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After a four-week internal investigation at $14 billion electronics manufacturer Jabil Inc., CEO Kenneth “Kenny” Wilson has abruptly resigned just after passing his one-year anniversary at the helm of one of the chief suppliers to Apple, Cisco, and General Motors.
In exiting the CEO role last week, Wilson agreed to a set of restrictive covenants with one strikingly unusual provision: He’s banned from speaking to the media other than to say, “no comment,” according to his separation agreement. Wilson was also required to give the company a sworn written statement before his formal departure on May 18, but Jabil redacted the contents of the affidavit from investors. In exchange, Jabil paid him $2 million and allowed some of his unvested equity awards to continue to vest. (The company redacted its disclosures about his unvested equity.)
The company previously benched Wilson on April 15 and put him on leave while it conducted an investigation “related to corporate policies,” allowing him to collect his $1 million salary during that time. Jabil didn’t disclose details about the investigation, only stating that it was unrelated to the company’s financial reporting. It also remained mum on the substance and outcome of the investigation. Instead, Jabil simply announced that Wilson “ceased to serve as chief executive officer” on May 18 after the investigation was completed.
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 title and works in St. Petersburg, Fla., according to LinkedIn and Jabil’s disclosures.
Under the terms of his exit as CEO, Kenny Wilson is subject to a two-year non-compete and non-disparagement agreement, which are typical terms when an executive and a company agree that the executive will resign.
But then it gets unusual.
Wilson’s agreement binds him to a “no comment” or non response if he is contacted by a member of the press, and Wilson is required to alert Jabil’s general counsel Kristine Melachrino by email about any media inquiry within 72 hours.
“You will not, nor permit, assist, or encourage others to, publish or otherwise communicate with any representative of the media about any aspect of your employment or this agreement,” the deal says. In turn, Jabil agreed not to respond, or to respond with “no comment,” about Wilson’s employment, or to provide the joint announcement. The agreement extends to any other form of on- or off-the-record communication with the media, including “deep background,” the deal specifies.
For that, Wilson gets paid $2 million, and he’ll keep his long-term incentive awards as well as the cash value of unvested long-term equity awards scheduled to vest in 2024. (He had to forfeit equity that was scheduled to vest in 2025 and 2026.) According to Jabil’s 2023 shareholder report, Wilson made $1 million in salary, and got a long-term equity award valued at $6.2 million in conjunction with his promotion to CEO in April 2023. His total pay in 2023 was valued at $10.2 million, and he held unvested equity valued at around $7 million, according to Jabil’s reports.
Brittany McCants, a partner in labor and employment at law firm Barnes & Thornburg, explained that the $2 million payment was not characterized as severance; it was a single payment made in exchange for continued compliance with restrictive covenants and providing an affidavit. “This payment structure coupled with previous disclosures referencing an investigation suggest a less than amicable separation between the executive and the company, and so the company has an interest in paying to get this done quickly while protecting themselves,” she told Fortune.
Public companies typically don’t formally terminate CEOs or other executives “for cause” because it will likely have a negative impact on the company’s stock price since this can signal discord, or worse, incompetent leadership in the C-suite. And while it’s standard for companies to avoid disclosing the results of an investigation and the specific nature or reasoning why a CEO departs after an investigation, the extensive media communication provision in the separation agreement explicitly outlining what Wilson is and is not permitted to say to the media is not typical, in her experience.
“This seems to me like they’re worried about some kind of specific discussion about the investigation or his departure,” said McCants. “They’re giving very explicit instructions on what he can and can’t discuss around his employment, departure, and the investigation, which takes the decision of what to share and what not to share outside his judgment and discretion.”
Normally, companies only rely on a non-disparagement clause in separation agreements to adequately protect themselves from a departing executive’s representations. Wilson’s contract includes a non-disparagement clause on top of his press prohibition.
“It seems like there was some kind of disagreement or continued discord here, and the company is focused on trying to make sure its brand and reputation are fully protected,” said McCants.
In other words, it doesn’t seem like Wilson and his former employer are on good terms.
