Wednesday, January 13, 2010
Tweet[IWS] Challenger: LOWEST CEO TURNOVER SINCE 2004 [13 January 2010]
IWS Documented News Service
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Institute for Workplace Studies----------------- Professor Samuel B. Bacharach
School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies
Cornell University
16 East 34th Street, 4th floor---------------------- Stuart Basefsky
New York, NY 10016 -------------------------------Director, IWS News Bureau
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Challenger, Gray & Christmas, Inc.
CONTACTS
James K. Pedderson, Director of Public Relations
Office: 312-422-5078
Mobile: 847-567-1463
jamespedderson@challengergray.com
Colleen Madden, Media Relations Manager
Office: 312-422-5074
colleenmadden@challengergray.com
FOR RELEASE AT 10:00 A.M. EST, JANUARY 13, 2010
Lowest CEO Turnover Since 2004
1,227 CEOs LEFT THEIR POSTS IN 2009
CHICAGO, January 13, 2010 – Turnover among the nation’s chief
executive officers fell to the lowest level in five years in 2009, with
companies announcing 1,227 CEO departures during the year, according to
the year-end CEO Turnover Report released Wednesday by global
outplacement consultancy Challenger, Gray & Christmas, Inc.
The 2009 year-end total is 17 percent lower than the record 1,482 CEO
departures in 2008. It is the lowest annual total since 2004, when just 663
were recorded. The 78 CEO departures recorded in May was the lowest
monthly total since 56 CEO changes were announced in December 2004.
The year ended with 105 chief executive exits in December, a slight
increase over the 94 announced in November. The December total was 15
percent lower than the same period last year, when 123 CEOs left their
posts.
Interestingly, while the health care industry remains one of the more
stable sectors of the economy, it leads all other industries in CEO turnover.
For the fifth consecutive year it led all departures with 203. That was down
from the 285 CEO changes the industry announced in 2008.
The second-ranked government/non-profit industry announced 163 in
2009. It was followed by the financial industry, which saw 123 departures
by CEOs. The technology industry, which includes computer, e-commerce,
electronics and telecommunications firms, had 209 chief executive changes.
The circumstances behind most CEO changes remained relatively
vague, with 355 citing “resignation” as the reason for departure in 2009.
Many of those resigning left under normal succession plans or to “pursue
other interests.”
Another 251 retired, while 231 stepped down as CEO but remained
with the company in some capacity; usually as a member or chairman of the
board or in some other senior executive post. Only 144 of the CEOs who
left their jobs in 2009 did so for new positions in other companies. One of
the more recent defectors was Robert Aiken, the former CEO of U.S.
Foodservice Inc., who left his post in December to take a position with
private-equity firm Bolder Capital LLC.
While 2009 undoubtedly represented a difficult year for corporate
leaders, only 15 CEOs were fired by their companies. Seven more were
“removed” due to underperformance.
Among the more notable CEO exits in 2009, was General Motors’
Rick Wagoner, who was ousted in March. The struggling automaker then
saw its second CEO exit of the year in December when the governmentappointed
Fritz Henderson took his leave. Meanwhile, one-time Home
Depot CEO Robert Nardelli lost the top spot at Chrysler in April, when it
descended into bankruptcy.
While the financial sector saw fewer CEO changes in 2009, compared
to 2008, there were some noteworthy changes. Kenneth Lewis retired as
CEO of Bank of America after overseeing a tumultuous merger with Merrill
Lynch & Co. Morgan Stanley’s John Mack relinquished his title, becoming
chairman of the board. Incidentally, he did not accept a bonus for the third
year in a row amid considerable losses.
“The 17 percent drop in CEO turnover this year may be due partly to
efforts by some companies to try to keep top management stable until the
status of the economy became clearer. The economy may have turned a
corner around mid-year, but it is still in a fragile state, which helped maintain
this stability through the second half of 2009,” said John Challenger, chief
executive officer of Challenger, Gray & Christmas.
“We may continue to see CEO stability in the first half of 2010, as
companies wait to see if economic growth is sustainable. If and when it
appears that the expansion is finally underway, there could be a surge in
leadership changes, with companies opting for growth-oriented risk-takers
over the ‘just-keep-the-ship-afloat’ leaders they favored in the latter half of
the recession,” noted Challenger.
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Stuart Basefsky
Director, IWS News Bureau
Institute for Workplace Studies
Cornell/ILR School
16 E. 34th Street, 4th Floor
New York, NY 10016
Telephone: (607) 255-2703
Fax: (607) 255-9641
E-mail: smb6@cornell.edu
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