The CEO Departures study by public relations firm Weber Shandwick found that 49 CEOs departed in the first three quarters of 2006, compared to 58 CEOs in the same period in 2005 – a 16% decline, according to a news release.
The announcement said that the study identified significant C-suite changes including:
- Of the new CEOs announced in the first three quarters of 2006, 18% were interim CEOs (nine out of 49 new CEO announcements). By comparison, nine interim CEOs were announced in all of 2005, and only two interim CEOs were named in 2004.
- For the first three quarters of 2005 and 2006, insider executives continued to outnumber outsider executives in being selected as new CEOs in the largest US companies. However, 2006 had an even greater percentage of insider CEO successions than 2005 (69% vs. 59%, respectively).
- One-third (33%) of Fortune 500 CEOs made the “Five Year Club,” namely CEOs who held the title from 2000 to 2005. Industries with the most CEOs in the “Five Year Club” are commercial banks, insurance-property/casualty companies and utility companies.
“The revolving door in the corner office of our largest US companies appears to be slowing down. Stringent regulatory restrictions, greater board oversight and a higher caliber CEO may finally be having a dampening effect on CEO churn,” said Leslie Gaines-Ross, Weber Shandwick’s chief reputation strategist. “CEO stability can only be good news since CEO departures tend to increase customer concerns, employee uncertainty, investor anxiety and company paralysis.”
Weber Shandwick’s CEO Departures study is based on an analysis of the US Fortune 500 companies.