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CEO turnover is starting to stabilize, suggesting that recession-impacted companies have been through the worst of the corner-office shuffling. The number of top dogs leaving their posts by November 2009 fell almost 18% compared to the same 11 months last year, according to a report supplied to BloggingStocks by outplacement consulting firm Challenger, Gray & Christmas. Only 94 CEOs left their posts last month, a slight up-tick from October's 89, but 10% lower than the 104 recorded in November 2008.
Through the end of November, 1,122 CEOs have moved on, a decline of 17.6% year-over-year. Last year, 1,361 departures were seen by this point. If the trend continues, CEO turnover could reach its lowest level since 2004, when only 663 occurred.
The health care industry experienced the most changes, with 22 CEOs leaving their posts, bringing the total to 181 for the sector this year, topping all industries. The government and non-profit sector comes next with 148 this year, 18 in November. The financial services industry lost 116 CEOs, with only 10 happening last month.
"We saw a record level of CEO departures in 2008, as companies turned toward executives who could help weather the economic storm. This year, the pace of planned job-cut announcements and CEO turnover have fallen, as organizations achieved some stability," said John A. Challenger, chief executive officer of Challenger, Gray & Christmas.
"Even areas that continue to struggle are seeking a more stable executive suite. For example, turnover in the retail sector is down 33% from a year ago. Construction, which had 23 CEO changes through November 2008, has seen just three CEO exits this year," he continued.
Challenger does note that the slowdown may not last: "Signs of recovery are beginning to emerge. As a turnaround gains momentum, there could be a surge in CEO changes as organizations change from a hold-the-line strategy to one focused more on risk-taking and expansion." For now, we have stability. The next wave of changes are likely to signal a desire for rapid growth.
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Reader Comments (Page 1 of 1)
12-10-2009 @ 3:21PM
Richard Jacovitz said...
Liberum Research, which tracks CEO and all other C-level related changes in public companies, agrees that CEO turnover is down. We disagree, however, on the explanation. Throughout the entire recession, CEO turnover has been way down particularly when compared with the previous month in the past year. While this may be counterintuitive, executive turnover actually remained low during this recession as firms shed jobs at lower levels not at the top. There are always high profiler CEO changes that make the news but overall the numbers have been way down. Once the economy truly bounces back, we expect CEO turnover to actually increase. Boards will be more willing to make changes and opportunities for new CEOs will increase.