (of 500) perform poorly – and little is being said or done about the problem.

To be sure, some of those underperforming CEOs end up getting fired, but all too often, their companies pay massive fines or costs – or need to be bailed out. Or simply go under.

Many of the poor performers represent some of the highest-paid CEOs in the world. And many walk away after they were bailed out, booted or busted with huge severance packages.

Personally I don’t have an issue with CEO compensation when the individual is a strong and consistent high performer. I’ve worked with many of these CEOs and I know the tremendous value they create in terms of strengthening the economy, creating jobs for thousands and providing valuable products and services. These CEOs are not the problem. They are great leaders.

The problem lies with the CEOs who are the chronic poor performers. They tarnish the great work of the hard working and high performing ones.

Now I understand that being a CEO isn’t easy. Forces in the global economy such as aggressive competitors, shareholder and market expectations, increasing customer demands and shifting employee demographics all come together to make that one tough job.

In my new book, The Leadership Contract, I state that leadership is an obligation. CEOs who are chronic underperformers have forgotten that. They don’t appear to think of their roles as an obligation, but rather as an entitlement. For more, check out my new video on leadership as an obligation.

So if you are a CEO who is a chronic underperformer, do what’s right! Be a real leader. Step up by stepping down. Accept that you haven’t succeeded and leave with no severance. You wouldn’t reward an employee who was a chronic poor performer, why should we reward a CEO who is?

Follow me @VinceMolinaro

About the Author

Vince Molinaro

Vince Molinaro is the Global Managing Director of Strategic Solutions at Lee Hecht Harrison. He is also the author of The Leadership Contract – a New York Times and USA Today bestseller. Vince has spent more than 20 years as an adviser to boards and senior executives looking to improve leadership in their organizations.

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