Sitting with a friend from school many years talking about what happened to the SP 500 in the bear market years from 2000 to 2009, (this friend was an advisor with a small firm in Cincinnati), and I remember him making the statement about reputable, highly-regarded CEO’s that had seen outsized stock performance (usually during secular bull markets) resigning their positions, and the stock price ultimately suffering because of it.
My guess is that the discussion probably had something to do with General Electric (GE) since GE had a presence in the Cincinnati business community, and when Jack Welch retired from GE, the stock price also suffered after GE peaked at a $500 billion market cap in early 2000.
Welch’s reputation was somewhat diminished after the period under Jeff Immelt found that Welch was doing “earnings smoothing” using GE Capital as the source of the earnings grease. (For what it’s worth I read Jeff Immelt’s “Hot Seat: What I Learned Leading a Great American Company” and Jeff was dealt a tough hand of cards, 9/11, the Gulf War and ultimately the real estate issues of 2008. It probably didn’t help that Jeff was a salesman for most of his time at GE, rather than an operator. )
Bill Gross of PIMCO had warned on GE several times in the late 1990’s, and all of Bill’s fears came to fruition in the ensuing decade from 2000 to 2009. If memory serves correctly Bill Gross was concerned about GE’s over-reliance on commercial paper funding, and thus the credit rating.
Andy Grove (Intel): Andy resigned as Intel’s CEO in 1998, and assumed the Chairman’s role until 2002, and then left Intel entirely after that point. It’s probably not a great comparison to use any large-cap tech company from the late 1990’s, early 2000’s, but Andy did get out two years early, with the stock peaking at $75, in September, 2000. His famous mantra “Only the Paranoid Survive” ultimately became a book. Bill, Gates, Steve Balmer, John Chambers (Cisco), and even Michael Dell (DELL) hung around through the 80% decline in the Nasdaq from March, 2000, through late 2002.
Doing a post-mortem on Intel’s financials after the tech crash, Intel had a section on their balance sheet titled “Long-Term Investments” which became quite sizable in the late 1990’s, and after I looked at the balance sheet progression, Intel was liquidating these investments quite heavily in late 1999, through 2000. (Have no idea whether these were public or private equity, or probably both.)
Jeff Bezos (Amazon): Amazon peaked in early July ’21 at $188 per share, after Jeff Bezos formally resigned Amazon’s CEO position on July 8, 2021. The press release was sent on May 26th ’21. The bear market in Amazon lasted roughly 36 months as the stock regained the $188 – $190 level in early July ’24.
The interesting aspect for me (as a long-term holder of the stock), is that Jeff resigned the very last year that Amazon achieved “+20% revenue growth” for the ecommerce giant. Since 2021, or rather from 2022 to 2024, Amazon revenue growth has averaged 11%, and the analyst consensus expectations reflect an an “expected” average 9% revenue growth for Amazon from 2025 through 2027.
Jeff Bezos likely knew that Amazon’s secular revenue growth of +29% from 2002 through 2021 was slowing.
Fred Smith (Fedex): Fred resigned as FedEx’s CEO in June, 2022, with the stock trading right around $215 – $220 per share, (which is pretty close to where’s its trading today, 3 years later at $227 per share), with Raj Subramanium named to replace Fred Smith as the new CEO. FedEx has undergone a couple of important transformations including consolidated reporting as one business, without the breakout of FedEx Express, Ground, and Freight, as well as targeted cost cutting in what is a very capital-intensive business. After peaking in late ’24 near $300, FedEx (the stock) took gas after the December ’24 earnings release.
Without Fred Smith as CEO, the stock has broke even under Raj Surmanium.
Berkshire Hathaway (Warren Buffett):(BRKB): While some positions are still held for clients who are very sensitive to capital gains, most of the Berkshire Class B shares have been sold as Warren Buffett announced that he was naming Greg Abel as CEO and assuming the role of Chairman at Berkshire Hathaway, after his 60-year tenure as CEO.
Not only was Mr. Buffett CEO for 60 years, but he was Berkshire’s founder (as the holding company, not the textile mill) and was one of the greatest investors of the 20th Century. Probably a very under-rated feature of Berkshire was the culture, likely set by Mr. Buffett and maybe partially by Charlie Munger, which was apparent after David Sokol was asked to leave Berkshire after the Lubrizol buyout, since Sokol never disclosed a substantial personal position in the Lubrizol stock price as he pushed for a buyout of the company.
As truly iconic and highly-regarded as Mr. Buffett is, there is no way that company remains as substantial as it has for the last 60 years, regardless of how capable and competent Greg Abel and Anit Jain turn out to be.
IBM (IBM): Ginny Rometty succeeded Sam Palmisano, on January 1, 2012. Palmisano was IBM’s CEO from 2002 through 2011. What’s interesting about Palmisano’s tenure was that from January 1, 2002 through December 31, 2011, IBM’s stock price “annual” return was 5.67% versus the SP 500’s total return of +2.92%. Sam Palmisano outperformed the SP 500 by nearly double, in one of the toughest periods of investing since the 1930’s.
Ginny Rometty didn’t fare as well – not all her fault either – since she was named IBM’s CEO just as the “cloud” was really starting to gain steam as a technology wave or iteration that is still happening today. It’s probably no coincidence that IBM’s share price peaked on or around mid-April, 2013, at $215 per share, just as Microsoft’s share price bottomed in April, 2013, with release of their fiscal Q3, 2013 earnings.
If we measured total returns of both stock prices and the SP 500 for April 15, 2013 through 12/31/2019, here’s the numbers:
- IBM: -3.33% annual return
- SPXTR: +13.86% annual return
- MSFT: +31.94% annual return
Maybe Sam Palmisano wasn’t your typical iconic CEO, because he didn’t have the secular bull market to support him, but his departure was a sign for shareholders to evaluate or re-think their position in IBM.
Summary / conclusion: Thinking about current CEO’s today that you would have to think might see a succession issue, Jamie Dimon comes to mind. Jamie has been JP Morgan’s CEO since 2006, and one of the top 10 CEO’s (in my opinion, outside of his horrid economic forecasting record) in the SP 500 in the last 20 years.
From January 1, 2006, JP Morgan’s (JPM) common stock has returned +13.14%, versus the SP 500’s +10.47% (as of May 31 ‘2025.) (All returns sourced from YCharts.)
Really, looking at the top 10 – 15 names in the SP 500 by market cap and you’d get a who’s who of and outstanding CEO’s at that. The only one of the Top 10 market cap names I’m completely unfamiliar with is Broadcom (AVGO), but the other 9 names, you could name the company, and most investors would recognize the CEO, or vice versa.
And the longer a CEO is at the helm, like a Berkshire, or FedEx, or a JP Morgan, it’s likely the bigger the issue when that CEO leaves.
None of this is advice or a recommendation, but only an opinion. Past performance is no guarantee of future results. None of this information may be updated, and if updated, may not be done so in a timely fashion.
Thanks for reading.