2016 June CEO Report: 624 Exits By Midyear, 97 in June
The pace of chief executive officer departures slowed to the lowest level since February, as 97 CEOs left their posts in June. That was down 3 percent from 100 in May and 5 percent from the 102 who left their posts in June of last year, according to a report released Wednesday by global outplacement consultancy Challenger, Gray & Christmas, Inc.
For the quarter, departures totaled 305, 4.7 percent fewer than the preceding quarter, when 319 CEOs left their posts. The second quarter total was 5.5 percent higher than the same three-month period a year ago, when announced CEO departures totaled 289. It is only the second time this year that CEO departures were lower than the corresponding month in 2015.
Through midyear, 624 CEOs have left their posts, 6 percent more than the 588 CEOs who exited during the first half of 2015.
The government/non-profit sector announced the most CEO changes so far this year with 105, 15 of which occurred in June. Companies in this industry have announced 20 percent more departures this year than through the same period last year when 87 were announced.
“Budget cuts are to blame for the increased number of CEOs who are leaving government and non-profit agencies,” said John A. Challenger, chief executive officer of Challenger, Gray & Christmas.
“In some cases, especially those held accountable by the taxpayers, these organizations need to find leaders whose salaries won’t draw criticism.”
Indeed, this was the situation with the Tobacco Settlement Endowment Trust in Oklahoma City. The selected candidate Patrice Douglas, former Edmond mayor, was hired with an announced compensation of $250,000, $130,000 more per year than the previous executive director. After public outcry, Douglas turned down the position.
Financial institutions announced the second most departures this year with 79, 25 percent more than the 63 announced through June last year. Hospitals follow with 74 CEO changes, 13 of which occurred last month.
Texas and California are leading the country in announced CEO departures this year with 65 each. New York is a distant third with 34. Companies in both Illinois and Ohio have announced 29 CEOs a piece.
Retirement was the most oft-cited reason for departure so far this year as 174 chief executives used this reason. Another 137 resigned, while 122 stepped down into other positions, usually at the C-level or as board chair. Sixty-eight found new positions in other companies, 19 of whom are CEOs in their new positions.