Nvidia's Jensen Huang isn't the first - What happened when 3 powerful CEOs faced relationship scandals? What did it cost the market?

In the wake of former Nvidia CEO Jensen Huang’s controversy over his extramarital affairs, we look at how affairs of chief executives of major companies in the past have affected companies and the economy.

1. Brian Krzanich, Intel

Brian Krzanich has been an American chipmaker company Intel employee since 1982 and became CEO in 2013. His career took a big hit when an investigation found a consensual affair between Krzanich and an Intel employee. The employee was reportedly within his chain of command. Any such relationships between an employee and a manager were prohibited under Intel policy, regardless of whether they were consensual.

According to reports, the relationship existed before he was made CEO and ended years earlier. But after the incident was brought to light, internal and external lawyers confirmed the violation, leading to Krzanich's resignation.

What happened to Intel's shares after Krzanich's fall?

Intel's stock closed at $52.19, down from $53.46 the previous session - it lost about 2.4% in stock value, roughly $5.9 billion in market capitalization, on June 21, 2018, the day Chief Executive Brian Krzanich resigned. The share plummeted despite Intel raising its second-quarter earnings outlook in the same announcement. That makes the day especially interesting as investors were processing stronger business guidance alongside a sudden CEO departure amidst the controversy.

Who succeeded Krzanich at Intel?

Chief Financial Officer Bob Swan was appointed as interim CEO. On January 30, 2019, the board made Swan's appointment permanent.

2. Steve Easterbrook, McDonald's

McDonald's dismissed its CEO, Steve Easterbrook, in November 2019. An internal investigation revealed his consensual, non-physical affair with an employee. His relationship involved intimacy through video calls and texts. In 2020, the company's lawsuit exposed his physical, sexual relationships with three other employees and that he had concealed those affairs during the previous investigation.

What happened to McDonald's share after Easterbrook's ouster?

McDonald's faced a sharp decline of $3.98 billion in its market value, which was a single-day loss of approximately 2.72%. The stock value slipped from $193.94 to $188.66.

McDonald's stock fell from its previous closing price of $193.94 to $188.66, a decline of approximately 2.72%, which was about a $3.98 billion single-day loss in McDonald's market value on November 4, 2019. Easterbrook was also required to return cash and equity awards worth more than $105 million as part of a settlement with McDonald's.

Who succeeded Easterbrook?

Chris Kempczinski, who earlier served as the president of McDonald's USA, was appointed CEO at McDonald's in November 2019.

3. Bernard Looney, BP

Bernard Looney's career was all about serving BP, one of the world's largest energy companies. He was made CEO in February 2020. In May 2022, misconduct allegations against Looney surfaced, but the investigation found no company policy breach. Looney was asked to reveal all past affairs to the company at that time.

In 2023, allegations against Looney reappeared. An investigation revealed that Looney had not disclosed all past affairs to the company when asked earlier. This incident led to his resignation on September 12, 2023. In April, 2026, Looney took over as CEO at Prometheus Hyperscale.

How did investors respond to this controversy?

According to reports, BP shares tumbled 2.8% on the London market during the first trading session on September 13, following Looney’s resignation.

BP faced a £2.46 billion (approximately $3.08 billion) loss in its market capitalization.

Who replaced Bernard Looney as CEO at BP?

CFO Murray Auchincloss assumed the interim CEO position on September 12, 2023. BP appointed him permanent CEO on January 17, 2024.

The ouster of consequential CEOs has worried investors, but an immediate market response did not become a lasting financial downfall of a company. Investors will be watching whether the chipmaker giant Nvidia can sustain its position in the AI industry under the new leadership of Colette Kress, and whether the uncertainty surrounding Jensen Huang's departure translates into lasting business consequences.