How Athenahealth’s Jonathan Bush Lost to Elliott Management

I got to know Bush back in 2014 when he was facing another hedge fund manager who was publicly shorting Athenahealth’s stock. And by getting to know Bush I mean: I played drinking games with a shirtless Bush, witnessed him dress up in costume in front of his board and employees, and swam in a frigid lake with him—all in the name of reporting for my Fortune magazine profile, “Is Athenahealth CEO Jonathan Bush in a Bubble?” Then, late last year, I took a close look inside Elliott, the hedge fund run by billionaire Paul Singer, which is now by far the biggest and most powerful activist investor in the world, in the story “Whatever It Takes to Win.”

Bush’s resignation makes him at least the sixth CEO to lose his or her job in the context of an Elliott campaign, not including Samsung vice chairman Jay Y. Lee, who ended up in jail but retained his title (he was released from a South Korean prison earlier this year). And while Elliott prides itself on improving public companies by ridding them of unethical and “entitled” executives, it’s hard not to see Bush as a little bit of a victim as well.

Elliott’s attack on Athenahealth had the hallmarks of the hedge fund’s most ruthless—and successful—campaigns, and it was clear they were coming for Bush. First came the unsolicited takeover offer highlighting leadership and operational “failures.” Next came the sharply worded public letters accusing Bush and Athenahealth of failing to negotiate with Elliott.

Then, less than three days after the most recent letter, a smattering of old allegations against Bush began resurfacing in the press from London to New York—that he’d physically fought with his ex-wife more than a decade ago; that he’d made “sexually oriented remarks” at work, settling with a former female employee in 2009; that he’d “engaged in highly inappropriate conduct regarding a female employee at an awards banquet in or around early 2005.” Bloomberg further reported this week that while performing a skit at a 2017 health care conference as Will Ferrell’s titular character in the movie “Talladega Nights: The Ballad of Ricky Bobby,” Bush had said he wanted to “do inappropriate things” with a female employee.

While we don’t know whether Elliott helped point reporters to the court documents that inspired the stories (the hedge fund did not respond to a request for comment), it fits the hedge fund’s modus operandi when it goes nuclear on one of its targets: interviewing former employees; hiring private investigators to dig up dirt; combing social media and court documents for skeletons in executives’ pasts. Indeed, the Athenahealth saga evokes the playbook Elliott used when it pushed Compuware to sell itself in 2014: Jesse Cohn, the Elliott portfolio manager also leading the current Athenahealth campaign, arrived at a meeting with Compuware board members wielding a six-inch-thick dossier filled with potentially damaging details about the directors, including a highly unflattering news story featuring the daughter of former GM CEO Fritz Henderson (Henderson was on Compuware’s board at the time).

Fun and games no longer fly

Bush, who has apologized for assaulting his wife, may demonstrate how executive behavior that seemed all fun and games several years ago—and may in fact have helped attract young tech talent to Athenahealth—may be perceived as unacceptable in the era following the #MeToo revelations of sexual misconduct by the likes of Steve Wynn and Harvey Weinstein. (For more nuance on the allegations against Bush, be sure to read Fortune editor-in-chief Clifton Leaf’s excellent essay.)

For example, here’s how I described one night I spent with Bush at Athenahealth’s annual More Disruption Please conference, held specifically to source potential startup investments and partners for the company:

Moments earlier, Bush—nephew of President No. 41 and cousin to No. 43—was regaling his guests with tales of the time he nearly had sex at Camp David. Now it’s past midnight, and he should really be getting to bed, because at 7 a.m. he’ll be leading a group on a jog to a serene but bone-chillingly cold pond for a swim. Then the ATV rumbles up to the “afterparty cabin,” where a few dozen venture capitalists, investors, health care startup CEOs, and Athena execs are playing drinking games, and Bush can’t stand to miss out. The night before he had ended up shirtless while playing something called flip cup. And when a Morgan Stanley portfolio manager, Athena’s largest shareholder, joked that he was selling his stock because Bush was buying everyone beer, Bush threw his hands in the air and yelled, “Yayyyy!!!”

Likewise, the reported “Talladega Nights” incident sounds like classic Bush, who is well-known for making a doofus of himself while performing movie-inspired gags designed to get his audience excited about healthcare—and who’s not afraid to commit to his character, no matter how offensive. When I attended Athenahealth’s MDP conference, Bush was dressed as Alec Baldwin’s sleazy salesman character from the movie version of Glengarry Glen Ross; at a previous iteration of the event, he’d come as fictional talk show host Ali G., complete with exposed chest hair; another time he’d performed a (healthcare-inspired) rendition of the Saturday Night Live comedy song “Dick In A Box.” No one watching could mistake Bush’s conduct there as anything but farce.

Yet it’s easy to see why Bush’s employees may have felt uncomfortable around the CEO, who wasn’t shy about commenting on his sex life, whether it be recounting his romantic exploits at Camp David, or making it known that he was newly single during his divorce proceedings from his second wife (which stretched from at least 2014 to 2016).

Bush also has a favorite adjective, which he throws around in all sorts of incongruous situations: “Sexy.” In the little time I’ve spent with Bush, I heard him apply the word “sexy” to describe women, men, and healthcare startups and products. When I was trailing him for my reporting in 2014, Fortune had recently appointed Alan Murray as its editor-in-chief, and Bush at one point asked me for my impression: “The new editor, is he sexy?” (I did not interpret this question literally, nor did I answer it literally; Alan is the finest of editors, but I’ll leave it at that!)

In stepping down from the company he founded more than two decades ago, Bush seemed to concede that the renegade elements of his personality that once served his entrepreneurial aims were now a liability in his leadership, saying, “It’s easy for me to see that the very things that made me useful to the company and cause in these past 21 years, are now exactly the things that are in the way.”

Set against the backdrop of the #MeToo scandals, of course, those quirks served as fresh fodder for Bush’s enemies—say, Elliott Management—allowing them, in a way, to weaponize that social movement to support their own purposes. CEOs today should realize that the perception of their actions—by the public and by their own employees—can matter more than their intentions.