Published on: Aug 7, 2013
Turnover among the nation’s chief executive officers surged to the highest level in more than three years last month as 128 announced their departures. The July total was up 36 percent from the 94 CEO exits recorded in June, according to the latest report on CEO turnover released Wednesday by global outplacement consultancy Challenger, Gray & Christmas, Inc.
July departures increased 54.2 percent from a year ago, when 83 CEO changes were recorded. It was the highest monthly total since February 2010, when 132 CEOs left their posts.
Challenger has now tracked 729 CEO changes so far this year, 5.3 percent more than the 692 recorded in the first seven months of 2012. It is the first time in 2013 that the year-to-date total exceeds the number of departures from the comparable period in 2012.
Health companies, which include medical diagnostic manufacturers, imaging software developers, and hospitals, produced the bulk of July’s total with 34 CEO changes, 17 of which came from hospitals and hospital systems. Health care continues to lead all sectors in CEO turnover with 151, 7.8 percent more than the 140 recorded through July 2012.
Government and non-profit organizations announced 20 CEO changes in July and 98 for the year, virtually equal to the 94 departures recorded through the first seven month of 2012. Financial firms follow with 19 chief executive changes in July and 92 for the year, a whopping 61.4 percent increase from the 57 financial CEO changes tracked through July of 2012.
Companies in the computer industry announced 15 CEO departures in July bringing the year-to-date total to 77, 10 percent more than the 70 announced through July of last year. One of the most notable CEO changes last month came from struggling game developer Zynga, who replaced founder Mark Pincus with former Xbox head Don Mattrick.
“Some companies saw their fiscal year come to an end on June 30. So, it is not unusual to see some volatility as organizations reassess leadership and make changes, based on financial performance over the previous year. Chief executives are particularly vulnerable when the fiscal year-end results are not very positive. There were at least three CEO changes last month amid poor financial performance, including Zynga,” said John Challenger, chief executive officer of Challenger, Gray & Christmas.
Retirement was the most oft-cited reason for leaving in July, as 41 CEOs announced they would retire bringing the year-to-date total to 162. Resignation followed with 30, but is the most used reason so far in 2013 with 202. The number of chief executives stepping down, usually staying with the organization as chairman of the board, a director, or in some executive capacity, totals 130 so far this year, including 19 in July. Another 102 CEOs found new positions in other companies this year, 14 of whom occurred in July.Download Resource