Parker Conrad – whose Startup firm Zenefits had taken the HR world by storm has stepped down as its CEO. The company’s COO David Sacks has taken over his position. Recently, Zenefits has been in the news for the compliance issues with the regulators which have been plaguing the company and for the first time Zenefits missed its revenue targets. Parker Conrad is also stepping down as a director of the company. Along with Sacks' appointment, Zenefits has also promoted Josh Stein as its chief compliance officer. Stein had been the company’s vice president of legal since March.
“I believe that Zenefits has a great future ahead, but only if we do the right things. We sell insurance in a highly regulated industry,” Sacks wrote in an email to employees. “In order to do that, we must be properly licensed. For us, compliance is like oxygen. Without it, we die. The fact is that 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.”
Zenefits, a three-year-old San Francisco startup that provides businesses with free human resources software as a lure to become their insurance broker, has faced significant legal challenges to its business tactics. Recently, the company also appointed three new board members – PayPal co-founder Peter Thiel, Valor Equity Partners managing partner Antonio Gracias and TPG managing partner Bill McGlashan.
In December, Zenefits hired one of the Big Four auditing firms to conduct an independent review of the company’s licensing procedures following reports that the company let unlicensed brokers sell insurance through its service. The company said it would forward the findings to regulators after the review is completed.
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