Despite Short Month, CEO Turnover Surges in February

by TMT Newswire

132 CEO Departures; Most since September 2008

CHICAGO, March 10, 2010 – After a slow start in January, chief executive officer departures surged in February to a 17-month high of 132, 48 percent more than the 89 CEO changes announced a month earlier, according to the latest report on chief executive turnover from global outplacement consultancy Challenger, Gray & Christmas, Inc.

Last month’s total is 61 percent higher than the 82 CEO changes recorded in February 2009. It is highest monthly total since 140 chief executives vacated their offices in September 2008, and may mark the beginning of an upturn in CEO turnover as companies shift their focus from survival to growth.

“The economy is in a state of flux, at the moment, but there is a growing sense that the recession is behind us and better times lay ahead. For the past 12-to-18 months, companies needed leaders who could see them through the recession.  Now, they are reassessing and, in many cases, replacing executives with those who are better equipped to take advantage of expansion,” said John A. Challenger, chief executive officer of Challenger, Gray & Christmas, Inc.

With the February surge, the pace of CEO turnover in 2010 is now ahead of 2009.  The 221 CEO changes recorded so far this year is 13 percent higher than the 196 tracked by this point a year ago, according to the Challenger report.

Through February, the sector with the highest CEO turnover is health care, which has seen 35 chief executives leave their post. Twenty-two of these health care CEO departures occurred last month. 

The second-ranked government and non-profit sector has seen 23 CEO departures in 2010, including 15 in February. That is down from 27 recorded CEO exits in the first two months of 2009. 

Meanwhile, CEO turnover in the third-ranked energy sector has more than doubled, going from seven in January and February 2009 to 16 departures in 2010. Several of the departures in this sector came from solar and wind component manufacturers.

“As the economy improves and companies try to improve their competitive position through mergers and acquisitions, we will see more and more top executives leave the newly combined company. Typically, the departing CEO comes from the company that is the target of acquisition,” noted Challenger.

Such was the case following the acquisition of Sun Microsystems by Oracle Corp.  Interestingly, former chief executive officer of Sun Jonathan Schwartz “tweeted” his post-merger resignation in haiku form on social networking site Twitter.

Schwartz was among the 47 who resigned their posts in February.  Another 32 CEO s retired. Twenty CEO s stepped down but remain on the board of their companies.

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CONTACTS  

James K. Pedderson, Director of Public Relations
Office: 312-422-5078
Mobile: 847-567-1463
jamespedderson@challengergray.com

or

Colleen Madden, Media Relations Manager
Office: 312-422-5074
colleenmadden@challengergray.com

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