(Tea Party 247) – We have witnessed, over the last three weeks, the most devastating stock market crash in history along with the biggest public health crisis in a generation.
At the same time, hundreds of CEOs have been resigning at a rate never seen before.
What is going on?
The End of the American Dream asserts that “corporate insiders also sold off billions of dollars worth of shares in their own companies just before the stock market imploded.”
In life, timing can be everything, and sometimes people simply get lucky.
But it does seem odd that so many among the corporate elite would be so exceedingly “lucky” all at the same time.
In this article I am not claiming to know the motivations of any of these individuals, but I am pointing out certain patterns that I believe are worth investigating.
In November, NBC News described a “great CEO exodus” that at that point was just starting to take place:
Chief executives are leaving in record numbers this year, with more than 1,332 stepping aside in the period from January through the end of October, according to new data released on Wednesday. While it’s not unusual to see CEOs fleeing in the middle of a recession, it is noteworthy to see such a rash of executive exits amid robust corporate earnings and record stock market highs.
Last month, 172 chief executives left their jobs, according to executive placement firm Challenger, Gray & Christmas. It’s the highest monthly number on record, and the year-to-date total outpaces even the wave of executive exits during the financial crisis.
By the end of the year, a record 1,480 CEOs had abandoned their posts.
At the time, it seemed likely that the booming, record-breaking stock market was to blame and these CEOs just knew when to fold ‘em.
While a slow-down was being anticipated, an economic recession of this magnitude was never projected.
Here are the names of the CEOs who stepped down in 2019:
Dennis Muilenburg — Boeing
United Airlines — Oscar Munoz
Alphabet — Larry Page
Gap — Art Peck
McDonald’s — Steve Easterbrook
Wells Fargo — Tim Sloan
Under Armour — Kevin Plank
PG&E — Geisha Williams
Kraft Heinz — Bernardo Hees
HP — Dion Weisler
Bed, Bath & Beyond — Steven Temares
Warner Bros. — Kevin Tsujihara
Best Buy — Hubert Joly
New York Post — Jesse Angelo
Colgate-Palmolive — Ian Cook
MetLife — Steven Kandarian
eBay — Devin Wenig
Nike — Mark Parker
Then, during the month of January 2020 alone, a stunning 219 CEOs stepped down.
At this point, End of the American Dream explains:
…It was starting to become clear that the coronavirus that was ripping through China could potentially become a major global pandemic, and I certainly can understand why many among the corporate elite would choose to abandon ship at that moment.
Some of these CEOs have made absolutely absurd salaries for many years, and it is much easier to take the money and run than it is to stick around and steer a major corporation through the most difficult global crisis that any of us have ever experienced.
Here are the CEOs who stepped down in 2020…so far:
Bob Iger, CEO of Disney
Ginni Rometty, CEO of IBM
Harley-Davidson CEO Matt Levatich
T-Mobile’s CEO John Legere
LinkedIn CEO Jeff Weiner
Mastercard CEO Ajay Banga
Keith Block, co-CEO of Salesforce
Tidjane Thiam, CEO of Credit Suisse
Hulu CEO Randy Freer
It is important for me to say that I do not have any special insight into the personal motivations of any of these individuals, and every situation is different.
But I do think that it is quite strange that we have seen such an unprecedented corporate exodus at such a critical moment in our history.
Meanwhile, top corporate executives were dumping billions of dollars worth of shares in their own companies just before the market completely cratered. The following comes from the Wall Street Journal…
Top executives at U.S.-traded companies sold a total of roughly $9.2 billion in shares of their own companies between the start of February and the end of last week, a Wall Street Journal analysis shows.
The selling saved the executives—including many in the financial industry—potential losses totaling $1.9 billion, according to the analysis, as the S&P 500 stock index plunged about 30% from its peak on Feb. 19 through the close of trading March 20.
In the stock market, you can only make money if you get out at the right time, and the corporate elite seem to have very good timing, don’t they?
Perhaps they just got really lucky. Or perhaps they were reading my articles and understood that COVID-19 was going to cause the global economy to shut down. In any event, things worked out really well for those that were able to dump their stocks before it was too late.
And it turns out that several members of Congress were also selling stocks just before the market went nuts…
Sen. Dianne Feinstein of California and three of her Senate colleagues reported selling off stocks worth millions of dollars in the days before the coronavirus outbreak crashed the market, according to reports.
The data is listed on a U.S. Senate website containing financial disclosures from Senate members.
Of course most ordinary Americans were not so “lucky”, and the financial losses for the country as a whole have been absolutely staggering.
The good news is that there was a tremendous rally on Wall Street on Tuesday, and that will provide some temporary relief for investors.
But the number of confirmed coronavirus cases continues to escalate at an exponential rate all over the globe, and this crisis appears to be a long way from over.