Starwood and now its former CEO Frits van Paasschen put out a statement this morning that parties had reached a “mutual” agreement for Mr. van Paasschen’s immediate departure.
The financial press have the “-around the word mutual indicating that nobody is truly believing that this would be a voluntary move.
You can read more about this development on WSJ here and below is an excerpt from their article.
Starwood said its board will conduct a search for a permanent CEO and will consider both internal and external candidates.
Adam Aron, who has been on the company’s board since 2006, has been named interim chief executive. Mr. van Paasschen, who assumed Starwood’s top executive spot in September 2007 after working as an executive at Molson Coors Brewing Co. , will stay on as a consultant during the transition.
“The board believes now is the right time to take steps to accelerate Starwood’s growth, improve performance, and sharpen our focus on operational excellence,” said board chairman Bruce Duncan.
Last week, Starwood announced plans to spin off its vacation ownership business into a separate company, a move it said would take advantage of the increasing growth opportunities within the timeshare industry.
Something happened or the board felt that Mr. van Paasschen was limiting the company’s performance and decided to eject him.
The board chairman’s statement about accelerating Starwood’s growth and improving its performance gives some hints for this rather drastic move. Investors hate uncertainty and usually CEO’s leave is very carefully orchestrated move.