|
In its monthly analysis of CEO transitions of publicly traded companies, Chief Executive Online has identified that an average of 60 senior management changes were reported in the month of December and January. The compilation analysis also revealed that Retail and Banking segments have taken the lead with as many as 18 and 17 transitions respectively, mostly because of declining sales in the retail segments and deteriorating financial health of the banking industry.
A report from U.S. Commerce Department reveals that the retail industry sales have declined by 1.6 percent in the month of January, with the industry already seeing a parade of retailers such as Circuit City Stores, Mervyn's and Linens N Things entering bankruptcy proceedings. On the other hand, according to a S&P report on banking industry, the banking sector is confronting liquidity and confidence challenges, with S&P ratings' outlook for U.S banking industry for 2009 being projected as negative, reflecting worsening economic conditions and mounting asset-quality problems.
Healthcare, Pharmaceutical, Oil & Gas sectors also have recorded considerable changes with Healthcare and Biotechnology reporting a turnover of four executives each, while Oil & Gas companies accounted for about eight transitions.
Executive Role
Executive turnover figures reveal that out of the total transitions compiled by CE Online, CEOs make up for over 40 percent of the transitions, with 20 CEOs in December and 25 in January relinquishing their positions for various reasons. Interestingly, most of the outgoing CEOs have either voluntarily stepped down or have landed up elsewhere. So, not many CEOs have been asked to step down during these two months. Additionally, about 70 percent of the outgoing Chairmen have announced their retirement. Executives holding both the positions of Chairman and CEO accounted for 40 percent and 15 percent of the compiled management changes respectively for December and January.
To cope up with new challenges emerging out of an ailing economy and high executive turnover rate, at least five companies have announced creation of new position of COOs in the month of January.
Tenure in Office
The average tenure of an outgoing Chairman was about 13 years in most of the companies. While the outgoing CEOs had an average tenure of about eight and seven years for the two months of December and January respectively, CFOs had the shortest stint with two years in office.
Nature of Transition
U.S corporations have mostly opted to promote internal candidates as the CEOs, Chairmen and COOs. While 73 percent of the transitions compiled for the month of December and January were internal replacements / promotions, 27 percent were outsiders.
Note**
*The analysis refers to the transitions compiled by Chief Executive Online only and is not the absolute number of transitions reported during the period.
*Transition by Industry refers to the industrial segments, where there is more than one transition reported. Industrial sectors, which have reported only one transition, have not been included in the analysis.
*The figures have been rounded off to the nearest zero.
Research & Graphics by Aparna Reddy | 
