CEO exits plunge to lowest since 2004
March 15, 2017
• Just 72 “departures” announced in February
• “It will be interesting to see if companies continue to hold off making leadership changes”
Turnover among the nation’s chief executive officers fell to its lowest level in over 13 years in February, according to data compiled by outplacement firm Challenger, Gray & Christmas Inc.
U.S. companies announced 72 CEO changes last month, which was 43 percent lower than the 128 chief executives who left their posts in January, and 17 percent lower than February 2016, when 87 CEOs announced their departures, Challenger says.
February’s total is the lowest monthly total since December 2004 when 56 CEOs left their posts.
“February is typically a slow month for CEO turnover, since most major leadership changes happen in January or at a company’s fiscal year-end. This year is particularly unique with a new administration promising legislation favorable to business. Companies may use a wait-and-see approach in light of this,” says John Challenger, chief executive officer of Challenger, Gray & Christmas.
Financial companies and hospitals each saw eight CEO changes last month, leading all industries in departures. Computer companies saw seven changes while companies in the industrial goods manufacturing space reported six chief executive changes. Firms in the pharmaceutical, healthcare, energy, retail, and transportation industries tracked five CEO changes each, according to Challenger’s count.
The majority (29) of CEOs retired last month. Another 25 stepped down from their posts but continue to be active in the company usually as a C-level executive or chairman. Four CEOs saw their interim periods end, while three found new positions in other companies.
Texas announced the most CEO departures last month with 11, while California reported eight chief executive exits. New York companies announced seven CEO changes. Massachusetts, Illinois, and Pennsylvania each recorded five CEO exits.
“We average at least 90 CEO exits per month, with February and April seeing the fewest exits. It will be interesting to see if companies continue to hold off making leadership changes,” says Mr. Challenger.