One of the strangest CEO sagas of the year came to an end this week when Jonathan Bush, cousin to George W. Bush and nephew to George H.W. Bush, announced his resignation as the chief executive of Athenahealth, the Watertown, Mass.-based health software firm.
Bush founded the company with Todd Park (who later went on to become chief technology officer of the United States in the Obama administration) in 1997 and oversaw its growth from a small startup to a health IT giant with a market cap of more than $6 billion. The colorful Bush was the definitive face of the company, a consistent keynote presence at industry conferences and frequently outspoken about the country’s broken healthcare system.
His downfall began in May 2017, when activist investor, Elliot Management—led by Paul Singer—took a 9.2 percent stake in Athenahealth. Singer is notorious for buying into companies, shaking up management, and selling them. His investment into Athenahealth prompted the Board of Directors to make an initial change in management in August of last year, with Bush relinquishing his role as Chairman and President, but staying on as CEO.
While the company saw year-over-year revenue growth, its financial troubles (bookings were down 15 percent year-over-year) led to a 9-percent reduction in staff in October. Moreover, in February, Athenahealth welcomed former GE CEO Jeff Immelt to the board as its new Chairman. The moves were not enough to quiet the complaints from Singer’s Elliot Management, and in May of this year, the firm offered to buy Athenahealth outright for $6.9 billion or $160 per share, citing the need for operational and management changes.
Soon after this bid was announced, news surrounding Bush’s past started popping up. The Daily Mail reported court documents revealed in 2006 that Bush had attacked his ex-wife. Other media reports popped up about Bush’s alleged misbehavior, including a video of him at an event last year making lewd remarks to a female employee.
With the reports piling up, Bush resigned as CEO of Athenahealth earlier this week. Immelt was named Executive Chairman and CFO Mark Levine will take more control over day-to-day operations, as Athenahealth reviews its options for a sale.
Same Old Story
Many CEOs may wonder how a successful, charismatic personality like Bush found himself pushed out the door and what they can do to avoid a similar fate. We spoke to leadership experts who say it’s not that uncommon. Jeffrey Sonnenfeld, senior associate dean for leadership studies at the Yale School of Management told Chief Executive he has seen this story before, citing Arconic’s recent showdown with Singer that cost CEO Klaus Kleinfeld his job.
“This same activist group found their inferior takeover offer rejected and then suspiciously, an unending campaign of misleading, wilting character attacks was unleashed with a series of stories unfairly attacking the character of the CEO.”
In both cases, Sonnenfeld says the boards didn’t have the fortitude to stand up to the attacks. David E. Williams, president, Health Business Group in Boston, similarly seen this scenario play out before where a founding CEO is ousted by investors.
“It actually usually happens at an earlier stage than what you’re seeing here. What’s so noticeable here is that [the CEO] has been involved with the company for a long time and is a large publicly-traded company,” Williams says.
Next page: An Athenahealth institutional investor explains why he never lost faith in Jonathan Bush
0
1:00 - 5:00 pm
Over 70% of Executives Surveyed Agree: Many Strategic Planning Efforts Lack Systematic Approach Tips for Enhancing Your Strategic Planning Process
Executives expressed frustration with their current strategic planning process. Issues include:
Steve Rutan and Denise Harrison have put together an afternoon workshop that will provide the tools you need to address these concerns. They have worked with hundreds of executives to develop a systematic approach that will enable your team to make better decisions during strategic planning. Steve and Denise will walk you through exercises for prioritizing your lists and steps that will reset and reinvigorate your process. This will be a hands-on workshop that will enable you to think about your business as you use the tools that are being presented. If you are ready for a Strategic Planning tune-up, select this workshop in your registration form. The additional fee of $695 will be added to your total.
2:00 - 5:00 pm
Female leaders face the same issues all leaders do, but they often face additional challenges too. In this peer session, we will facilitate a discussion of best practices and how to overcome common barriers to help women leaders be more effective within and outside their organizations.
Limited space available.
10:30 - 5:00 pm
General’s Retreat at Hermitage Golf Course
Sponsored by UBS
General’s Retreat, built in 1986 with architect Gary Roger Baird, has been voted the “Best Golf Course in Nashville” and is a “must play” when visiting the Nashville, Tennessee area. With the beautiful setting along the Cumberland River, golfers of all capabilities will thoroughly enjoy the golf, scenery and hospitality.
The golf outing fee includes transportation to and from the hotel, greens/cart fees, use of practice facilities, and boxed lunch. The bus will leave the hotel at 10:30 am for a noon shotgun start and return to the hotel after the cocktail reception following the completion of the round.
