Management Turnover as Change Agent

Friday, October 19, 2012

Executive Turnover Looking to Grow After Election

Executive Turnover Looking to Grow After Election

2005-2012 Total Quarterly C-level ChangesJob growth and unemployment remain serious problems for the North American economy.  Executive turnover continues to serve as one of the few positive bright spots within the United States and Canadian economies.  For the last year overall executive turnover has remained high, a huge change from the declining numbers registered in the previous years during the height of the financial crisis.  Unlike growing unemployment numbers, turnover at the top typically portends positive economic growth in the near future.  While executive turnover numbers have moved off of trending highs, they have continued to follow a growth pattern over the last year.

Liberum Research continues to remain optimistic about the impact the growth in executive turnover will represent for the United States and Canadian economies.   For the last number of years through the financial and economic crisis, executive turnover at the top ranks of public companies was extremely low.  Caution rained supreme.  Companies cut budgets and employees but were loath to change top executives unless they absolutely had to. The order of the day was to keep the captains of the ship in place.   For the last year and a half, Liberum Research has seen a real shift in this trend.  Executive turnover overall has continued to rise while overall employment has finally showed signs of some growth.  We expect the employment numbers will continue to improve, while slowly, as we move into the late fall and winter.  Once the election is over, we expect the employment numbers will continue to improve and executive turnover will grow.
Liberum has put together below a nearly eight year quarterly breakdown of executive turnover totals for CEOs, CFOs and C-level executives covering North America. Most of the below quarterly numbers showed continuing declines until the second quarter of 2011.  At this point, the numbers began to reverse themselves.  Turnover at the executive levels of corporate America began to grow.  Companies began again to consider new blood and often looked to change their corporate strategies as kernels of opportunity began to sprout ever so slightly.  Anyone investing in the market must pay special attention to executive turnover both at the top and the middle executive ranks.  Failure to do so, will result in lost opportunities or worse.
Below are three simple graphics outlining the quarterly turnover totals as registered through Liberum’s Management Change Database for 2008 through the third quarter of 2012 for CEO, CFO and overall C-level turnover.

2005-2012 Total Quarterly CFO Changes

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