CEO Changes Fall Over 20 Percent

Turnover among the nation's chief executive officers plummeted to an eight-month low in March as 86 CEOs announced their departures during the month. That represents a 21 percent decline from 110 CEO exits in February, according to the latest report on CEO turnover released Wednesday by global outplacement and executive coaching firm Challenger, Gray & Christmas, Inc. in Chicago.

The March total is 8.5 percent lower than the same month a year ago, when 94 CEO changes were recorded. It was the lowest monthly total since 83 CEO changes were announced in July 2012.

Through the first three months of 2013, 309 CEO departures have been announced, which is 4.1 percent fewer than the 321 tracked in the first quarter of 2012. The quarterly total is 4.3 percent lower than the 323 CEO changes in the final quarter of last year.

The health care sector has seen the heaviest CEO turnover so far this year, with 59 CEO changes announced through March. The number of changes in the sector is down slightly from a year ago, when 63 first-quarter departures were announced by hospitals and other health care providers. Health care has consistently seen the heaviest turnover over the last several years. Last year, turnover in the sector increased 23 percent after falling to a six-year low in 2011.

It is difficult to pinpoint a reason for this trend.  It could simply be the sheer number of these organizations, which include hospitals, medical groups and practices, assisted living facilities, healthcare product suppliers, etc.  We may see some changes as a result of the Affordable Care Act, though none of the CEO departures announced since the passage of that bill have specifically cited it as a reason for leadership change, said John A. Challenger, chief executive officer of Challenger, Gray & Christmas.

Behind health care, financial services saw the second highest number of CEO departures in the first quarter, with 37 top executives announcing their exits, including seven last month.

Computer firms have announced 36 CEO changes this year, including 15 in March.  Pandora announced that its long time CEO Joe Kennedy would leave the music streaming service provider.  Meanwhile, John Riccitiello, CEO of Electronic Arts for nearly 6 years, announced he would resign as of March 30th and hand the reins back to Chairman Larry Probst, who led the company for 16 years prior to Riccitiello's tenure.

Resignation is the leading reason for CEO departures this year, cited in 85 CEO exits.  Retirement ranks second with 63, while 58 CEOs have announced that they stepped down but remained with the company; usually as a board member or chairman.