What Walmart’s CEO succession reveals about the smartest time to exit

There’s no such thing as a silver medal in a CEO succession race.

In November, Walmart named U.S. chief John Furner as its next CEO, crowning him the sixth leader in the history of the world’s largest retailer. The decision also quietly closed the door on another highly regarded contender for the corner office: Kath McLay, Walmart International’s CEO and a decade-long veteran of the company. On Thursday, Walmart disclosed that McLay would depart, staying on briefly to ensure a smooth transition.

The sequence was swift, orderly, and entirely unsurprising to those who study corporate succession. Boards rarely say it out loud, but experienced executives understand intuitively that once a CEO is chosen, the long-term prospects for previously whispered-about internal candidates dim almost immediately as power consolidates around the new chief executive. 

That’s why many of the most ambitious leaders in American business don’t linger after a succession decision. They move deliberately, and often quickly, because the moment immediately after a board makes its choice is paradoxically when a near-CEO executive’s market value is at its peak. The executive has just been validated at the highest level—close enough to be seriously considered for the top job—without yet absorbing the reputational drag that can follow prolonged proximity to a decision that didn’t go their way.

In that narrow window, the story is still about capability. Search firms and directors see a leader who was trusted with scale, complexity, and board scrutiny, not someone who failed to clear the final hurdle. 

When Jeff Immelt was named CEO of General Electric in 2001, the decision concluded one of the most closely watched succession contests in modern corporate history. Among the executives developed as credible successors was Bob Nardelli, then president and CEO of GE Power Systems. Nardelli didn’t stay to see how it might play out. Within months, he left GE to become Home Depot’s CEO.

A decade later, a different scenario unfolded at Apple, but with a similar outcome. Retail chief Ron Johnson had transformed Apple’s stores into an industry-defining, highly profitable global business and was widely viewed internally as CEO-caliber. Apple’s board had long centered its succession plans on Tim Cook, and when Cook was formally named successor to Steve Jobs, it effectively closed the door on a CEO path for Johnson. He left soon after to take the top job at J.C. Penney.

The executives who leave quickly aren’t being disloyal; they’re being realistic. Remaining too long after a succession decision can quietly erode an executive’s standing, both internally and externally, as the narrative shifts from “next in line” to “still waiting.”

At Ford Motor Co., president Joe Hinrichs was widely viewed as a leading CEO contender. When the board selected Jim Hackett in 2017, Hinrichs left not long afterward. Five years later, he resurfaced as CEO of transportation company CSX. Similarly, several senior Disney executives left or were sidelined after Bob Chapek was chosen as CEO in 2020. Most notably, Kevin Mayer, Disney’s head of direct-to-consumer and international, and a widely assumed CEO contender, departed within months to briefly become CEO of TikTok.

There are exceptions. But they tend to follow a different arc.

Although longtime Nike insider Elliott Hill was not passed over in a formal succession contest, he was widely viewed as CEO-ready when the board opted for an external hire in 2020. Hill stayed on for several years and later retired. Only after performance pressures mounted and the company embarked on a strategic reset did Nike’s board reverse course, asking Hill to return as CEO in 2024. Even then, such boomerangs remain exceedingly rare.

McLay’s departure from Walmart fits the dominant pattern. By exiting promptly while remaining to support a defined transition, she preserves both her reputation and her leverage. She leaves as an executive who was close enough to be seriously considered—not one who stayed long enough to be diminished by the process.

This story was originally featured on Fortune.com