The Recruiting News
October Sees Fewest CEO Exits Since April 2009
(November 11, 2010) Departures Fall 27% to 81 in October
Turnover among the nation's chief executive officers fell to its lowest level in 18 months, as 81 CEO changes were announced in October. That was down 27 percent from 111 CEO departures in September, according to the latest report on CEO turnover released Wednesday by global outplacement firm Challenger, Gray & Christmas, Inc.
October turnover was nine percent lower than the 89 CEO departures recorded the same month a year ago. It was the lowest monthly total since April 2009, when 78 CEO s left their posts.
For the year, the pace of CEO departures is virtually even with 2009. To date, 1,048 chief executive departures have been announced, up just slightly from the 1,028 departures announced by this point last year.
The government/non-profit sector led all industries this month with nine CEO changes. These organizations have announced 141 chief executive departures this year. That ranks second to the health care industry, which has announced 173 this year, including eight last month.
Companies in the computer and financial sectors each saw eight CEO exits in October, as well. Consumer product manufacturers announced 7 CEO exits, while the service sector had 5 changes last month.
Thirty chief executives resigned their posts last month, bringing the year-to-date total to 331. Resignation is, by far, the most common reason for announced departures. Retirement, the second leading reason provided by outgoing CEO s, was cited in 258 departures this year.
Perhaps the most notable resignation in October occurred at the Tribune Company, where CEO Randy Michaels resigned after coming under fire for instilling a "frat boy" culture at the once-venerable media company. The allegation gained traction with the suspension and eventual resignation of chief innovation officer Lee Abrams, who sent a company-wide email containing highly offensive material.
"Criticism over CEO pay has grown increasingly vocal over the last year. For the most part, boards have defended the compensation packages awarded to their top executives. However, these lucrative pay packages come with a thinner margin of error. If the board's position on pay becomes indefensible under increased scrutiny, the CEO's days are numbered," said John A. Challenger, chief executive officer of Challenger, Gray & Christmas.
"As to the decline in CEO turnover last month, it is too early to determine whether it is indicative of monthly volatility or a lasting trend. We may have reached a point in the recovery where companies are seeking more stability in the c-suite. However, it could simply be a lull before increased turnover that often occurs at the end of the year and into the new year," he concluded.
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