I’ve left a company before because there were no negative consequences for the people who were slacking off. When you’re putting in 150% because the other guy on your team is only putting in 50%, it gets old fast. The good people leave for more productive environments while the slackers tend to accumulate.

No one likes being on the receiving end of a memo to work harder. Ideally the CEO would have taken a more discreet, targeted approach to performance problems. However, it really is better for everyone to have the situation and goals laid out in public without sugar coating it.