After a four-week internal investigation at electronics manufacturer Jabil Inc. $14 billion CEO Kenneth “Kenny” Wilson abruptly resigned just after one year at the helm of a major supplier to Apple, Cisco and General Motors. .
When leaving his post as CEO last week, Wilson agreed to a series of restrictive covenants with one strikingly unusual provision: He is barred from speaking to the media other than to say “no comment,” according to his divorce agreement. Wilson was also required to provide the company with an affidavit before his official departure on May 18, but Jabil redacted the contents of the investor affidavit. In exchange, Jabil paid him $2 million and allowed him to continue vesting a portion of his unrealized equity awards. (The company has redacted information about its unrealized capital.)
The company previously benched Wilson on April 15 and placed him on leave while an investigation “related to corporate politics” was conducted, allowing him to receive a $1 million salary during this time. Jabil did not disclose details of the investigation, saying only that it was not related to the company’s financial statements. He also remained silent on the merits and results of the investigation. Instead, Jabil simply announced that Wilson “ceased to serve as chief executive officer” on May 18 following the conclusion of the investigation.
Meanwhile, Wilson’s two adult sons work for Jabil: Jordan Wilson is a business unit manager in Austin, Texas, and Adam Wilson holds the same position and works in St. Petersburg, Florida, according to LinkedIn and Jabil disclosures.
As part of the terms of his departure as CEO, Kenny Wilson is required to sign a two-year non-compete and non-disparagement agreement, a typical condition when an executive and the company agree on an executive’s departure.
But then it becomes unusual.
Wilson’s agreement requires him to refuse to comment or respond if contacted by the press, and Wilson is required to notify Jabil’s general counsel Christine Melacrino by email of any media request within 72 hours.
“You will not, and will not authorize, assist or encourage others to publish or otherwise communicate to any member of the media about any aspect of your work or this agreement,” the agreement states. In return, Jabil agreed not to respond or to respond “no comment” on Wilson’s employment or to provide a joint statement. The agreement applies to any other form of direct or informal communication with the media, including the “deep background” stipulated in the deal.
For this, Wilson will be paid $2 million and will retain his long-term incentive awards, as well as the cash value of unrealized long-term stock awards scheduled to vest in 2024. in 2025 and 2026.) According to Jabil Shareholder Report 2023Wilson earned $1 million in salary and received $6.2 million in long-term equity compensation in connection with his appointment as CEO in April 2023. According to Jabil, $7 million.
Brittany McCants, a labor and employment partner at the law firm Barnes & Thornburg, explained that the $2 million payment did not qualify as severance; it was a one-time payment made in exchange for continued compliance with the restrictive covenants and the provision of affidavits. “This payment structure, coupled with previous disclosures related to the investigation, suggests that the separation between the executive and the company is not amicable, and therefore the company has an incentive to pay to get it done quickly while protecting itself,” she said. Luck.
Public companies generally do not formally fire CEOs or other executives “for cause” as this will likely have a negative impact on the company’s stock price as it could signal dissension or, worse, management incompetence in the C-suite. And while it is standard for companies to avoid disclosing the results of an investigation or the specific nature or reasons why a CEO is leaving after an investigation, the separation agreement details what Wilson is and what he is not allowed to say. In her experience, the media is atypical .
“It seems to me that they are concerned about any particular discussion about the investigation or his departure,” McCants said. “They give very clear instructions about what he can and cannot discuss in relation to his work, care and investigation, which makes decisions about what to share and what not to talk about beyond his judgment and discretion.”
Typically, companies rely only on the non-disparagement clause in separation agreements to adequately protect themselves from allegations made by the departing executive. Wilson’s contract includes a non-disparagement clause in addition to a press ban.
“It appears that there is some controversy or ongoing controversy here, and the company is focused on making sure its brand and reputation are fully protected,” McCants said.
In other words, it appears that Wilson and his former employer are not on good terms.
In contrast, when departures are more amicable, companies typically ensure that the departing executive’s exit characterization is focused on a new opportunity or retirement, so that there is no risk of negative assumptions in the absence of messages about a “job well done” and positive wishes. in future endeavors, McCants noted.
Jabil did not comment in response to a request. Wilson did not respond to Luckattempts to contact him.
Wilson’s departure earned him a 10 on The Push-Out Score from the independent research firm. Exchange, which tracks executive departures and ranks on a scale of 0 to 10 whether a CEO or CFO was forced to leave or was forced to resign versus 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 ranking, Exechange researcher Daniel Schauber wrote in the firm’s April report. “The combination of all the above warning signs leaves little room for interpretation and indicates that Wilson was forced to resign from his position as CEO,” he explained.
Wilson’s departure comes as a result of Jabil’s public evaluation on the employee review platform Indeed. trended downward from 3.04 in 2022 to 2.92 in 2024., out of 3,900 reviews and with the highest rating of 5.0. In Indeed’s Well-Being at Work survey, Jabil scored below average with a score of 68. Overall, the company received a 3.8 out of 5.0 rating on both Indeed and employee platform Glassdoor. Among categories that employees can review, including work-life balance, pay, culture and job security, management received the second lowest score, with a 3.5.
An April review from a former recruiting coordinator at Jabil in St. Petersburg, Florida, said it was basically a “boys club with terrible communication.” An inspector currently working for a company in Elmira, New York, said they enjoy the job but feel they are being mistreated. “It’s all about who you know, are friends with, are involved with, or are dating,” the employee wrote. “HR is biased, good luck getting any help if you have any problems with a coworker or supervisor.”
However, other reviewers awarded the company five stars and said it was a great place to work with “outstanding” management, good pay and benefits, and a professional workplace culture. Wilson has an 86% approval rating on Glassdoor.
His departure led to full scale shake-up in Jabila, which became another refrain among the constructive criticism directed at the company. “Form a real strategy around our vision statement. Stop randomly reorganizing in hopes of finding a savior,” they wrote An employee rated “Comparative” in a review addressed to company management.
Jabil appointed CFO Michael Dastor as interim CEO pending the investigation, and on May 18, the board appointed Dastor as CEO to replace Wilson. Replacing Dastur, Gregory Hebard, the company’s former treasurer, will become the new chief financial officer.
And Stephen Borges, an executive who went on leave as part of planned retirement and entered into a mutual separation agreement, returned to his position on May 18 as executive vice president of the company’s global business units. Jabil extended Borges’ contract, amending his original retirement agreement. This is a separation agreement did not include the media provision included in Wilson’s deal.