Executive Turnover Slowing

A research group that monitors executive changes reported that third-quarter CEO changes in 2008 surprisingly declined from the totals registered in 2007 and 2006, according to a study by Liberum Research.

There is a significant decline in executive turnover for CEOs, CFOs, and overall C-level management as compared to the same time periods in 2007 and 2006. CEO turnover declined 13 percent, CFO turnover declined 21 percent, and overall C-level turnover, including boards to vice presidents, declined by 23 percent.

When comparing turnover numbers in September 2008 and September 2007, numbers declined similarly (see below charts). CEO turnover for September 2008 decreased by two percent compared to 2007. CFO turnover declined by 23 percent and C-level turnover declined by 20 percent from 2008 to 2007.

Executive turnover has declined as unemployment numbers continue to rise. Despite the rising unemployment numbers, executive turnover numbers continue to deflect this trend as such a scenario would usually accompany an increase in executive turnover.

Liberum expects to see a growth in executive turnover numbers moving into the fall and early winter. Despite the decline in September’s figures in executive turnover, there continue to be a number of high-level executive changes that are of note.

While the numbers have been surprising, Richard Jacovitz, senior vice president of Liberum Research, believes that companies have been focusing on cutting expenses and maintaining top management to help execute cuts. “I do expect as the financial crisis begins to bite and ultimately turn into a real recession, that we will see executive turnover jump precipitously,” he adds.