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CEO departures highest since Sept. 2008

By Chavon Sutton, staff reporter


NEW YORK (CNNMoney.com) -- The number of chief executives who left their posts surged in February to the highest level since September 2008, when the economy was rocked by the financial crisis.

Chief executive departures jumped 48% to 132 in February, from 89 in January, according to a report out Wednesday from Challenger, Gray & Christmas, Inc., an outplacement consultancy. That's the highest level of turnover in the corner office since 140 CEOs left office in September, 2008.

Last month's total was also up 61% from February, 2009.

"For the past 12 to 18 months, companies needed leaders who could see them through the recession," said John A. Challenger, chief executive officer of Challenger, Gray & Christmas, Inc.

"Now, they are reassessing and, in many cases, replacing executives with those who are better equipped to take advantage of expansion," he said.

So far in 2010 a total of 221 CEO's vacated their seats, well ahead of the 196 chiefs who left during the same period last year, according to the report.

Some of the biggest names to clear out their offices this year include Jonathan Schwartz who famously tweeted about his last day at Sun Microsystems (SUNW), Owen Van Natta, whose tenure at the helm of MySpace lasted less than one year and Walt Freese who left Ben & Jerrys.

Health care has seen the most turnover this year, with 35 departures, followed by the government and non-profit sector which saw 23 leaders step down, and the energy sector, which had 16 CEO's leave this year.

Challenger said that nonprofit and health care CEO's have buckled under the weight of monstrous state budget deficits and the uncertainty surrounding health care reform.

"There's no consensus on how to deal with [the health care industry], but near unanimous agreement that's it's not working," said Challenger. "This puts great pressure on a CEO."

Challenger expects to see CEO departures continue to climb this year.

"As the economy improves and companies try to improve their competitive position through mergers and acquisitions," said Challenger, "we will see more and more top executives leave the newly combined companies."  To top of page

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