Uneasy lies the head that wears a crown, especially when that head heads an underperforming public company. Admittedly, if you're a CEO in such a situation, at least you'll be provided with an enormous severance package -- but that's a distinct consolation prize for the types of people who end up in C-suites. As Motley Fool Money host Chris Hill previews 2019, he looks to Ron Gross and Jason Moser for a few predictions as to which golden parachutes are most likely to deploy this year.
In Moser's view, Under Armour (NYSE:UAA) (NYSE:UA) CEO Kevin Plank remains in trouble. Gross, on the other hand, says Wells Fargo (NYSE:WFC) CEO Timothy Sloan is continuing to prove himself the wrong choice to solve the major problems that the bank inflicted upon itself. In this segment from the podcast, they explain why they're bearish on these leaders in particular.
A full transcript follows the video.
This video was recorded on Jan. 4, 2019.
Chris Hill: Happens every year, Jason. There are a few CEOs who are on the hot seat. We're long-term investors, but let's face it: over the long term, if you're not delivering, that means in the short term, you're on the hot seat. What do you have?
Jason Moser: In 2018, I certainly had Kevin Plank of Under Armour on the hot seat. He's not off yet. I'm calling him out again. While we are seeing signs that he is embracing relying more on his team, particularly the CFO and COO of the company, Frisk and Bergman, when you look at the expectations we've had for this business over the course of the last several years, as it's been a recommendation in a number of our services, this has been a phenomenal disappointment. The real disappointing part there is, they were essentially self-inflicted. They just made some dumb investments for the sake of growing as opposed to making good strategic decisions and letting the growth come from making good decisions.
I think he's on the right track. We need to make sure that team stays intact here. If we see that CFO or COO leave, we have a really big problem. But at this point, with the market seeming like it wants to recover, if we don't have a recession, this is a company that should be performing a lot better than it is today.
Hill: What about you, Ron?
Ron Gross: I think Wells Fargo's CEO, Timothy Sloan, probably should go. He was probably the wrong choice from the get go, as he's been at the company during all of the controversies. Having taken over the CEO role in 2016, he's really not done anything to turn the tide. From an operations perspective, the company's not really doing very well. From a controversy perspective, as well, things don't seem to be getting better. I think it's time for some outside blood to come in and right the ship.
Hill: I think back to last year's show. I mentioned that John Flannery, who was CEO of General Electric at the time, I mentioned that he was certainly a CEO to watch because I thought he was laying all his cards on the table. I thought, "Boy, this is going to be a really interesting company to watch." In hindsight, I probably should have said he was on the hot seat. I didn't think he was on the hot seat! Then he didn't make it to the end of the year.
Chris Hill owns shares of Under Armour (A Shares) and Under Armour (C Shares). Jason Moser owns shares of Under Armour (A Shares) and Under Armour (C Shares). Ron Gross has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Under Armour (A Shares) and Under Armour (C Shares). The Motley Fool has a disclosure policy.