Are companies adopting a "wait and see" attitude toward leadership until after the election?
CEO turnovers declined in September to their lowest level since the fourth quarter of last year according to a report released by Chicago-based global outplacement firm Challenger, Gray & Christmas.
September CEO departures fell to 95, an 8.7 percent decline from August, and 12 percent lower than the same period last year when 108 CEO changes were recorded. Overall, the report finds, CEO departures have slowed slightly from last year. To date in 2012, 891 CEO departures have been announced, including 282 in the third quarter. The nine-month total is down 3.3 percent from the CEO changes tracked by this point last year.
The third-quarter total is the lowest since 256 CEO changes were recorded in the fourth quarter of last year. It is 2.1 percent lower than the previous quarter and down 12 percent from 2011 third quarter CEO departures.
“It is difficult to pinpoint a reason for the slowdown,” Director of Public Relations James Pedderson told Millionaire Corner. “We tend to see business activity of all types drop off during the summer months. But perhaps the biggest factors are the state of the economy and the upcoming election, both of which are compelling companies to take a "wait-and-see" approach when it comes to leadership. There is more volatility among CEOs when there is more volatility in the economy. So, if the economy suddenly surges...or suddenly takes a dive...we will probably see increased turnover. We may also see an increase to start 2013, once the election is over and there is more clarity on economic and tax policy.”
The health care sector experienced the heaviest CEO turnover activity last month with 21 announced departures, and has posted the most CEO departures for 2012 with 182, up 23 percent from the turnovers announced by this point last year. The government and non-profit sector experienced the second largest number of CEO departures this year with 120 recorded to date, including 11 last month.
The most oft-cited reason for CEO departures is resignation, with 263 announced this year, including 35 in September. Additionally, 148 CEOs have “stepped down” this year, meaning they no longer hold the CEO title, but do remain with their company in another capacity.
Recent Millionaire Corner surveys of affluent households find senior corporate executives focused, not surprisingly, on the economy, which 45 percent said is the most important issue in the upcoming election. Less than half (44 percent) said they do not feel better off financially than they did a year ago.
Sixty-two percent said they are very worried about the upcoming election, with more than half (56 percent) saying they are most concerned about “a win for the other party.”
Donald Liebenson writes news and features for Millionaire Corner. He has been published in the Chicago Tribune, The Chicago Sun-Times, The Los Angeles Times, Fiscal Times, Entertainment Weekly, Huffington Post, and other outlets. He has also served as a marketing writer for Chicago-based Questar Entertainment and distributor Baker & Taylor.
A graduate of the University of Southern California, he is married with a college-age son. He also writes extensively about entertainment.