• Discontent With Economy Spreading to Boardrooms: 108 CEO’s Terminated in September

    October 12, 2011 by

    Turnover among the nation’s chief executive officers reached a 12-month high, as 108 CEOs announced their departures in September; among them, the heads of tech giants Yahoo! and Hewlett-Packard.   It was the sixth consecutive month with more than 100 CEO changes, according to the latest report on CEO departures released Wednesday by global outplacement firm Challenger, Gray & Christmas, Inc.

    September CEO exits were up four percent from 104 in August.  It was the highest number of departures since September 2010, when 111 CEO changes were announced.

    Despite the recent uptick in CEO turnover activity, the total number of departures recorded this year remains slightly below the 2010 pace.  So far, Challenger has tracked 922 CEO departures through three quarters of 2011, 4.6 percent fewer than the 967 CEO changes announced from January through September last year.

    Healthcare saw the heaviest CEO turnover activity last month with 20 announced departures.  This sector has the most CEO departures for the year with 148.  That is down 10 percent from the 165 CEO changes announced by this point last year.

    The next closest sector, in terms of CEO changes, is the government and non-profit sector, which has seen 116 chief executives vacate their offices this year, including eight in September.  The financial sector had 13 changes in leadership last month, bringing the year-to-date total for the sector to 96, up from 88 a year ago.

    While the health care sector consistently sees the highest number of CEO changes, technology firms lead in terms of having the most blockbuster changes in the executive suite.

    These firms announced 11 CEO changes last month, including Leo Apotheker of Hewlett-Packard and Carol Bartz of Yahoo! Inc., both of whom were forced out of the high-profile positions after failing to turnaround the struggling companies.  Apotheker took over the Palo Alto-based computer manufacturer after former CEO Mark Hurd was removed from the company due to a scandal involving an inappropriate relationship and misuses of funds. The company was underwhelmed with Apotheker’s performance during his 11-month stint and hired Meg Whitman, former eBay CEO and gubernatorial candidate to replace him.

    Meanwhile, Yahoo! fired Carol Bartz amid falling profits and a shunned takeover bid from Microsoft. She was unceremoniously told of the board’s decision over the phone. CFO Timothy Morse was called upon to replace her.

    “Interestingly, while health care providers and government and non-profit agencies continue to see the highest turnover, both have experienced a decline in the number of departures since 2010.  At the same time, CEO turnover has increased in both the tech sector and in financial services.  This is no coincidence.  Until the recent slowdown, tech and finance were the fastest out of the gate as the recession made the transition to recovery,” said John Challenger of executive search firm, Challenger, Gray & Christmas.

    “Even with the recent stumbling blocks, these two sectors have their eye on growth and expansion.  Boards are quickly disillusioned with CEOs who are slow to deliver the expected results.  Neither Bartz nor Apotheker were given much time to prove themselves.”

    While HP and Yahoo! Inc.’s CEOs were forced out, resignation is the most-often cited reason for CEO departures, with 271 this year, including 26 in September.  Companies have cited retirement 184 times as their leaders’ reasons for leaving.  Additionally, a total of 177 CEOs have “stepped down” this year, which means they no longer hold the CEO title, but remain with the company in some other capacity; typically as a board member or chairman of the board.

     


    CHIEF EXECUTIVE DEPARTURES

       
                   
     

    2011

    2010

    2009

    2008

    2007

    2006

    2005

    January

    96

    89

    113

    134

    114

    139

    92

    February

    92

    132

    82

    114

    127

    112

    103

    March

    99

    119

    114

    123

    103

    87

    129

    April

    103

    101

    78

    112

    126

    115

    117

    May

    103

    125

    115

    115

    144

    148

    120

    June

    113

    107

    105

    126

    105

    127

    120

    July

    104

    88

    126

    124

    88

    118

    96

    August

    104

    95

    101

    144

    124

    114

    116

    September

    108

    111

    105

    140

    112

    152

    121

    October  

    81

    89

    125

    96

    122

    96

    November  

    79

    94

    104

    132

    113

    118

    December  

    107

    105

    123

    85

    131

    94

    TOTAL

    922

    1,234

    1,227

    1,484

    1,356

    1,478

    1,322


         

     

    CHIEF EXECUTIVE DEPARTURES

    Public vs. Private

      September

    2011 Y-T-D

    2010 Year-End Total

    Private

    73

    697

    956

    Public

    35

    225

    278

    CEO DEPARTURES

    By Industry

    INDUSTRY

    10-Sep

    YTD 2010

    11-Sep

    YTD 2011

    Health Care/Products

    23

    165

    20

    148

    Government/Non-Profit

    13

    132

    8

    116

    Financial

    7

    88

    13

    96

    Computer

    10

    70

    11

    88

    Energy

    7

    48

    9

    45

    Pharmaceutical

    4

    41

    7

    43

    Services

    6

    53

    2

    42

    Entertainment/Leisure

    8

    48

    5

    39

    Electronics

    2

    38

    3

    36

    Legal  

    0

    3

    36

    Industrial Goods

    5

    21

    1

    27

    Consumer Products  

    9

    2

    26

    Retail  

    24

    3

    24

    Telecommunications

    3

    25

    2

    21

    Automotive

    2

    17

     

    18

    Utility

    1

    11

    3

    17

    Real Estate

    3

    23

    3

    16

    Aerospace/Defense  

    3

    2

    15

    Insurance

    5

    22

    1

    15

    Transportation

    2

    30

    3

    14

    Food

    3

    22

    1

    11

    Apparel

    1

    5

    2

    8

    Construction

    1

    16

    2

    8

    Chemical  

    6

    1

    6

    Commodities  

    6

    1

    4

    Media

    5

    44

     

    3

     TOTAL

    111

    967

    108

    922

    CEO DEPARTURES

    By Reason

     

    September

    Year-To-Date

    Resigned

    26

    271

    Retired

    25

    184

    Step Down

    18

    177

    New position in another company

    11

    97

    Interim Period Ended

    14

    74

    Acquisition/Merger

    4

    29

    Another position within company

    3

    28

    Removed

    0

    15

    Died

    0

    10

    Ousted

    5

    9

    Scandal

    1

    9

    Health

    1

    8

    Pressure From Board

    0

    4

    Economic Conditions

    0

    3

    Bankruptcy

    0

    2

    Position Eliminated

    0

    1

    Government Regulation

    0

    1

     

    CEO DEPARTURES

    Average Age, Tenure

     

     

    Age

    Tenure

     

    2011

    2010

    2011

    2010

    January

     60.8

    59

     7.6

    8.9

    February

     61.7

    61.5

     9.6

    8.8

    March

     60.0

    59.2

     7.4

    8

    April

     63.2

    62.1

     8.1

    9.5

    May

     55.7

    63.9

      7.1

    8.5

    June

     62.4

    63.1

     8.1

     9.6

    July

     56.0

    55.8

     11.9

    8.6

    August

     59.4

    61.8

     7.3

    8.3

    September

     64.7

     51.5

     5.1

     8.0

    October

     58.0

    9.4

    November

    62.3

    7

    December

    58.7

     7.2

     

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