CEO turnover at the 500 largest companies in the world jumped 10 percent last
year from the level in 2006, driven by financial instability and a huge wave of
mergers and take-privates, according to a report by public relations firm Weber
Shandwick.
Top executives at 81 companies left their jobs in 2007.
Exits from North American companies jumped 50 percent from a year earlier, to
27 in 2007. The fourth quarter was particularly tumultuous for North American
CEOs, with 13 leaving office in that period, the report found.
Turnover was highest in the telecommunications industry and in financial
services, where the subprime meltdown claimed several CEOs, including
Citigroup’s Charles Prince and Merrill Lynch’s Stanley O’Neal.
CEOs at large companies typically leave for “traditional” reasons—retirement,
succession planning and the like. But last year, there was a sizable bump up in
the number of chief executive departures attributed to nontraditional reasons,
such as mergers, private equity buyouts, interim term completions and corporate
governance restructuring.
More telling, nearly a third of the departures were against the CEO’s will,
up from 28 percent in 2006, Weber Shandwick found.
The report showed that insiders, or those who have worked for a company for
three or more years, are still preferred when searching for a new CEO. In 2007,
nearly seven out of 10 newly named CEOs were insiders.
The average tenure of CEOs who exited office last year was six years, down
from six years and five months in 2006. North American CEOs’ average tenure
declined to six years and eight months from eight years and six months.
Filed by Matthew Quinn of Financial Week, a sister publication of Workforce
Management. To comment, e-mail editors@workforce.com.
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