Published on: Sep 11, 2013
Turnover among the nation’s chief executive officers remained elevated in August as 113 planned CEO departures were reported, including notable retirement announcements from Steve Ballmer at Microsoft and John Surma at U.S. Steel Corp.
While the 113 departures recorded in August is above the year-to-date average (105), the monthly total was 11.7 percent lower than July, when CEO changes reached a three-year high of 128, according to the latest report on CEO turnover released Wednesday by global outplacement consultancy Challenger, Gray & Christmas, Inc.
The August total was up 8.7 percent from the 104 CEO exits recorded in August of last year. This marks the fifth month this year that CEO changes were higher than the corresponding period from a year ago.
Challenger has now tracked 842 CEO changes so far this year, 5.8 percent more than the 796 recorded in the first eight months of 2012.
Last month saw a major announcements from tech-giant Microsoft, whose CEO Steve Ballmer announced he would leave amid falling sales and charges that the company is slow to adapt to mobile markets and tablet PCs. Investors reacted positively to the news, as it increased share prices.
Meanwhile, Chicago start-up-turned-public-offering Groupon announced that Eric Leftkofsky would continue at the helm after taking over as interim CEO for Andrew Mason in February. Co-CEO Ted Leonsis will remain Chairman.
“Neither Microsoft nor Groupon had a firm succession plan for replacing Ballmer and Mason. This is not uncommon, but it could prove costly in the long run, as companies must first struggle to fill the void in leadership and then traverse a volatile period of adjustment that typically occurs following such a significant change,” said John Challenger, chief executive officer of Challenger, Gray & Christmas.
“Microsoft has an opportunity to go outside to find a replacement for Ballmer, which could give the company the shake-up it needs. However, as was demonstrated with Groupon, the best approach may be to stick with talent who already know the ropes. It will be interesting to see how these companies fair going forward.”
Microsoft and Groupon were among the 11 computer firms announcing CEO changes last month. These firms have announced 88 departures for the year, 8.6 percent more than the 81 computer sector CEOs who left their posts through August last year.
Meanwhile, the government/non-profit sector led all industries in August with 24 announced changes, bringing the year-to-date total to 122, 12 percent more than the 109 through August 2012. Health care followed with 18 August departures. Financial firms also announced 11 chief executive changes in August, bringing the sector’s year-to-date total to 103, a 45 percent increase from the 71 financial CEO changes tracked through August of 2012.
Resignation was the most oft-cited reason for departure in August, with 37 CEOs resigning. This brings the year-to-date total for resignations to 239. Another 23 CEOs retired last month. Three CEOs were ousted by their boards in August, while 3 others left amid scandal.Download Resource