2016 December CEO Report: Turnover Drops in December as Companies Stay in Holding Pattern
Exxon Mobile, Starbucks, and Land’s End were some of the major companies announcing leadership changes in December, but overall turnover among the nation’s chief executives fell during the month. Meanwhile, CEO changes for the year were virtually unchanged from 2015, according to the year-end report on announced CEO departures released Wednesday by global outplacement consultancy Challenger, Gray & Christmas, Inc.
A total of 99 CEO departures were announced in December, 6.6 percent fewer than the 106 changes reported in November. December departures were 13 percent lower than the 114 CEO departures announced the same month a year ago.
The final quarter of the year saw 304 CEO departures, down 11 percent from the 332 CEO changes recorded during the same period in 2014.
In all, 1,248 CEO changes were announced in 2016, which was just 2.0 percent more than the 1,221 tracked in 2015.
“A strong economy does not guarantee low turnover among top executives, but it certainly helps. Steady growth and stability help create a less-risky environment for corporate leadership,” said John A. Challenger, chief executive officer of global outplacement and executive coaching firm Challenger, Gray & Christmas, Inc.
“However, with the inauguration less than two weeks away, companies may also be in a holding pattern until the new administration’s transition is complete. President-elect Trump has proposed many policy ideas that could greatly impact trade, taxes, hiring, and compensation,” he added.
Government/non-profit entities, which include universities, foundations, and chambers of commerce, led all industries with 204 CEO changes in 2016, 9 of which occurred in December. This is compared to 188 exits from these organizations last year.
Financial firms announced the second most CEO departures in 2016 with 156, only slightly more than the 154 CEOs who left hospitals last year. Computer companies place fourth for CEO departures with 132, 23 percent more than the 107 announced departures in this sector in 2015. Healthcare companies, excluding hospitals and hospital systems, announced 87 CEO changes, while companies in the entertainment and leisure sector announced 73.
California announced the most CEO departures this year with 121, compared to 129 in 2015. Texas companies recorded 112. New York recorded 80 CEO changes in 2016, 29 percent more than the 62 announced in that state in 2015.
The most oft-cited reason for leaving the top post was retirement, as 333 companies offered this as cause of departure. Another 282 resigned, while 267 stepped down into another role, typically as board chair or other C-level executive. Forty-five CEOs were ousted from their posts, while 6 others left amid scandal.
Meanwhile, two CEOs left in December due to their involvement in the new administration: Rex Tillerson of Exxon Mobile who is President-elect Trump’s nominee for Secretary of State, and David Sacks of HR-software firm Zenefits who is said to be aiding the Trump transition team.