It may be hot in August, but it was apparently a little cooler in corporate boardrooms this year than in years past. According to Liberum Research, which tracks executive turnover for investors among all publicly traded companies, the number of C-suiters who departed their posts this August was much slower than July and far below the numbers from the same time frame in 2007. Overall CEO turnover in August, wrote senior vice president Richard Jacovitz in an email, declined a “huge” 37% from August 2007. CFO turnover declined 21% and overall C-level turnover (board of directors down to corporate vice presidents) declined 34%.
And the 2008 numbers—1,543 total management changes were made in August—aren’t just down from a 2007 blip, when the credit crunch may have added to the 2,345 management changes that were made. They’re also down 25% from 2006. “The most obvious explanation for the lower level of executive turnover,” writes Jacovitz, “is that management appears to be doing whatever it can to save its own positions while continuing to cut the overall number of employees as [a] way to slash budgets and remain lean in tough economic times.”
While it’s true this year has seen a huge jumps in layoffs, and executives surely are doing all they can to save their jobs, I’m not sure I completely buy that rationale. My guess is the economy lets many CEOs—and the boards who hire them—blame the macro. CEOs who perform poorly in a boom time stick out like a paisley suit in a Wall Street boardroom. Those who don’t do well when everyone around them is stumbling, too, can hide more easily behind the broader economic picture.
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