April 2014 CEO Report: Fewer CEO Exits, But More Ousted
On the heels of Target’s May 5th announcement that chief executive officer Gregg Steinhafel will resign following a major data breach that left thousands of credit card numbers vulnerable, global outplacement consultancy Challenger, Gray & Christmas, Inc. reported 94 CEOs left their posts in April.
The April total was down 24 percent from the 123 CEO departures recorded in March and matched the number of CEO exits during the same month a year ago.
To date, US-based companies have announced 460 CEO changes in 2014, 14.1 percent more than the 403 CEO exits tracked in the first four months of 2013.
Steinhafel, whose resignation will be included in Challenger’s May CEO turnover report, is the latest in a string of high-profile CEOs to leave their post amid scandal or bad press.
Mozilla CEO Brendan Eich announced he would step down from his position after it became public that he had contributed money to a group opposing marriage equality in California.
Meanwhile, top leaders at Certus Bank in Greenville, South Carolina, left their positions after an investigation found they spent lavishly on perks for themselves as the bank lost millions in revenue. In Florida, Marc Dosogne, head of the Boys & Girls Club of Manatee County, was removed after sending an email detailing discriminatory hiring practices.
“CEOs are not only under increased scrutiny from shareholders, employees, government regulators and consumers, but these groups have more tools with which to amplify their complaints. Twitter, LinkedIn, Facebook, etc., make it far easier to rile up the masses,” said John A. Challenger, chief executive officer of Challenger, Gray & Christmas.
“A decade ago, the socio-political beliefs of a CEO like Mozilla’s Eich, likely would have gone unnoticed, much less become the target of consumer boycotts. However, in an age when conversations and actions can be recorded and indelibly posted on the internet, companies have little choice but to respond. Mozilla and Eich could dig in their heels on the CEO’s right to support whatever political cause he wants with his own money. However, the risk of doing so, could lead to losing more and more users in what has become a fiercely competitive web-browser market.”
Eich was one of 16 computer-industry CEOs to leave his or her post in April. The industry saw the second highest CEO turnover during the month, behind health care, where 19 CEO departures were announced.
So far this year, 105 health care CEOs have vacated their offices. That is nearly 70 percent more than the second-ranked government/non-profit sector, which has announced 62 CEO changes to date, including 12 in April.
Texas and California-based organizations saw the heaviest CEO turnover in April with 11 top executives announcing their departure a piece. Meanwhile, Pennsylvania-based firms announced 6 CEO changes, and Illinois and Florida both had 3 exits.
Resignation was the most oft cited reason for departures in April, used by 36 CEOs. Twenty-one CEOs stepped down into other positions in the company, usually as Chairman or other chief-level executive. Four CEOs were ousted from their positions, one left due to legal trouble, and one left amid scandal.