Groupon CEO Mason to Stay After Board Reviews His Tenure
Groupon Inc. (GRPN), the largest provider of online coupons, has no immediate plans to replace Chief Executive Officer Andrew Mason after its board met to deliberate whether to make changes to senior management.
Directors of the Chicago-based company met yesterday and some members were planning to voice frustration with Mason’s leadership, a person with knowledge of the matter said this week. Groupon shares fell in late trading yesterday after the disclosure that he wouldn’t be ousted.
“The board and the management team are focused on the performance of the company and they are all working together with heads down to achieve Groupon’s objectives,” Paul Taaffe, a spokesman for Groupon, said in an interview.
The board was faced with deliberating whether Mason, a 32- year-old college music major with little prior business experience, has matured into an effective manager -- or become a hindrance to growth at the company he helped create. One option is for Groupon to take a cue from Google Inc. (GOOG), which flourished after its co-founders Larry Page and Sergey Brin made way for a more seasoned executive in Eric Schmidt, said Erik Gordon, who teaches at the University of Michigan.
“It’s an oft-told, oft-expected story that the genius entrepreneur steps aside when he or she succeeds at building a company big enough to need an experienced CEO,” said Gordon, clinical assistant professor at the Stephen M. Ross School of Business. “The Google guys did it, and the results were spectacular.”
Questions around Mason’s role had accumulated over the year since the company held an initial public offering. Growth has slowed and Groupon’s stock has plummeted as demand for daily deals dwindled. Mason has struggled to shore up the core business and push the company into new areas to generate added sources of revenue.
Replacing Mason would require his resignation or a majority vote from Groupon’s eight-person board, according to the company’s bylaws. Though Groupon’s dual-class stock structure grants Mason, along with co-founders Eric Lefkofsky and Brad Keywell, more than one-half of the voting power in decisions put before shareholders, each director has the same amount of sway when voting for the removal of an officer.
Groupon shares fell 8.7 percent to $4.15 at the close in New York. The stock has dropped 80 percent this year.
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