Perhaps it's another corporate-driven "reality" show in the
making, this one featuring hard-scrabbled CEOs trying to live
another day rather than the foibles of Donald Trump wannabes.
"It's just like that TV program 'Survivor' -- we keep seeing
CEOs bailing out or being voted out by the board," says Leslie
Gaines-Ross about the latest Burson- Marsteller
"Insider/Outsider CEO Succession Tracking Survey," showing that
2004 had the highest number of new CEOs since Burson began tracking
CEO succession in 1999.
As the recent ouster of Hewlett-Packard's Carly Fiorina
indicates, CEOs constantly are in the headlines; nary a day goes by
when you don't see another item in the Wall Street Journal
about one CEO or another calling it quits.
The increasing CEO churn is cause for concern among senior PR
practitioners because when the new boss comes in he often brings in
folks he is familiar with to run the communications department and
shows the door to the existing team.
"It's a high-stakes game companies are playing today, and it's
hard to get it right," says Gaines-Ross. In 2004, according to the
survey, 97 new CEOs were appointed, up from 85 in 2003 and more
than double the number of new CEOs appointed in 1999.
The survey also shows that the proportion of insider-to-outsider
CEOs among Fortune 1000 CEOs has remained relatively stable
during the last six years (64% insider CEOs vs. 36% outsider
CEOs)(see chart). Another salient finding: new CEO
announcements are greater in the first and fourth quarters of each
year.
"Boards are taking a greater role because their reputations are
also at risk," says Gaines-Ross. "It still surprises how the tenure
of CEOs continually decreases, becoming shorter and shorter." On
the other hand, it's encouraging that the proportion of insider
CEOs has remained stable because "it's been shown that insider CEOs
deliver greater value in the long term compared with outsiders,"
she adds.
William J. Holstein, editor-in-chief of Chief Executive
who also edits the "Armchair M.B.A." column in the Sunday Business
section of the New York Times, stresses that boards want CEO
candidates in their late forties and fifties who have an
extraordinary depth of experience.
"So you have to manage your career very smartly if you ever want
to get to the top and, when you do get there, the life expectancy
of the job continues to decline," he says.
He adds: "The fact that Carly Fiorina was in office for
five-and-a-half years, followed by a sudden departure, demonstrates
that many CEOs just can't get the job done -- even in a five-year
period. And with the average tenure less than that, the job of CEO
gets more and more difficult. You wonder why would anyone in their
right mind would want one of these jobs."
Contact: Dr. Leslie Gaines-Ross, 212.614.4341, [email protected];
William J. Holstein, 201.930.5959, [email protected]
| Year-Over-Year Totals | |||||
|---|---|---|---|---|---|
| Year | Total | Insiders | Outsiders | Insiders% | Outsiders% |
| 1999 |
42
|
27
|
15
|
64%
|
36%
|
| 2000 |
60
|
38
|
22
|
63%
|
37%
|
| 2001 |
58
|
36
|
22
|
62%
|
38%
|
| 2002 |
44
|
27
|
17
|
61%
|
39%
|
| 2003 |
85
|
55
|
30
|
65%
|
35%
|
| 2004 |
97
|
64
|
33
|
66%
|
34%
|
| Total |
386
|
247
|
139
|
64%
|
36%
|
| Mean |
64.3
|
41.2
|
23.2
|
||
| First Quarter 2004 | |||
|---|---|---|---|
| Month | Total | Insiders | Outsiders |
| Jan |
7
|
57%
|
43%
|
| Feb |
8
|
68%
|
38%
|
| Mar |
9
|
63%
|
38%
|
| Total |
24
|
64%
|
38%
|
| Mean |
8
|
||
| Second Quarter 2004 | |||
|---|---|---|---|
| Month | Total | Insiders | Outsiders |
| Apr |
9
|
56%
|
44%
|
| May |
7
|
86%
|
14%
|
| June |
4
|
75%
|
25%
|
| Total |
20
|
70%
|
30%
|
| Mean |
6.7
|
||
| Third Quarter 2004 | |||
|---|---|---|---|
| Month | Total | Insiders | Outsiders |
| July |
3
|
67%
|
33%
|
| Aug |
5
|
100%
|
0%
|
| Sept |
8
|
75%
|
25%
|
| Total |
16
|
81%
|
19%
|
| Mean |
5.3
|
||
| Fourth Quarter 2004 |
|||
|---|---|---|---|
| Month | Total | Insiders | Outsiders |
| Oct |
16
|
44%
|
56%
|
| Nov |
12
|
67%
|
33%
|
| Dec |
9
|
78%
|
22%
|
| Total |
37
|
59%
|
41%
|
| Mean |
12.3
|
||