The Wall Street Job Report

Should a CEO lose his job for dating someone who worked for the company, even though he asked and received permission from other executives to do so? That’s what the Wall Street Journal reports happened to Stephen P. MacMillan, who had to step down from Stryker Corp. in February.

MacMillan, 48, said he was leaving the medical devices company for”family reasons.” But the Journal says that the real story was that some members of the board, and the granddaughter of the founder of the company, were unhappy with his personal life. They did not approve of him dating Jennifer Koch — a flight attendant from one of the company’s corporate jets — when he and his wife were divorcing, because there was speculation that the relationship with the woman began when he was still married.

The Journal notes that unlike other office sex scandals, the twist here is that MacMillan asked Stryker Chairman William Parfet and Louise Francesconi, who heads the board’s nominating and governance committee, for permission to date Koch. They agreed, as long as she left her job, which she did.

Yet the CEO still ended up losing his job over it, the Wall Street Journal reports, even though Parfet himself said at the company’s annual meeting that MacMillan never violated any company code of conduct or rules. Companies are more risk-averse to any hint of a scandal when it comes to their exec, the paper says.

What got MacMillan in hot water was a December 12 anonymous phone call to a company hotline which claimed that he fired a staffer for having an affair, and charged that he was doing the same thing. The board then hired an investigator who found just one “mistake,” the Journal says – in January 2011, where MacMillan said he was dining with an HR executive at a Dubai restaurant, but it was with Koch. Parfet then asked other executives in the company if they thought the relationship had begun earlier than stated, and two vice presidents said yes.

While there was no evidence that MacMillian improperly used company resources for the relationship, he still lost the confidence of some on the board, as well as Ronda Stryker, the company’s largest shareholder, who did not approve of the relationship. Parfet also reportedly confronted him and questioned his judgment. MacMillan was forced out in February, and agreed to “resign” – although it was treated as a “termination without cause.” Evidently, some board members did not agree with him having to leave. He is now up for an executive position with Johnson & Johnson.

The irony is that MacMillan tried to do the right thing here. He separated from his wife of 24 years last summer. People close to him tell the Journal that he did not start dating Koch until divorce proceedings began and until he got permission from company bigwigs last September precisely because he was aware of other CEOs having their careers destroyed by such scandals.

It is unclear whether the relationship began earlier, but he was as upfront as he could be about it. It seems a little unfair that he should have to lose his job over it. Ironically, if he hadn’t told the truth, and sneaked around the whole time and hidden the relationship, one wonders if he would have been forced out.

Lisa Swan is a Feature Writer for the Compliance Exchange and the Wall Street Job Report. She is also a columnist for The Faster Times and a blogger for Subway Squawkers. Her work has also appeared in the New York Daily News, Yahoo Sports, Huffington Post and the books Graphical Player 2011 and Graphical Player 2010.

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