Recession helps send more CEOs to the exits
- 15 January, 2009 01:14
Nearly 1500 CEOs left their jobs last year, including 221 in the technology and telecommunications sector, according to Challenger, Gray & Christmas.
The overall exit rate was up 9.4% over the 2007 level, and the total number of CEO departures was the most that the US executive recruitment and outplacement firm has recorded in any year since it began tracking such changes in 1999.
As part of its analysis of the numbers, the firm included a laundry list of reasons why CEOs left their jobs. For instance, it said that 466 resigned and 362 retired. Another 41 were said by their companies to have been fired outright, and Challenger thinks that pressure from boards of directors and/or stockholders was responsible for some of the resignations as well. In addition, the credit crisis in financial markets was cited in the departures of 27 CEOs.
The health care industry had the largest number of CEO changes: 285. Meanwhile, 169 chief executives left their positions in the financial services industry. "While the financial sector did not see the highest CEO turnover, it definitely saw the highest number of executives forced out of their positions in corporate shake-ups related to the weak economy," Challenger CEO John Challenger said in a statement.
He added that the US$700 billion financial bailout program approved by US Congress last autumn "forced companies to take a hard look at how their chief executives were performing, how they were compensated and whether the company could move forward under their leadership."
Among the prominent tech-industry CEOs who gave up their jobs last year was Yahoo's Jerry Yang, who announced plans step down in November, shortly after Google called off a proposed online advertising deal with Yahoo and Microsoft and spurned Yang's plea to resuscitate a buyout bid that he had previously rejected.
Yahoo announced late yesterday that it has hired Carol Bartz , former executive chairman of software vendor Autodesk's board, to replace Yang as CEO. Bartz was Autodesk's president and CEO for 14 years before she herself stepped down from those positions in 2006.
Another high-profile IT casualty last year Diane Greene, who was ousted as president and CEO of VMware in July. Greene was replaced by Paul Maritz, a former executive at Microsoft, which has emerged as VMware's top rival in the virtualization software market.
David Dobson resigned from software vendor Corel effective last June to take a new job as executive vice president and chief strategy and innovation officer at Pitney Bowes. Former Symantec executive Kris Hagerman is currently serving as interim CEO at Ottawa-based Corel.
Cadence Design Systems, a maker of computer-aided design software, announced this month that it has named board member Lip-Bu Tan president and CEO -- an appointment that follows the October resignation of former CEO Michael Fister.
2009 also has already seen at least one departure of a high-tech CEO. Seagate Technology announced yesterday that Chairman Stephen Luczo is taking back the CEO position that he gave up to Bill Watkins in 2004. Watkins, who made a series of public appearances for Seagate at last week's International CES trade show in Las Vegas, will help with the transition and then "confer" with Luczo over the next week to determine what role, if any, he will play at the company in the future, according to Seagate's announcement.