Off with Their HEADS.COM - Brief Article - Statistical Data Included

Chief Executive, The, April, 2001 by Sonja Sherwood

"UNEASY LIES the crown worn by today's CEOs," intones John Challenger, CEO of Challenger, Gray & Christmas. The Chicago-based executive search firm reports dire evidence that loyalties are short-lived in the new economy.

Since the firm began tracking CEO exits in August 1999, 1,613 CEOs have resigned or retired from their posts. February 2001 alone counted 119 departures, duplicating January's record. It was the seventh consecutive month this year in which exits exceeded 100.

Not surprisingly, dot-com executives are the largest group beating a path to the door, comprising about one-quarter of the departures. The average reported tenure for all departing CEOs was just 5.4 years.

"CEOs are very vulnerable in a slowing economy," Challenger explains. "They're besieged on all sides by shareholder interests and are easy scapegoats. Boards are no longer their allies; they're much more willing than they were 10 years ago to exercise their prerogatives.

"We're seeing CEOs negotiate strong exit packages up-front," adds Challenger. "They know their days are numbered."

Why Did They Leave?
Unspecified              44
Resigned                 29
Retired                  22
Stepped down              6
New position in company   3
New position elsewhere    3
Left                      2
Replaced                  2
Quit                      2
Company shut down         1
Replaced                  1
Died                      1
Ousted                    1
Removed                   1
Cut                       1
Source: Challenger, Gray & Christmas, Inc.