115 CEOs leave their posts in May

Turnover among chief executive officers rose by 47 percent in May, as 115 companies announced CEO changes last month compared to 78 in April. It was the highest number of CEO departures since last December, according to the latest report released Wednesday by global outplacement firm Challenger, Gray & Christmas, Inc.

May CEO departures were unchanged from a year ago. Overall, the pace of CEO turnover is down from 2008. In the first five months of 2009, employers announced 502 CEO changes, 16 percent fewer than at the same point in 2008.

ìIt has been difficult to pinpoint a trend in this yearís turnover figures. One month is up; the next is down. Monthly departures in February fell into double-digits for the first time since December 2007, shot back up in March, and then fell to a four-and-a-half year low in April. Now, we are back up again in May. It really has been a roller coaster year for CEO turnover,î said John A. Challenger, chief executive officer of Challenger, Gray & Christmas.

ìReasons for the fluctuations are varied, but part of it may have to do with the uncertainty surrounding this recession. It is difficult for CEOs and boards of directors to predict what is coming down the road, which makes it difficult to plan for the future. As a result, there has been a lot of volatility in turnover trends,î he said.

The financial sector had the highest turnover in May, accounting for 15 of the 115 CEO changes recorded. For the year, the still-struggling sector has seen 50 CEOs resign, retire, step down, or forced out. That is down from 64 financial CEO departures at this point in 2008.

Despite the financial sectorís ongoing problems, it is not the industry with the highest CEO turnover. That title goes to the health care industry, which has seen 77 CEO departures so far this year, including 14 in May. The 2009 figure is down 29 percent from a year ago, when 109 health care CEOs vacated their offices in the first five months.

Resignation was the most common reason for departure in May and leads all other reasons for the year, with 133 outgoing CEOs offering this non-descript, ambiguous term as the grounds for their departures. Another 114 CEOs have stepped down this year, which typically means that they will remain with the company in some capacity; usually as a member or chairman of the board.

The Challenger report also revealed that 369 or nearly three-quarters of the 502 CEO changes have occurred at private firms. By comparison only 133 of the CEO departures announced this year took place at public companies.