Turnover Among CEOs Increases in December

Turnover among chief executives has jumped in recent weeks as corporate boards hold their feet to the fire for year-end financial results.

A record percentage of CEOs resigned in December, and the overall number of departures climbed 22% from the month before, according to a recent survey by outplacement firm Challenger, Gray & Christmas Inc.

There were 56 CEO departures last month, up from 46 in November. Of the 56, more than half, or 52%, resigned. That was a 2004 record.

The trend is continuing in January, as shown by the resignations announced Tuesday by cable operator Charter Communications Inc. and Krispy Kreme Doughnuts Inc., and by May Department Stores Co. last week.

Blair Jones, an executive-compensation expert at Sibson Consulting, said that in the post-Enron era, boards were held increasingly accountable for the performance of the companies they oversaw.

Boards are more likely to take action against top leadership if earnings don’t live up to expectations, she said.

“There is a fear among directors that if they don’t act on some of these things, it will come back to haunt them,” Jones said.

Some of the most recent CEO departures involve companies that are struggling with losses.

The changes announced Tuesday at Charter Communications, for example, come in the wake of big losses as the company struggles with about $18.5 billion in debt.