Two Heads Aren’t Always Better than One, at Least at Whole Foods

Walter Robb, a 25-year veteran of the company, will stand down as co-CEO at the end of the year, leaving the reins to co-founder John Mackey, the company said late Wednesday.

Although most companies are content with one CEO, the likes of Chipotle Mexican Grill, mall giant Westfield Group, and, most notably, Oracle, have experimented with the co-CEO model. Advantages can include divvying up responsibilities, perhaps even to play to a particular individual’s strengths.

In Oracle’s case, one of its two CEOs, Safra Catz, was previously CFO and continues to oversee financial management duties since the tech company didn’t replace her. Mark Hurd, meanwhile, has more responsibility for corporate strategy. “It’s bigger than Safra and me. We have over 130,000 people. We need a lot of leadership in our company,” Hurd said when former CEO and founder Larry Ellison stood down in 2014.

For most boards assessing succession, though, the perceived negatives of splitting accountability for making big decisions aren’t worth the risk. Having two powerful personalities in charge raises the prospect of clashes over strategy that could delay decision-making or put the company on a windy path. And while good CEOs are able to collaborate effectively with other senior executives, it’s their leadership qualities that often set them apart.

Co-CEO arrangements may also appear more acceptable to the market when times are good. But unconventional management structures are often the first thing to be questioned by investors should a company’s performance begin to lag.

Whole Foods had high praise for Robb, who will get a $10 million severance package and lifetime 30% discount on Whole Foods products.

“Under Walter’s leadership, Whole Foods Market has grown from 12 to 464 stores in three countries,” Chairman John Elstrott said. Mackey, meanwhile, said Robb was “the most extraordinary retailer I’ve had the privilege to work with.”

Still, the company is experiencing its fair share of challenges and no explanation was provided for Robb’s departure, other than that the company was announcing “changes to its leadership structure.”

Comparable store sales fell 2.6% in the third quarter, prolonging a sustained slump as competition heats up in the organic food market and shelf prices fall while supermarket chains battle for customers.