We researchers here at Challenger report on CEO turnover monthly, and as the economy continues to falter, we have been seeing more and more CEOs leaving their posts. Boards see the writing on the wall and want to bring in someone with experience righting the ship, while keeping veteran executives around for smooth transitions and corporate insight.
Overall, 104 chief executive officers left their posts in November, bringing the year-to-date total to 1,361. The Challenger report shows that last month’s departures were 27 percent less than a year ago, when 132 CEO changes were announced, and 20 percent less than October 2008 when companies announced 125 exits.
Of the 78 November announcements that included succession data, 33 looked outside the company for permanent replacements. Forty-five new CEOs came from within the company, with 7 serving on an interim basis while a search committee seeks out a successor.
In November, 38 chief executives resigned, ended their interim period in office, stepped down or found another position, but ultimately stayed with the company in some capacity. Twenty-nine of these former CEOs remained in other executive positions or as board members, while 17 continue to serve the company as chairman of the board.
Through November, health care continues to lead in CEO departures with 258, while the tech sector – computer, electronics, e-commerce and telecommunication combined – has seen 214. So far this year, 156 financial industry chief executives have exited their posts, while the government/non-profit sector has seen 155 changes.
CEOs are coming under increasing scrutiny, not only for their actions or how they run their companies, but also for their pay, especially as the government decides which industries receive bailouts. Merrill’s CEO Thain requested $10M in bonus pay, even as the company cuts thousands of jobs and accepts huge bailout assistance.
On the other hand, Richard Fuld of Lehman Brothers will leave his post without severance or bonus pay after Barclays of London acquired Lehman’s core assets. Both companies have seen massive losses.
CEO departures have surpassed the 2007 year-end total and are now within 117 of the 2006 12-month record of 1,478.