Turnover Among CEOs Surging

Turnover among the nation’s chief executive officers surged in May as 104 announced their departures during the month. That is 10.6 percent higher than the 94 CEO exits in April, according to the latest report on chief executive officer turnover released Wednesday by global outplacement and executive coaching firm Challenger, Gray & Christmas, Inc., which is headquartered in Chicago.

May departures were 5.1 percent higher than the same month a year ago, when 99 CEO changes were recorded. This marks the third time this year CEO departures were higher than the corresponding month a year earlier.

Through the first five months of 2013, 507 CEO departures have been announced, which is virtually unchanged at .07 percent from the 511 tracked over the same period in 2012.

The health sector saw the heaviest CEO turnover last month, with 24 CEO changes. Health care firms have now announced 95 CEO departures in 2013, which is down slightly from a year ago, when 99 health CEO departures were announced from January through May.

Government/non-profit institutions announced the second highest number of CEO changes in May with 13. Financial firms saw the next highest number of CEO departures with 10, followed by the computer sector which saw 9 changes.

Thirty-six CEOs cited resignation as their reason for departing in May. Another 21 CEOs retired from their posts, while 14 stepped down into other roles within the executive leadership ranks, usually as a chairman or chief-level executive. Thirteen CEOs found new positions with other organizations, and 8 saw their interim role end.

One of the most notable departures in May was the sudden retirement of 59-year-old Bob McDonald, who was at the helm of global consumer products company Proctor & Gamble for four years.  While the official reason for the departure was retirement, it was widely reported that McDonald’s exit was prompted by increasing pressure from activist investors.

“The fact that this 33-year company insider was forced out after just four years in the CEO position is a clear indication of how much more power and influence shareholders have in the direction of a company. Boards really can no longer simply be rubber stamps or ‘yes men.’ In this environment, no CEO is secure,” said John A. Challenger, chief executive officer of Challenger, Gray & Christmas.