Phrases for Making an Exit
By Katie Hafner
New York Times
Saturday, December 23, 2006
It is a turn of phrase with a long tradition, spun from
corporate boardrooms in all seeming sincerity — no winks, no
nods — just the sober announcement.
“Dear shareholder and John Q. Public: our trusted executive
is resigning to spend more time with family.”
Sometimes it is actually true. The family tug is strong,
especially this time of year. But with large severance
packages and corporate images frequently at stake, more
often than not the phrase is part of a carefully scripted
termination agreement, filled with nondisparagement and
The executive agrees to such terms readily after having been
fired or quitting under a cloud. In extreme cases, the
phrase is even trotted out in the midst of an investigation
into criminal activity.
“There are two code expressions: One is the ‘spending more
time with your family’ line and the other is ‘leaving to
pursue other interests,’ ” said Hal Reiter, chairman and
chief executive of Herbert Mines Associates, an executive
recruiting firm in New York. “But who are they kidding?”
While it’s impossible to determine the degree of sincerity
in each case, recent examples are illuminating. Design
Within Reach, for example, perhaps to cover all bases,
announced in May that Tara Poseley, its chief executive, was
resigning “to spend more time with family and pursue other
Five months after leaving, Ms. Poseley was named president
of Disney's retail stores. She could not be reached for
Executives at Sprint Nextel, eBay and 3Com have used the
family line in 2006. Over the last five years, executives
at Enron, Kmart, Zales, Qwest, Pepsi, DoubleClick and others
have expressed a need to “spend more time with their
families” as a reason for their departures.
For their part, most of the executives and corporations
contacted for this article chose to remain mum on the
subject. And with huge severance payouts at stake it is
easy to see why.
An examination of termination agreements, which are required
by regulators and posted online, reveals, for example, that
Zales stipulated that it “may suspend any payments” to its
chief executive, Beryl B. Raff, who resigned in 2001 in the
wake of disappointing results, should she discuss the
matter. She walked away from Zales with a $2.5 million
On the day Ms. Raff left, she told a reporter: “Well, this
afternoon I’m going to be driving carpool. And my son’s
very excited about that.”
Three months later, after the excitement over the carpool
had apparently died down, Ms. Raff started a new job as a
senior vice president at J. C. Penney. Through a J. C.
Penney spokeswoman, Ms. Raff, 55, declined to comment.
Companies as well have a vested interest in drawing up
airtight severance agreements. The Missouri Law Review
found in 2004 that employment and labor litigation accounted
for 12 percent to 14 percent of all federal litigation.
And by Dec. 1, this year had already surpassed 2005 for the
number of chief executive changes, according to Challenger,
Gray & Christmas, the recruiting firm.
The “family time” line is popular in spheres beyond
business, of course. Politicians, even those in the thick
of scandal, routinely cite a desire to spend more time with
family when they resign from office.
And in a twist on the sentiment, in 2005, a state senator,
John N. Ford, 64, a member of one of Tennessee’s most
powerful political families, resigned after he was arrested
on charges of taking bribes. He said he planned “to spend
the rest of my time with my family clearing my name.” Mr.
Ford has pleaded not guilty in that case and his trial is
set for February. This week a grand jury in Nashville
unsealed a new, unrelated indictment, accusing him of taking
more than $800,000 in consulting fees from contractors
working for a state Medicare program. Mr. Ford also denies
the new charges.
The line gained momentum among executives in 1997, when
Brenda C. Barnes announced at age 43 that she was leaving
her job as chief executive of Pepsi-Cola North America to
devote more time to her three young children. While her
announcement led to an intense public debate about women who
feel torn between their ambition and their families, it also
sanctioned the use of the phrase.
Ms. Barnes never entirely quit the corporate world. Shortly
after leaving Pepsi, she served as interim president for
Starwood Hotels and Resorts for six months, and took seats
on several corporate boards, including The New York Times
In 2004, when her children were well into their teens, she
took a top job at Sara Lee, where she is now chief
executive. Through a Sara Lee spokesman, Ms. Barnes
declined to be interviewed.
Ms. Barnes was by no means the first to cite family
reasons. In 1956, when Allan Sproul resigned as president
of the Federal Reserve Bank of New York, his principal
reason was to find a less demanding career that would permit
him to spend more time with his family.
Through the next several decades, the family reason was
usually supplemented with another candid phrase or two. In
1983, when Richard Ravitch resigned as chairman of the
Metropolitan Transportation Authority, he added that he was
“tired.” But these days, the line is accompanied by little,
if any, explanation.
The reason, say recruiters, lawyers and executives, is that
it is a face-saving tactic, often apparent from the context.
In November 2002, Afshin Mohebbi, a 39-year-old rising star
in the telecommunications industry, resigned as president
and chief operating officer of Qwest to “spend more time
with his family.” Mr. Mohebbi’s resignation came amid a
mounting Justice Department investigation into an accounting
scandal at the company.
Mr. Mohebbi was known to be close to Qwest’s former chief
executive, Joseph P. Nacchio, who is awaiting trial on a
42-count indictment for insider trading. Mr. Mohebbi, has
reportedly been given immunity in return for his testimony.
