U.S. stock market CEOs like Jen-Hsun Huang also stepped down due to office romances

Putting aside Huang Renxun's "Chinese female spy case" that is still under judicial investigation, among large US companies, the development of close relationships between chief executive officers (CEOs) and subordinates has always touched the red line of corporate governance (Corporate Governance). (Reuters)

[Reporter Gao Jiahe/Comprehensive Report] Putting aside Huang Renxun's "Chinese female spy case" that is still under judicial investigation, in large US stock companies, the development of close relationships between chief executive officers (CEOs) and subordinates has always touched the red line of corporate governance (Corporate Governance). Looking back at the history of the U.S. stock market, even star managers who have made great achievements in military affairs will most likely leave their jobs once they cross this red line.

Former Intel CEO Krzanich was immediately dismissed if he stepped on the red line

Intel veteran Brian Krzanich took over as CEO in 2013 and led Intel to promote the transformation of data centers and the Internet of Things. In 2018, an internal investigation confirmed that he had had a "consensual" intimate relationship with a subordinate, which violated the company's "non-fraternization policy" that stipulates that managers and above are not allowed to have romantic relationships with employees. Krzanich was immediately forced to resign as CEO and director.

Former McDonald's CEO Easterbrook hid huge compensation claims

Steve Easterbrook, who led McDonald's digital transformation and soaring profits, was fired in 2019 by the board of directors for "lack of good judgment" in his interactions with subordinates. Subsequently, the company discovered that he had concealed his improper relationships with three other employees and destroyed communication evidence, and angrily filed a fraud lawsuit. Easterbrook eventually returned up to US$105 million in severance compensation and equity in 2021. In 2023, the SEC imposed a five-year executive ban on listed companies.

Former HP CEO Hurd used public funds to cover up personal affair

Mark Hurd, who led HP's turnaround, was accused of sexual harassment by an outsourced marketer in 2010. Although the investigation did not find sexual harassment, it was found that he had inflated social expense bills to cover up private meetings. He was forced to resign due to serious violations of the business code of conduct.

Wall Street's "zero tolerance" approach to executive office romances is not out of moral obsessiveness, but because of the favoritism, conflicts of interest, accounting misrepresentations and potential litigation risks that inevitably accompany power asymmetry. No matter how brilliant the military exploits in the past are, those who cross the red line of governance are not immune.

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