No one is immune to putting their foot in their mouth, not even the CEOs of major corporations. These moments of poor judgment are exacerbated when they come at the end of an executive’s tenure, or they force a company to remove themselves and leave others to pick up the pieces. Whole Foods CEO John Mackey is leaving in September, yet that didn’t stop him from making potentially inflammatory comments about his employees and the state of modern business before his exit. Amazon has not commented on Mackey’s statements, although they are not the first to have to do damage control. In the past companies like Papa Johns, McDonald’s, and American Apparel have faced similar issues with occasionally devastating consequences.
It is unclear what Whole Foods will do following Mackey’s departure, though there will surely be some changes made. Mackey has not made headlines since his 2009 comments about Obamacare that led to boycotts. Cancellation could be coming for the company again, yet the bigger issue will be his comments that young people don’t want to work and that they must earn the privilege to do meaningful work. The retailer depends on young employees at their grocery stores, and they will need to distance themselves from these comments, especially when we consider the current labor shortage.
Papa Johns founder and former CEO John Schnatter stepped down in 2017 after he faced criticism for blaming the NFL, a longtime sponsorship partner, and National Anthem protests for the poor sales at the pizza chain. Audio of Schnatter using a racial slur on a conference call was also released and Papa Johns was left with an image issue. They responded in part by dropping the apostrophe from their name, altering their branding, and making investor and former NBA player Shaquille O’Neal the new public face of the company.
McDonald’s also faced questions when it was revealed that their longtime CEO Steve Easterbrook had an inappropriate relationship with a female employee. McDonald’s and Easterbrook attempted to save face by agreeing to a “without cause” separation that would allow Easterbrook to keep his stock-based benefits. In 2020 the company discovered that Easterbrook had lied about his singular inappropriate relationship and in fact he had engaged with multiple other female employees. McDonald’s has reached a settlement with Easterbrook; however, the company has faced bad press over a perceived culture of sexual harassment. Multiple lawsuits have been filed by employees at various management levels and McDonald’s is still working to implement new standards to remove this behavior from the workplace.
American Apparel is another company that faced image problems because of their CEO, though the company’s fate has been far worse than their contemporaries. Dov Charney founded American Apparel in 1989 and made sure the company was known for more than just their American made clothes. Charney’s overtly sexual advertising campaigns drew criticism, yet he got a pass as long as the company was successful. Eventually sales began to decline, and it was revealed that Charney was facing multiple sexual harassment suits. The lawsuits, risqué advertising, and poor business decisions had tarnished the company’s name and Charney was forced out in 2014. The damage was done, and American Apparel filed for bankruptcy in 2015 and then a second time in 2016. American Apparel is still in operation; however, they have been relegated to an online retailer and most of their products are no longer produced in America.
CEOs are responsible for driving corporations into the future, yet sometimes they run them straight into the ground. Bad investments happen sometimes; however, when a CEO’s personal statements or misconduct gets involved, the damage can be irreparable. It is unclear how difficult it will be for Whole Foods to overcome the statements made by their departing CEO. Matters could become even worse as John Mackey has indicated that his recent comments are the first of many and we are likely to hear more headline worthy statements following his departure in September. Going out on a high note is a difficult act for some executives.