Despite the lackluster economy, CEOs and Clevel executives are not, in general, getting the boot more often than they did when things were good. In fact, CEO and C-level turnover is at its lowest level since 2005.
CEO turnover fell in the third quarter of 2008, with 125 CEOs stepping down or getting forced out, compared to 134 CEOs who left their companies during the second quarter of this year.
So far in 2008, 448 CEOs stepped down or were removed at U.S. public companies, compared to 637 for all of 2007, according to data from Liberum Research, which tracks changes in C-suite executives.
Despite the recent firings of high-profile chief executives at some large financial institutions, the revolving door to the corner office has slowed. “The numbers have been very surprising,” says Richard Jacovitz, senior vice president of Liberum Research. He believes that some companies are hesitant to make a change at the top as they deal with uncertainty in the economy. “Our take is that companies have been focusing on cutting expenses and maintaining top management to help execute cuts,” he says.
Executives down the hall from the CEO are also more likely to keep their jobs than they have been in the past. Only 653 C-suite executives—including CFOs, CMOs, COOs, and others—left their companies during the third quarter in 2008, compared to 904 who either resigned, were promoted, or fired, during the second quarter.
However, don’t start planning that office makeover just yet. Jacovitz expects executive turnover to pick up again in the new year: “As the financial crisis begins to bite and ultimately turn into a real recession, I do expect we will see executive turnover jump precipitously.”
