CEOs' Exits Rise; Resignations Might Indicate an Improving Economy

In May, 125 CEOs left their posts, according to the latest report on CEO turnover by global outplacement and executive coaching firm Challenger, Gray & Christmas, Inc. The pace was 24 percent higher than in April, when 101 left their jobs, and year-over-year, the 8.6 percent higher than in May of 2009, when the CEO exodus tallied at 115. Not since July of 2009, in fact, when 126 CEOs left their positions, has the rate of CEO departures been this high.

Against the following backdrop, the details behind those findings harbor encouraging implications:

Among all workers in the United States, nearly 2 million quit their jobs voluntarily in April, according to the Bureau of Labor Statistics. The number was greater than the 1.75 million who were laid off during the same month. That latter number is the lowest since January of 2007, and as the Christian Science Monitor recently reported, an increase in voluntary employee departures may very well be the sign of an improving economy.

The BLS data give context to Challenger, Gray & Christmas'. Of the CEOs who announced their departures last month, 42 resigned -- more than one-third (34 percent). Another 31 of them, or 25 percent, cited retirement as the reason for their exit, and nine (7 percent) found new positions in other companies. Boards removed just four chief executives, and economic turmoil was blamed for three chief executive changes.

The nuances of top-level turnover holds several implications, both positive and negative, but nevertheless, in a loose mirroring of the national trends for all employees, a not-insignificant number of CEOs are leaving their jobs voluntarily. "We may continue to see heavy CEO turnover throughout the summer, as companies continue to shift into growth mode,” said John A. Challenger, chief executive officer of Challenger, Gray & Christmas, in a press statement.