CEO Exits Reach 6-Month High in December

Total CEO turnover fell 9% in 2015 while tenure at the largest companies has increased nearly a full year since 2005.
Matthew HellerJanuary 13, 2016

Turnover among U.S. chief executive officers rose 33% to a six-month high in December, but total CEO departures for the year fell 9%, according to Challenger, Gray & Christmas.

The global outplacement consultancy reported that 114 CEOs vacated their posts last month, compared with 86 in November and representing a 7% increase over the year-ago period. A total of 1,221 CEOs left their jobs in 2015, the lowest number since 2012, when 1,214 chief executives announced their exits.

In another recent report, Equilar said tenure for S&P 500 CEOs has increased nearly a full year since 2005. In 2014, the average S&P 500 CEO had served an average of 7.4 years, up from 6.6 a decade ago, and 6.0 at the median, up from 5.2.

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The Equilar numbers may seem counterintuitive to such trends as increased M&A activity, scrutiny from activist investors, and an aging boomer population. But Equilar attributed the rising average to “a collection of long-standing CEOs at the top of the list.”

In 2014, there were 142 CEOs who had served their companies longer than 10 years, compared with only 94 a decade ago.

Since 2009, there have been 265 new CEOs at S&P 500 companies, meaning that more than half of the S&P index has a CEO with below-average tenure. “Since Dodd-Frank passed in mid-2010, only eight newly appointed CEOs have left their position, perhaps an indicator of future stability at the position among the largest U.S. companies,” Equilar said.

According to Challenger, government/non-profit entities, which include universities, foundations, and chambers of commerce, led all industries with 27 CEO changes in December and 188 for the year, 5% fewer than the 198 tracked in all of 2014.

Financial firms and hospitals tied for second most CEO changes with 137 each. Financial companies announced 18 CEO departures in December, while hospitals announced 11.