Big wave of CEO departures despite economic recovery

Real estate developments in Thủ Đức city in HCM City. The value of maturing corporate bonds in the real estate sector this year will reach VNĐ329.5 trillion, the highest level in the past three years. — VNS Photo Bồ Xuân Hiệp

HCM CITY — Numerous chief executives of publicly listed companies have resigned this year despite an ongoing economic recovery, according to recent data released on Tuesday.

The list of departing CEOs includes several individuals who have been at their positions for only a few months. 

Nguyễn Thanh Sơn recently left his role as general director of An Gia Real Estate Investment and Development Corporation (AGG), which went public four years ago, after only five months. 

No explanation was provided for his resignation.

Similarly, the general director of Thủ Đức House (TDH) has resigned after nearly two and a half years, citing operational challenges and an inability to meet the company’s performance criteria. 

Thủ Đức House is confronting significant financial challenges while facing enforcement actions from the HCM City Tax Department due to tax debt.

The CEO of Hải Phát Invest (HPX), who joined Hải Phát in 2017 and ascended to the role of general director in 2018, has also departed from his position due to “differences of opinion.”

Meanwhile, three senior executives of the Hậu Giang Pharmaceutical (DHG) have also resigned because of “business pressures and stringent restructuring mandates.” 

Many CEOs have not fulfilled the expectations established by their respective companies upon their appointments, experts said.

Most companies also cited ongoing significant challenges in their business operations, they added.

For example, Thủ Đức House’s after-tax profits were negative as of the end of 2023, resulting in total equity of only VNĐ390 billion.

It reported an after-tax loss of nearly VNĐ1.7 billion in the first quarter.

Hậu Giang Pharmaceutical saw a 38.4 per cent decline year-on-year in after-tax profit during the first quarter, totalling just VNĐ222 billion.

Việt Nam’s GDP expanded 6.4 per cent in the first half of this year, but domestic consumption remains weak, with most consumers prioritising expenditures on essential goods only.

The real estate sector also remains mired in difficulties, with multiple companies under pressure to repay maturing bonds.

According to the HCM City Real Estate Association, the value of maturing corporate bonds in the real estate sector this year will reach VNĐ329.5 trillion, the highest level in the past three years, up from VNĐ144.5 trillion in 2022 and VNĐ271.4 trillion in 2023.

With the average CEO tenure typically around five years, recent studies indicate that increasing resignations stem not only from poor performance but also ethical concerns. 

As the threat of an economic slowdown looms, many leaders may choose to resign to protect their legacies, experts said. — VNS