What are CEOs like Audrey Gelman or Greg Glassman giving up when they resign?

Last week, with allegations detailing The Wing’s treatment of Black, brown, and LBGTQ employees swirling on social media, cofounder and CEO Audrey Gelman left her perch atop the hip social club and coworking space. “The decision is the right thing for the business and the best way to bring The Wing along into a long overdue era of change,” she wrote in an internal email. Gelman revealed that Lauren Kassan, her cofounder and The Wing’s chief operating officer, was taking over her role alongside SVPs Celestine Maddy and Ashley Peterson, as part of a “newly formed Office of the CEO.”

But Gelman’s resignation is just one in a wave of notable executive departures, sparked by mass demonstrations across the country protesting police brutality and systemic racism. Reformation founder and CEO Yael Aflalo stepped down amid reports that Black employees were sidelined and subject to racist behavior; similar culture issues saw Refinery29 editor-in-chief Christene Barberich and Ban.do CEO Jen Gotch leaving their posts.

Greg Glassman, the founder and CEO of Crossfit, resigned following an offensive tweet and a remarkably insensitive Zoom call with employees and gym owners, during which he questioned the existence of systemic racism. Nancy Lublin, who founded Crisis Text Line, was fired as CEO amid a firestorm of allegations from employees past and present, many of whom aired their grievances with the hashtag #NotMyCrisisTextLine.

A CEO tendering their resignation might seem like an act of humility—an admission of their shortcomings and a step toward building a more inclusive business. But what are these CEOs really giving up?

Gelman, for her part, still has more than a 10% stake in The Wing and remains on the company’s board. The timing of her departure is also convenient, given The Wing has built a business on physical coworking spaces and a robust slate of events. After the coronavirus forced The Wing to shut down its spaces, the company reportedly lost 95% of revenue overnight. (Even before the pandemic, The Wing’s valuation had reportedly dropped from an estimated $365 million to $200 million when WeWork sold its stake.) By stepping down, Gelman—who shored up more than $117 million in funding for The Wing from celebrities and prominent investors—is no longer saddled with a struggling business and can move onto her next venture.

The same could be said of other recently deposed CEOs, many of whom will likely continue to reap the financial benefits they’re entitled to as founders. Aflalo is reportedly a “significant owner” of Reformation. Vice’s recent acquisition of Refinery29 pegged the media brand’s valuation at $400 million—and Barberich, a cofounder, will stay on in an advisory capacity until the fall. Glassman, who was reportedly worth $100 million in 2018, still maintains an ownership stake in Crossfit, which Forbes previously valued at $4 billion. 

Even in less challenging times, it’s not unusual for chief executives to vacate their seats regularly. CEO exits have been trending up since well before the coronavirus hit: In 2019, more than 1,300 CEOs left their jobs, including high-profile exits from Mark Parker at Nike and WeWork’s notoriously erratic founder Adam Neumann. In some cases—WeWork chief among them—corporate malfeasance was the catalyst. The #MeToo movement has also felled hundreds of leaders over the last few years. 

In fact, most chief executives these days tend not to stick around for long: According to a 2018 study by PwC, while 19% of CEOs remain in the position for more than 10 years, the median tenure for a CEO is just five years. There are, after all, significant financial incentives for stepping down. Even an unceremonious ousting can reward an outgoing CEO with a cushy exit package: The former CEOs of Volkswagen and Boeing reportedly received tens of millions of dollars, while Neumann was infamously awarded more than $1.6 billion to walk away.

The rise in CEO departures is also the work of investors who put pressure on the board of directors, and, recently, frustrated employees have called for resignations, too. “If you’re paid tremendous amounts of money to make things go right, people naturally feel that you should be held accountable when things go wrong,” corporate governance expert Charles Elson told The New Yorker.

But pushing out a CEO could be little more than a symbolic gesture if the company’s underlying issues go unaddressed. Crisis communications expert Eric Dezenhall has called it the “first item in the crisis management bag of tricks.” It also leaves the messy business of fixing company culture to the CEO’s successor, potentially setting them up for failure. There’s even a term for this phenomenon—the glass cliff—in which women and people of color are elevated to leadership positions during times of crisis, when the odds are stacked against them. 

Perhaps that’s why a number of Wing employees staged a virtual walkout last week, arguing that “Audrey Gelman’s resignation is not enough” and putting forth a set of demands to the new executive team. “Simply put, The Wing doesn’t practice the intersectional feminism it preaches to the rest of the world,” their statement read. On Instagram, former space staff at The Wing—many of whom are bound by NDAs they signed to receive severance—started an anonymous account detailing their experiences at the company. In a petition, they called for Kassan to resign, along with other Wing leaders who had overseen the part-time staff, and asked for their NDAs to be lifted. 

Meanwhile Gelman recently told The New York Times she is laying low. “I’m looking forward to spending a little time as a stay-at-home mom,” she said.