PayPal Holdings, the digital payments pioneer, named board member and former HP CEO Enrique Lores as its new chief executive, pushing aside Alex Chriss who has been in the role since September 2023.

Lores, who was also named president, will take on the new responsibilities effective March 1, the company said in a press release issued Tuesday. Lores stepped down as CEO and president of HP on Tuesday.

The PayPal board, which Lores has served on for five years, gave little explanation for the CEO shift, other than to cite a general dissatisfaction with the performance of the San Jose, California-based company. 

“Today's appointment follows a detailed evaluation conducted by the Board of Directors on the current position of the company relative to its competition and the broader industry landscape,” the release said. “While some progress has been made in a number of areas over the last two years, the pace of change and execution was not in line with the Board's expectations.” 

The release made little mention of Chriss, other than to thank him for his service. Chriss, who was formerly an executive at software-maker Intuit, took over from long-time CEO Dan Schulman in 2023 as PayPal struggled to grow. Chriss had tried to set the company on a new course with a new management team.

The CEO transition was announced as the company released fourth-quarter earnings results that didn’t meet financial analysts’ expectations.

PayPal reported that net income jumped 28% to $1.44 billion as revenue increased 4% to $8.68 billion, but analysts pointed to lower-than-expected revenue growth for the period.

In a note to clients, TD Cowen analyst Bryan Bergin called the results a “broad-based miss,” saying that transaction revenue and payments volumes figures were lower than what analysts had forecast.

Lores promised a “transformation” for the company in a fast-changing and competitive industry that is being reshaped by artificial intelligence. 

"We will further strengthen the culture of innovation necessary to deliver long-term transformation and balance this with near-term delivery, executing with greater speed and precision, and holding ourselves accountable for consistent delivery quarter on quarter, to further assert PayPal's industry leadership position," Lores said in the release.

The company seemed eager to reassure investors that there would be a smooth transition, saying that Chief Financial and Operating Officer Jamie Miller will serve as Interim CEO for the remainder of the month until Lores takes the job. The company also appointed David W. Dorman as its independent board chair, a post Lores held previously.

The CEO swap acknowledges that the company is not meeting expectations and needs improved performance, Miller said in leading the company’s fourth-quarter webcast with analysts Tuesday. Neither Lores nor Chriss was on the webcast.

“We recognize as a company that our execution has not been what it needs to be,” she said in introductory remarks for the webcast. “We have not moved fast enough, or with the level of focus required, and we are taking immediate steps to address that reality.”

Miller also sought to provide reassurances that Lores was familiar enough with the company’s strategy to take it forward in a more effective way, without changing that plan in a disruptive way. The CEO change was prompted more by execution than strategy, she explained. 

“There's really good progress across innovation, and a handful of different areas in the company,” Miller said in answer to a question about the new CEO’s plans. “Having said that, our execution is just too slow.”

Lores’ service on PayPal’s board, including the past 18 months as chairman, plus his leadership experience at HP equips him for his new job, Miller said.

“Faster decision-making, clear prioritization, more disciplined execution,” especially with respect to the company’s branded checkout services, “is going to be very, very helpful,” Miller told analysts.

Chriss offered one comment near the end of the release, saying he was proud to have worked PayPal and supported the CEO change. “Now is the right time to make a transition to a seasoned leader who can take the company through its next phase of transformation,” Chriss said. “I have enjoyed a great working relationship with Enrique, and I am certain he is the right person to meet that challenge."