Restaurant CEO Turnover Is Making History, Barclays Says
Restaurant CEO Turnover Is Making History, Barclays Says
(Bloomberg) -- The amount of first-time chief executive officers at the biggest U.S. fast-food restaurants is setting a precedent, Barclays said.
“We have not had a period in history when many of the largest were led by first-time CEOs,” analyst Jeffrey Bernstein said.
Analysis shows that the seven largest restaurants by market value in the quick-service and fast-casual spaces covered by the firm saw CEO turnover in less than three years. Those include Chipotle Mexican Grill Inc., McDonald’s Corp. and Starbucks Corp.
Broadly speaking, succession planning has been the key to stability. With the exception of Chipotle, internal promotions occurred at the companies. And all of the changes but one -- the surprise departure of Steve Easterbrook at McDonald’s -- were planned.
The length of a CEO’s tenure doesn’t determine success in same-store sales growth, profit growth or stock performance, Bernstein said.
“The outgoing Dunkin’ CEO held the seat longer than any of the non-founder led concepts, yet the company performed near the bottom at each of the metrics,” he said.
Meanwhile, many of the incoming CEOs in the fast-casual space appear to be finding early success, Bernstein said. For example, Chipotle shares are up 92% year-to-date and Starbucks is up 36%. Those compare to the 27% gain in the S&P 500.
When including small- and mid-cap companies, the number of CEO changes is even higher, as it includes Jack in the Box Inc., which announced this month that it’s looking for a new leader.
The other companies on Barclays’ turnover list include Restaurant Brands International Inc. and Yum Brands Inc., where incoming CEO David Gibbs will be installed next month.
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To contact the reporter on this story: Andres Guerra Luz in New York at aluz8@bloomberg.net
To contact the editors responsible for this story: Catherine Larkin at clarkin4@bloomberg.net, Will Daley, Lisa Wolfson
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