Zenefits CEO suddenly steps down

Conrad Parker out at Zenefits

Zenefits CEO and founder Parker Conrad is no longer sailing the ship. Conrad’s removal as CEO of the struggling startup was announced on Monday.

Taking the helm is David Sacks, who was Zenefits’ COO and had previously worked at Microsoft after selling his company, Yammer, to the tech giant.

In an email on Monday Sacks told employees, “many of our internal processes, controls, and actions around compliance have been inadequate, and some decisions have just been plain wrong. As a result, Parker has resigned.”

He said that in December, the firm — which manages everything from payroll to health insurance —hired a Big Four auditing firm to conduct a review of the firm’s licensing procedures.

Zenefits came under fire in November when a Buzzfeed investigation found that salespeople were acting as insurance agents without proper licensing in seven states.

Sacks has promised to conduct a “top-to-bottom review to ensure appropriate and best-in-class corporate governance, compliance and accountability.”

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Conrad is also no longer serving on the company’s board of directors. In is place are Peter Thiel, cofounder of PayPal and Founders Fund; Antonio Gracias, founder of Valor Equity Partners, and Bill McGlashan, founder of TPG Growth.

The company has also named Josh Stein, VP of legal, as its first chief compliance officer.

Zenefits was last valued at $4.5 billion.

Sacks has promised the following core values will be followed: “Operate with integrity. Put the customer first. Make this a great place to work for employees.”

“This is Day 1,” he wrote. “This is a founding moment. You are all cofounders in this new path forward.”

There are more than 1,500 employees now working for the company.

Written by John Howard

John Howard

John Howard is the Business Editor at BusinessPundit.com. He is an avid watcher of markets, a wallflower of retail, and a fan of disruptive businesses that utilize technology and unique ideas to form brilliant new ways of doing business.