In contrast, when departures are more amicable, companies typically ensure that the characterization of the outgoing executive’s separation is focused on a new opportunity or retirement so there’s no risk of negative assumptions in the absence of communications about a “job well done” and positive wishes in future endeavors, noted McCants.
Jabil did not comment in response to a request. Wilson did not respond to Fortune’s attempts to reach him.
Wilson’s exit earned him a 10 on “The Push-Out Score” from independent research firm Exechange, which tracks executive departures and ranks on a scale of 0 to 10 whether a CEO or CFO was forced out or pressured to resign rather than left voluntarily. Wilson’s age, 58, plus his short tenure in the CEO role, and the form and language of the notice all contributed to the score, Exechange researcher Daniel Schauber wrote in the firm’s April report. “The constellation of all the aforementioned warning signals leaves little room for interpretation and indicates that Wilson was under pressure to leave his post as CEO,” he explained.
Wilson’s departure comes as public ratings of Jabil on employee review platform Indeed have trended downward from 3.04 in 2022 to 2.92 in 2024, out of 3,900 reviews and with 5.0 as the highest. Jabil ranked below average in Indeed’s work wellbeing survey, scoring a 68. Overall, the company scored a 3.8 out of 5.0 on both Indeed and employee platform Glassdoor. Among the categories that employees can review, including work-life balance, pay, culture and job security, management scored the second-lowest, at 3.5.
An April review from a former Jabil recruiting coordinator in St. Petersburg, Fla., said it was mostly “a boys club with terrible communication.” An inspector currently at the company in Elmira, New York, said they loved the job but felt they were treated poorly. “All about who you know, who you are friends with, related to, or who you are dating,” the employee wrote. “HR is biased, good luck receiving any help when you are having any issue 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 had an 86% approval rating on Glassdoor.
His departure led to a full-scale shakeup at Jabil, which was another refrain among the constructive criticism employees had for the company. “Form some actual strategy around our vision statement. Stop randomly reorganizing in hopes of finding a savior,” wrote an employee on Comparably in a review directed at company leadership.
Jabil appointed CFO Michael Dastoor as interim CEO during the investigation, and on May 18, the board named Dastoor CEO to replace Wilson. To replace Dastoor, the new CFO is Gregory Hebard, the company’s former treasurer.
And Steven Borges, an executive who had taken leave as part of a planned retirement and had entered a mutual separation agreement, returned to his role on May 18 under the title of executive vice president of the company’s global business units. Jabil extended Borges’ employment with an amendment to his initial deal to retire. That separation agreement did not include the media provision included in Wilson’s deal.
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The Knowledge Group, the leading producer of regulatory-focused webcasts, announced today that it has scheduled a live webcast entitled: Enhancing Corporate Governance with Effective Internal Investigations.
Event Summary:
In todays complex business landscape, maintaining robust corporate governance practices is paramount for ensuring transparency, accountability, and ethical conduct within organizations. One of the crucial components of effective corporate governance is the implementation of thorough and efficient internal investigations processes.
Join our speakers in this CLE webcast for an insightful webinar where we delve into the strategies and best practices for enhancing corporate governance through effective internal investigations.
Key topics include:
– Internal investigations as an aspect of proper corporate governance
– Elements of an effective internal investigation framework and the critical legal and regulatory considerations in the internal investigation framework
– Best practices
Speakers/Faculty Panel
Andrew M. Rosini
Senior Managing Director, Leader of Global Risk & Investigations Practice
FTI Consulting, Inc.
Matthew B. Greenblatt
Senior Managing Director
FTI Consulting, Inc.
David C. Ware
Partner
Gibson, Dunn & Crutcher LLP
For an updated list of the faculty panel, please visit:
Enhancing Corporate Governance with Effective Internal Investigations
About The Knowledge Group
Founded in November 2006, The Knowledge Group has been at the forefront of providing quality continuing education programs for lawyers, accountants, financial executives, risk and compliance specialists, human resources professionals, technology officers, and business consultants in a wide range of industries.
The Knowledge Group strives to be the best-in-class provider of continuing education by bringing forth relevant content you cant get anywhere else.
Contact:
Therese Lumbao
Director, Account Management & Member Services
The Knowledge Group, LLC
info ( @ ) theknowledgegroup dot org
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