People@Work: When Departing CEOs Don't Step Out of the Spotlight

It's not unusual for a departing chief executive to maintain some involvement with the corporation he or she led, usually by holding onto or taking a position on the company's board of directors.

That can be a bad idea, however, according to a report released earlier this month by The Conference Board, a nonprofit business research group. The decision to retain the former CEO as a board member could have benign consequences, but analysis shows that isn't always the case, says Jason Schloetzer of Georgetown University's McDonough School of Business and author of the report.

"News coverage surrounding instances of board retention suggests that these CEOs frequently maintain a high profile and continue to have significant -- sometimes damaging -- involvement within the firm," Schloetzer says.

"We'll Have a Successful IPO"

Take Edward Whitacre, the former CEO and still chairman of General Motors. Speaking in San Antonio on Wednesday, Whitacre suggested that the price of GM shares in its anticipated initial public offering next month will likely be "somewhere in the $20 range. . . $20, $25, something like that would be my guess," Reuters reported Whitacre as saying.

The news agency also quoted Whitacre saying, "I can't say how much we'll sell, but I can say we'll have a successful IPO sometime in November." Further, the former AT&T (T) executive predicted that GM's offering would effectively reduce the federal government's 61% stake in the Detroit automaker.

Forget for the moment that public statements about a company's stock during an IPO are forbidden under federal "quiet period" regulations. Talking up a company's stock is best left to the CEO, which, in this case, is Daniel Akerson, who succeeded Whitacre on Sept. 1.

Official Documents Are More Circumspect

It's doubtful that Whitacre's comments will lead to a postponement of GM's IPO, although he likely violated Securities and Exchange Commission rules. Documents filed by GM officials in August to begin the IPO process didn't stipulate a price nor an anticipated date on which stock would begin trading.

Morningstar analyst David Whiston doesn't expect Whitacre's remarks to affect the IPO timeline. "I can't speak from a legal point of view on that," Whiston told the San Antonio Express-News. "But from a logistical point of view, the White House wants this done as quickly as possible so they can start selling the shares."

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After declining comment earlier in the week, GM late Friday sought to distance itself from Whitacre's statements, saying in a regulatory filing that it can't predict whether the offering will be successful or help the government sell its stake in the company. Whitacre's comments "were not intended and should not be considered as offering material," GM said in the SEC filing.

The incident does suggest that Whitacre, despite his stated desire to return to private life after successfully navigating the automaker through post-bankruptcy, hasn't yet fully ceded the limelight.

Fortunately for GM, perhaps, the chairman isn't long for the boardroom. Upon announcing his decision to retire as CEO in August, Whitacre also said he'd step down as chairman on Dec. 31, when Akerson assumes that position, too.