2014 January: CEO Turnover Soars 32 Percent As Year Starts
Turnover among the nation’s chief executive officers surged 32.3 percent in January to its highest level in nearly four years. A total of 131 CEOs left their posts during the month, up from 99 in December, according to a report released Wednesday by global outplacement consultancy Challenger, Gray & Christmas, Inc.
The January total was 15.9 percent higher than the same month a year ago when 113 CEO exits were announced. It was the highest monthly total since February 2010, when 132 CEO departures were announced by U.S.-based organizations.
“It is not unusual to see a surge in CEO turnover to start the year. Organizations often initiate new strategies and that can mean changes in leadership. In 2010, the last time we saw this many CEO changes, the economy was just coming out of the recession, which undoubtedly prompted some organizations to shift from a survival mode to a strategy focused on maintaining one’s foothold,” noted John A. Challenger, chief executive officer of Challenger, Gray & Christmas. “Now, we may be seeing another shift from conservation to growth.”
The health care and financial sectors led all industries in CEO turnover last month with 24 departures each. The government and non-profit sector followed with 22, and computer firms recorded 10 CEO changes for the month.
Companies based in California had the highest number of CEO departures in January with 12, followed by Texas who recorded nine CEO changes. New York-based organizations announced eight CEO departures.
Retirement was the most oft-cited reason for departures, as 43 CEOs used this explanation. The high retirement number may explain the high tenure average recorded in January; average tenure for departing CEOs was almost 15 years, the highest on Challenger record. Another 32 CEOs resigned from their positions, and 22 stepped down from the CEO role, usually as Chairman or other C-level executive.