The Reasons Behind PayPal’s Board’s Early Action and What Other Boards Can Learn

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Recently, PayPal’s board took a bold step to halt the company’s performance decline by appointing a new CEO, Enrique Lores, who is expected to bring clarity to priorities and organizational alignment to complete initiatives and execute a turnaround.

I commend this decision: PayPal’s board is thinking like owners, getting ahead of investors before trust is lost and activists arrive to drive change.

PayPal went public in 2002 and has been independent since 2015. Over the past five years, it has seen an approximate 86% decline in share price, while [competitors] have thrived.

There’s still much at stake. PayPal is ranked 137 on the S&P 500 and operates in a strong market. The real-time payment transactions space reached approximately $38.6 billion in 2025, with a 43% CAGR forecast from 2026–2030 and long-term projections of 3x volume growth from now to 2030.

The average S&P 500 CEO tenure has dropped from 7.7 years in 2024 to 6.8 years in the first half of 2025. Shorter-tenured CEOs are significantly more affected by negative quarterly performance, increasing the likelihood of termination by 34%, according to studies.

Recent past

PayPal CEO Alex Chriss joined in 3Q23 and oversaw a 25%–30% stock price decline, compared to Stripe, its largest competitor, which has grown the fastest in payment volume and revenue, with ecosystem merchant partners [named] posting double-digit growth.

Stripe’s revenue is estimated in the low $20 billion range. Stripe processed $1.4 trillion between 2023–2024 (~40% YoY growth), compared to PayPal’s ~$30 billion in revenue, with growth slowing over the last three years from high single digits to mid-single digits. PayPal’s core branded online checkout growth has slowed to 1%, raising board concerns.

Today’s rapid pace of dynamic innovation, along with newly emerging macro trends like “agentic commerce,” requires faster decisions. Five to six quarters is sufficient time to determine if a new strategy is working. PayPal had lost its momentum. Unfortunately, Chriss was unable to reverse the multi-year share price decline, down roughly 80% from five years ago.

Most boards would have waited too long

PayPal’s board saw what was happening and focused on company outcomes compared to peers from an external perspective. All boards can learn from this example of external market focus and centrality.

This change needed to occur now to stop the decline and retain talent and teams. Boards should note the need to intercept a crisis before it fully develops. The general lesson for boards: it doesn’t improve on its own. If you have five quarters of consistent downward results, it’s time to act.

Today’s exponentially changing environment demands faster decision-making and advanced technology deployment, such as agentic commerce, to keep up with innovative payments companies.

The board recognized that the company benefits from strong macro tailwinds. PayPal’s significant share loss can only be attributed to product gaps and/or management execution. There were no external headwind or exogenous factor excuses—such as tariffs, regulatory pressure, or geopolitical issues—affecting the fundamental real-time payments sector. PayPal should have the “right to win” once it addresses its product and execution challenges.

The key lesson for boards is to closely examine your company when it underperforms peers.

There are only a few main reasons. Boards must have the courage to conduct a transparent evaluation:

  • Is the product落后?
  • Has market growth slowed?
  • Has the market fundamentally changed?
  • Or is it execution and go-to-market strategy?
  • Is it the CEO’s strategy and leadership ability?

It’s always one of the big few:

  • Product
  • Market
  • Execution
  • Leadership

High-performing boards engage in open dialogue, make sound business judgment calls, and act.

All boards should note the courage and boldness needed to face succession decisions before more value is destroyed. The opportunity to rebuild trust with investors now lies ahead.