Following a four-week internal investigation into the $14 billion electronics maker Jabil, CEO Kenneth “Kenny” Wilson abruptly resigned a year after being named at the helm of a major supplier to Apple, Cisco and General Motors. .
Upon his exit as CEO last week, Wilson agreed to a set of restrictive covenants with one strikingly unusual clause: He is forbidden from speaking to the media other than to say: “No comment,” according to the British newspaper “Daily Mail”. His separation agreement. Wilson was also required to provide the company with a sworn written statement before officially leaving on May 18, but Gabel withheld the contents of the affidavit from investors. In exchange, Gabel paid him $2 million and allowed some of his unvested stock awards to continue to vest. (The company has revised its disclosures about unvested equity.)
The company previously Wilson was benched on April 15 It placed him on leave while an investigation “related to company policies” was conducted, allowing him to collect his $1 million salary during that period. Gabel did not reveal details about the investigation, only indicating that it had nothing to do with the company's financial reports. It also remained silent about the substance and results of the investigation. Instead, Gabel simply announced that Wilson “ceased as CEO” on May 18 after the investigation concluded.
Meanwhile, Wilson's two adult sons work at Jabil: Jordan Wilson is a business unit manager in Austin, Texas, and Adam Wilson has the same job title and works in St. Petersburg, Florida, according to LinkedIn and Jabil's disclosures.
Under the terms of his exit as CEO, Kenny Wilson is subject to a two-year non-compete and non-disparagement agreement, which are typical terms when a CEO and the company agree that a CEO will resign.
But then it becomes unusual.
Wilson's approval requires him to “not comment” or not respond if contacted by a member of the press, and Wilson must alert JB General Counsel Christine Melacrino via email about any media inquiry within 72 hours.
“You shall not and shall not permit, assist or encourage others to publish or communicate with any media representative about any aspect of your business or this Agreement,” the deal states. In turn, Jabil agreed not to respond, or to respond with “no comment,” about hiring Wilson, or submitting the joint announcement. The agreement extends to any other form of communication with the media, whether direct or informal, including “deep background,” as defined in the deal.
In exchange, Wilson would receive $2 million, and he would keep his long-term incentive bonus plus the cash value of his unvested long-term stock awards scheduled to vest in 2024. (He would have to forfeit stock that was scheduled to vest in 2025 and 2026.) According to to Jabil Shareholder Report 2023Wilson received a salary of $1 million and received a long-term stock award of $6.2 million in conjunction with his promotion to CEO in April 2023. His total pay in 2023 was estimated at $10.2 million, and he owned unvested stock worth approximately $7 million, according to Jbeil reports.
Brittany McCants, a labor and employment partner at the law firm Barnes & Thornburg, explained that the $2 million was not classified as severance pay; It was a single payment made in exchange for continued compliance with the restrictive covenants and the filing of affidavit. “This payment structure combined with previous disclosures referring to the investigation suggests there was an unfriendly separation between the CEO and the company, and so the company has an interest in paying to get this done quickly while protecting itself,” she said. luck.
Public companies typically do not formally terminate CEOs or other executives “for cause” because doing so would likely have a negative impact on the company's stock price because this could indicate discord, or worse, incompetent leadership at Executive group. While it is common for companies to avoid disclosing the results of an investigation and the specific nature or reasons a CEO leaves after an investigation, the comprehensive media contact clause in the separation agreement clearly defines what Wilson is and is not permitted to say to the company. The media is not typical, in her experience.
“It seems to me they're concerned about some sort of specific discussion about the investigation or his departure,” McCants said. “They give very clear instructions on what he can and cannot discuss about his job, his departure, the investigation, and he makes the decision on what to share and what not to share outside of his judgment and discretion.”
Typically, companies rely solely on the non-disparagement clause in separation agreements to adequately protect themselves from representations by the departing executive. Wilson's contract includes a non-disparagement clause as well as a press ban.
“It appears that there has been some sort of ongoing disagreement or disagreement here, and the company is focused on trying to make sure its brand and reputation are fully protected,” McCants said.
In other words, Wilson and his former employer do not appear to be on good terms.
In contrast, when departures are more amicable, companies typically ensure that the outgoing CEO's separation description focuses on a new opportunity or retirement, so there is no risk of negative assumptions in the absence of communications about “good work” and positive desires. McCants noted future endeavors.
Jbeil did not comment in response to the request. Wilson did not respond luckAttempts to reach him.
Wilson's exit earned him a 10 on “The Push-Out Score” from an independent research firm exchange, which tracks executive departures and rates on a scale from 0 to 10 whether a CEO or CFO was forced to resign or pressured to resign rather than leaving voluntarily. Wilson's age, 58, as well as his short tenure as CEO, and the form and language of the notice all contributed to the outcome, Exechange researcher Daniel Schober wrote in the company's April report. “The combination of all the above warning signs leaves little room for interpretation and suggests that Wilson was under pressure to leave his position as CEO,” he explained.
Wilson's departure comes as Gabel received overall ratings on employee review platform Indeed Trended down from 3.04 in 2022 to 2.92 in 2024, out of 3,900 reviews and 5.0 as the highest rating. Jabil ranked below average in Indeed's work well-being survey, scoring 68 points. Overall, the company scored 3.8 out of 5.0 on both Indeed and Glassdoor employee platform. Among the categories employees can review, including work-life balance, pay, culture, and job security, management scored the second lowest, with a 3.5.
An April review conducted by a former recruiting coordinator at Gabel in St. Petersburg, Florida, said the club was mostly “a boys' club with poor communications.” One inspector currently at the company in Elmira, New York, said they liked the job but felt they were being treated poorly. “It's all about who you know, who you're friends with, who you're in a relationship with, or who you're dating,” the employee wrote. “HR is biased, good luck getting any help when you have any problem with a coworker or supervisor.”
However, other reviewers gave the company five stars and said it was a great place to work with “outstanding” management, good wages and benefits, and a professional workplace culture. Wilson has an 86% approval rating on Glassdoor.
His departure led to a Widespread earthquake in Jbeil, which was another refrain among the constructive criticism that employees directed at the company. “Form some actual strategy around our vision statement. Stop haphazardly reorganizing in hopes of finding a savior.” An employee is similarly presented in a review addressed to company leadership.
Gabel named CFO Michael Dastoor interim CEO during the investigation, and on May 18, the board appointed Dastoor CEO to replace Wilson. Replacing Dastur, the new CFO is Gregory Hibbard, the company's former treasurer.
And Steven Borges, the CEO who took a leave of absence as part of Planned retirement He had entered into a mutual separation agreement, and returned to his position on May 18 under the title of Executive Vice President of the company's global business units. Gabel extended Borges' employment with an amendment to his initial retirement deal. This separation agreement It did not include the media clause included in Wilson's deal.