CEO Turnover Hits 95 in September
By Challenger, Gray & Christmas, Inc.
CHICAGO, October 10, 2012 – Turnover among the nation’s chief executive officers declined slightly in September as 95 CEOs announced their departures during the month. The quarter ending with September saw the fewest CEO exits since the fourth quarter of last year, according to the report released Wednesday by global outplacement firm Challenger, Gray & Christmas, Inc.
September CEO departures were down 8.7 percent from 104 in August. Last month’s total was 12 percent lower than the corresponding month a year ago, when 108 CEO changes were recorded.
Overall, the pace of CEO departures has slowed slightly from 2011. So far this year, 891 CEO departures have been announced, including 282 in the third quarter. The nine-month total is down 3.3 percent from the 922 CEO changes tracked by this point last year. The third-quarter total is 2.1 percent lower than the previous quarter and down 12 percent from 316 CEO departures in the third quarter of 2011. The third quarter total is the lowest since 256 CEO changes were recorded in the final quarter of 2011.
The health care sector experienced the heaviest CEO turnover activity last month with 21 announced departures. This sector has the most CEO departures for the year with 182, which is up 23 percent from the 148 CEO changes within health care organizations announced by this point last year.
“Health care has always been a top sector for CEO turnover, due in large part to the sheer number of hospitals and health-related services in this country. However, we are seeing a greater number of leadership changes than in previous years. Several factors could be contributing to this, including the economic impact on the financial health of hospitals and the inevitable changes necessary through impending legislation,” said John A. Challenger, chief executive officer of Challenger, Gray & Christmas, Inc.
The government and non-profit sector had the second largest number of CEO departures this year with 120 recorded to date, including 11 in September. Both the financial and the computer sectors had 13 changes in leadership last month, bringing the year-to-date totals for those industries to 83 and 93, respectively.
Resignation is the most-often cited reason for CEO departures, with 263 this year, including 35 in September. Companies have cited retirement 188 times as their leaders’ reasons for leaving. Additionally, a total of 148 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. Another 106 have found new positions in other companies.
One of the most notable CEO changes last month came from struggling electronics retailer Radioshack Inc. whose head Jim Gooch left amid a $21 million second quarter financial loss.