Attempts to find Mr. Mohebbi, who has not been charged, for
comment were unsuccessful. Qwest declined to comment.
In 2003, Daniel P. Burnham retired as chairman and chief
executive of the Raytheon Company, announcing his intention
to spend more time with his family, teach and perhaps join
other corporate boards.
This year, after a lengthy Securities and Exchange
Commission investigation into improper accounting practices
at the company’s commercial aircraft unit, Mr. Burnham
agreed to return some past bonuses, with interest, totaling
Mr. Burnham, 60, reached at his home in Santa Barbara,
Calif., said he had indeed joined several corporate boards,
and lectures occasionally at the University of California,
Santa Barbara. Mr. Burnham said that for nearly 30 years,
he worked “some massive number of hours” and “didn’t have
sufficient head time” for his family. Now, he said, he
does. Mr. Burnham declined to comment on the settlement.
Scott Moss, a law professor at Marquette University in
Milwaukee, who specializes in employment law, said he grew
especially suspicious when people used the family line after
spending decades at the office. “Other than the movies,
it’s pretty implausible for someone to suddenly discover the
joys of family life in their late 50s, after 30 years of
being a workaholic,” he said.
Still, there are those who refuse to play the game.
When Carleton S. Fiorina was fired as chief executive of
Hewlett-Packard in 2005, board members asked her how she
would like to position the news.
In a recent interview, Ms. Fiorina said the board suggested
she say it was time for her to move on, or that she wanted
to spend more time with her family.
She refused. “I said, ‘No, that’s not the truth,’ ” Ms.
Fiorina recalled. She had been fired and she wanted to make
that clear to the public.
“Telling the truth is about what’s right and wrong,” said
Ms. Fiorina, who still walked away with a $21 million
severance package. “It’s pretty basic.”
Mr. Moss pointed out that as a woman, Ms. Fiorina might also
have felt that giving such a reason could backfire. “It’s a
more dangerous reason for a woman to give than a man,” he
said. “It could be understood as, ‘this is a woman not
committed to the work force.’ It’s a double standard where
working men spending time with their families is admirable,
but when working women do it they’re neglecting their jobs.”
Occasionally, as top jobs have grown more demanding and
time-consuming, executives do in fact leave to spend more
time with family, or to re-evaluate their lives.
In August 2001, Stephen Collins, quit his job as chief
financial officer at DoubleClick, the New York online
Mr. Collins said that around the time he left the job, he
was “the most unhappy” he had ever been. Like most
high-tech companies at the time, DoubleClick’s stock price
had fallen from a dizzying height.
“I had the responsibility to look institutional investors in
the eye and say, ‘You need to buy my stock because this is a
great story,’ but if I couldn’t do that with complete
confidence I felt that I should not continue as C.F.O. and
that was stressful,” Mr. Collins said.
“I was 60 pounds heavier,” he said. “I just said, ‘Look, I
want to do things differently.”
Mr. Collins moved back to his native Tennessee, where he
took over his father’s legal-software business. Now a
leaner Mr. Collins regularly rides his bicycle long
distances and eats dinner almost every night with his wife
and three daughters, ages 4, 7 and 8.
In some cases, the reasons are far more complex than even
the skeptics might think. In November 2001, after less than
a year in the job, Jeffrey N. Boyer abruptly resigned as
chief financial officer of Kmart. A few months later, the
company filed for bankruptcy.
The popular perception was that Mr. Boyer had seen the
financial troubles looming but other Kmart executives did
not heed his warnings. The S.E.C. has since accused two of
Mr. Boyer’s former colleagues of having engaged in numerous
deceptions to conceal actions that led to the collapse.
In an interview, Mr. Boyer, 48, said that while he and the
company came to a mutual agreement that “the fit was not
good,” personal reasons were also a factor. Eleven months
earlier, Mr. Boyer had had surgery for an acoustic neuroma,
an auditory nerve tumor, and was thinking more about his
priorities in life.
Mr. Boyer has four siblings, several nieces and nephews, and
aging parents he wanted to see more. Mr. Boyer, who is now
co-president of Michaels, the craft store chain, took 14
months off, a hiatus he does not regret.
“You don’t gain anything long term in this life if you leave
and say, ‘I’m leaving to spend time with my family,’ if in
fact in two months you’re out there working another job,”
Mr. Boyer said.
Prevarication can exact its price. During the Enron trial,
the prosecutor, Sean M. Berkowitz, took Jeffrey K. Skilling
to task for claiming he left Enron in 2001 to spend more
time with his family, when Mr. Skilling had spoken with an
executive recruiter about the chief executive’s position
that was open at Lucent Technologies.
And back at Hewlett-Packard, Ms. Fiorina was not the only
one who adamantly rejected the phrase.
According to court documents, when Thomas J. Perkins told
Hewlett-Packard’s outside counsel, Larry W. Sonsini, that he
was quitting his position in protest over what he believed
were deceptive information-gathering practices used by the
company, Mr. Perkins said, “Don’t you dare say I resigned to
spend more time with my children.”