June CEO turnover jumps nearly 19 percent
July 12, 2017
• 95 announced exits in June
• “A change in leadership goes a long way in righting the ship”
The pace of chief executive officer departures jumped in June, as 95 CEOs left their posts last month, according to a count by outplacement company Challenger, Gray & Christmas Inc.
That is an 18.7 percent increase from the 80 exits in May, but 2 percent fewer than the 97 CEOs who left their posts during June 2016, according to the report.
For the quarter, departures totaled 266, 11.6 percent fewer than the preceding quarter, when 301 CEOs left their posts. The second quarter total was 12.8 percent lower than the same three-month period one year ago, when announced CEO departures totaled 305. It is the lowest quarterly total since 256 CEOs left their posts in the fourth quarter of 2011.
Through the midyear, 567 CEOs have left their posts, 9.1 percent fewer than the 624 CEOs who exited during the first half of 2016, according to Challenger.
The government/non-profit sector announced the most CEO changes so far this year, with 76, 14 of which occurred in June. Companies in this industry have announced 27.6 percent fewer departures this year than through the same period last year, when 105 were announced.
Hospitals announced the second-largest number of departures this year, with 63, 14.9 percent fewer than the 74 announced through June last year. Financial and service firms each announced 53 CEO changes so far this year.
Challenger says California leads all states in CEO departures, with 70, followed by Texas, where 61 CEO changes occurred. New York is a distant third with 35, one more than the 34 CEO changes announced in the state through June 2016. Companies in both Massachusetts and Florida have announced 29 CEO departures apiece.
Most CEOs stepped down into other positions this year, typically as a board chairman or other C-level executive, as 186 have cited this reason through June. That is a 35.8 percent increase in CEOs who cited this reason from the first half of 2016, when 137 CEOs stepped into other roles. Another 149 CEOs have retired, while 97 resigned.
Three CEOs left amid scandal, including Uber’s CEO Travis Kalanick who resigned in late June after calls for his resignation from the board. Uber was under fire for a culture that tolerated sexual harassment and discrimination. In addition to Uber’s CEO, the COO, CMO, and CFO have also left.
“When a workplace culture is permissive of harassment, sexual or otherwise, a change in leadership goes a long way in righting the ship,” says John Challenger, chief executive officer of Challenger, Gray & Christmas.
He says Uber is reportedly looking at top professional women to help change the face of their organization.
“Especially in Silicon Valley tech companies, where there is a dearth of women in high-level, high-profile positions, this would be a particularly wise move,” Mr. Challenger says.