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

PayPal went public in 2002 and has been independent from eBay since 2015. Over the last five years, it has experienced an approximately 86% decline in share price, while Stripe, Adyen, Block, and Square have boomed.

There is still a lot to play for here. PayPal is ranked 137 on the S&P 500 and it is in a strong market. The real-time payment transactions space grew to approximately $38.6 billion in 2025, with a 43% CAGR forecast from 2026–2030 and long-term projections of 3x volume growth between now and 2030.

The average Fortune 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 impacted 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 stock price decline of 25%–30%, compared to Stripe, its largest competitor, which has grown the fastest in payment volume and revenue, with ecosystem merchant partners Shopify and Fiserv 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%, heightening board concerns.

Today’s velocity of dynamic innovation, along with newly deployed macro trends like “agentic commerce,” demands faster decisions. Five to six quarters is enough time to determine whether a new strategy is working. PayPal had lost its mojo. Chriss unfortunately was not able to reverse the multiyear 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 versus peers through an externally facing lens. All boards can learn from this example of outside market focus and centricity.

This change needed to happen now to stop the slide and retain talent and teams. Boards should take note of the need to intercept a crisis before it fully manifests. The universal takeaway for boards: it never gets better on its own. If you have five quarters of consistent downward results, it’s time to act.

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

The board recognized that the company is a beneficiary of strong macro tailwinds. PayPal’s compelling share loss can only be attributed to product gaps and/or management execution. There were no excuses tied to external headwinds or exogenous factors—such as tariffs, regulatory pressure, or geopolitical issues—impacting the foundational real-time payments sector. PayPal should have the “right to win” once it addresses its product and execution challenges.

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

There can only be a few major reasons. Boards must have the courage to conduct a transparent evaluation:

• Is the product a laggard?
• 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 ability to lead?

It is always one of the big few:

• Product
• Market
• Execution
• Leadership

High-functioning boards engage in frank dialogue, make sound business judgment calls, and act.

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

The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.