2013 June CEO Turnover Report: 94 Leave Their Posts

The number of chief executive officer departures totaled 94 in June, down 9.6 percent from 104 in May and 5.0 percent lower than the 99 departures recorded in the same month last year, according to the latest report on CEO turnover released Wednesday by global outplacement consultancy Challenger, Gray & Christmas, Inc.

June marked the end of a slightly less active quarter for CEO turnover. For the three-month period ending June 30, a total of 292 CEO departures were announced, a 10 percent decline from the 309 departures announced in the first quarter. The second quarter total was virtually unchanged from the same period a year ago when 288 CEO changes were announced, a 1.3 percent reduction.

Challenger has now tracked 601 CEO changes so far this year, which is virtually equal to the 609 departures recorded in the first six months of 2012.

For the year, health care continues to see the heaviest turnover. It leads all other sectors with 117 in 2013, including an industry-leading 24 in June. Of those 117 health care and medical device companies, 74 CEO changes came from hospitals and hospital systems.

“Changes resulting from health care reform law, coupled with sequestration, which are resulting in funding cuts and lower Medicare reimbursements, could be the catalyst for leadership changes,” said John Challenger, chief executive officer of global outplacement and executive consulting firm Challenger, Gray & Christmas.

Despite the volatile landscape in the health care sector, CEO turnover is actually down 7.8 percent from a year ago, when 127 CEO changes among health care organizations were recorded as of June.
Government/non-profit entities announced 21 CEO changes last month, bringing the 6-month total to 78. The government/non-profit sector is the second highest industry in turnover so far this year, followed by the financial sector which has seen 73 CEO departures this year. Firms in the computer sector have seen 62 CEO changes in the first half of the year, with 8 in June.

Resignation continues to be the most cited reason for departures with 23 in June and 172 for the year. Retirement follows with 121, 22 of which in June. The number of chief executives stepping down, usually staying with the organization as chairman of the board, a director, or in some executive capacity, totals 111 so far this year, including 19 in June.

One notable CEO who stepped down amid bad publicity and falling revenue, yet retained his position as board chairman, was Micky Arison of Carnival Corp. He was replaced by long-time board member Arnold Donald.