Walmart’s recent CEO succession highlights an important but rarely discussed rule in corporate leadership: there is no second prize in the race for CEO. Once a board chooses its next chief executive, the future prospects for other internal candidates usually fade quickly.
In November, Walmart named John Furner as its next CEO. That decision effectively closed the door for other senior leaders who were seen as CEO-ready, including Kath McLay, the CEO of Walmart International. In January, Walmart confirmed that McLay would leave the company after a short transition period.
For senior executives, this timing matters. Right after a CEO decision is made, an executive who was seriously considered for the top job is often at peak market value. They have board-level validation, experience running large operations, and strong leadership credibility. Recruiters and boards still see them as capable leaders, not as someone who “lost” the CEO race.
However, staying too long after being passed over can quietly hurt an executive’s reputation. Over time, the story changes from “next in line” to “still waiting,” which can reduce outside opportunities.
Many well-known companies show this pattern. After Jeff Immelt became CEO of GE, Bob Nardelli left quickly and became CEO of Home Depot. At Apple, Ron Johnson departed after Tim Cook was named successor and later took the top role at J.C. Penney. Similar exits followed CEO decisions at Ford and Disney, where senior leaders moved on soon after being overlooked.
There are rare exceptions, such as Nike’s Elliott Hill, who returned years later as CEO. But these cases are uncommon.
Kath McLay’s departure fits the usual pattern. By leaving at the right moment while supporting a smooth transition, she protects her reputation and keeps future leadership opportunities open. Sometimes, the smartest career move is knowing when to step aside.