Sima Sistani, the former CEO of WW International Inc. (commonly known as WeightWatchers), has been dismissed from her role, but her exit package includes a noteworthy perk: up to $37,500 for executive coaching services through the end of the year. This provision is becoming increasingly common as companies navigate leadership transitions and aim to support departing executives.
Understanding Executive Coaching in Exit Packages
Executive coaching and outplacement services are often part of exit packages for senior leaders. According to Andrew Challenger, a senior vice president at Challenger, Gray & Christmas Inc., the amount offered to Sistani aligns with typical market standards for such packages.
In addition to the coaching, Sistani’s exit deal covers $50,000 in legal fees and a month’s salary, which is indicative of a comprehensive support strategy for outgoing executives. In 2023, Sistani’s total compensation was reported at $8.9 million, reflecting her high-level position within the company.
The Growing Importance of Outplacement Services
A 2022 survey conducted by Mercer revealed that nearly 80% of American and Canadian companies provide some form of outplacement services. Among these, a striking 93% extend coaching specifically to senior executives, compared to 78% for lower-tier employees. This trend indicates a shift in how companies view their responsibilities towards departing leaders, acknowledging the need for support during career transitions.
When executives are hired, their contracts often include clauses that detail the support they will receive if they are terminated without cause. The specifics can vary widely among companies. For instance, while some firms like Shake Shack Inc. do not specify potential costs for outplacement services, others, such as Hertz Global Holdings Inc., have capped these offerings at $25,000.
Components of Executive Outplacement Packages
Outplacement packages for executives typically provide access to a dedicated career coach who assists with future career moves and resume enhancements. Karel van der Mandele, senior vice president at Right Management, notes that high-level executives often receive comprehensive support that includes leadership coaching and assessments.
Such packages commonly last for 12 months and may extend into the first few months of the executive’s new role at another organization. While the coaching services offered in Sistani’s package are standard, some high-profile executive coaches can charge upwards of $100,000 annually for their services.
WW’s Challenges and the Need for Leadership Changes
WW International has faced significant challenges recently, including difficulties in retaining customers amid the rising popularity of weight-loss medications like Ozempic. In response to these struggles, the company announced job cuts in August to streamline operations and reduce costs.
As Tara Comonte steps in as interim CEO, the company is likely focused on rebuilding its strategy and customer engagement, indicating a pivotal moment in its leadership and operational approach.
Conclusion
The inclusion of executive coaching in exit packages, as seen in Sistani’s case, highlights a growing trend in corporate America. Companies are recognizing the importance of supporting leaders as they transition out, ensuring that they have the resources and guidance needed to navigate their next career moves effectively. This approach not only aids the individuals involved but also helps organizations maintain their reputation and morale during leadership changes.