Turnover among CEOs remains high as corporate boards move more quickly to replace underperforming executives, a new study by the consulting firm Booz Allen says.
From 1995 to 2006, the study says, annual CEO turnover grew 59%, while performance-related turnover increased 318%. In 1995, one in eight departing CEOs was forced from office, while nearly one in three left involuntarily last year.
Total turnover actually declined slightly last year, the study says. Over 14% of CEOs at the 2,500 largest public companies left office in 2006, compared with just over 15% in 2005.
Other findings in the survey:
--boards are focusing more on grooming in-house leaders and less on outsider and interim CEOs because of disappointing results.
--The number of CEOs leaving due to conflicts with the board increased from 2% in 1995 to 11% between 2004 and 2006.
--22% of all CEO departures in 2006 resulted from mergers or buyouts, compared to 18% in 2005.
--The average CEO tenure worldwide has increased to 7.8 years, while North American CEOs last a bit longer, clocking in with approximately 9.8 years on the job. Only Europe experienced a decline to 5.7 years.
--A CEO who delivered above-average returns was nearly twice as likely as one delivering below-average returns to remain CEO for more than seven years. In 1995, underperforming CEOs stayed in office as long as their high-performing colleagues.