OPERATIONS

Survey: Sustained CEO turnover in retail companies

BY Marianne Wilson

New York City — Retail companies are experiencing a period of sustained turnover at the top, according to the a new report by Russell Reynolds Associates, which examined turnover and recruitment trends between January 2006 and April 2011 at 81 retail chains headquartered in the United States with annual revenues of $1 billion or more.

The study,” A Perfect Storm: CEO Challenges in Retail,” found that 59% of the retail companies studied experienced a change in CEO leadership during this five-year period.
In other findings:

  • Retail companies have a harder time than other companies in selecting CEOs that “stick.” Forty-two percent of the CEOs who left did so having served five years or less, compared with 32% of Fortune 1000 CEOs. More important, more than a quarter (27%) left after serving three years or less. In contrast, only 16% of Fortune 1000 CEOs who stepped down during the same time period did so having served three years or less.
  • While most boards traditionally prefer to fill CEO slots with current CEOs, there simply are not enough sitting CEOs to meet demand. Of the 18 external CEO appointments made during the period studied, only eight were sitting CEOs making a lateral move.
  • Retail companies seeking a new CEO are further constrained because of the tendency to recruit from the circle of immediate competitors rather than casting a wider net. Of the 18 retail CEOs in the report’s five-year sample who were recruited externally, 16 — or 89% — were recruited from the same subsector of the retail industry.
keyboard_arrow_downCOMMENTS

Leave a Reply

E.Duer says:
Mar-28-2012 02:22 am

The problem with this story
The problem with this story is that it’s not true. The facts, revealed this year by Booz & Company’s annual study of CEO turnover at the world’s largest companies, suggest the opposite. To be sure, corporate boards have indeed become somewhat more likely to dismiss their chief executives since 2000 than in the previous decade. But there is no evidence that those boards are moving hastily to fire CEOs because of poor short-term results, according to our analysis of 10 years’ worth of data. In fact, we find that even the worst-performing CEOs face a low probability of being forced from office in the short term. Rather, the uptick in dismissals is due largely to an increase in board struggles.

E.Duer says:
Mar-28-2012 02:22 am

The problem with this story is that it’s not true. The facts, revealed this year by Booz & Company’s annual study of CEO turnover at the world’s largest companies, suggest the opposite. To be sure, corporate boards have indeed become somewhat more likely to dismiss their chief executives since 2000 than in the previous decade. But there is no evidence that those boards are moving hastily to fire CEOs because of poor short-term results, according to our analysis of 10 years’ worth of data. In fact, we find that even the worst-performing CEOs face a low probability of being forced from office in the short term. Rather, the uptick in dismissals is due largely to an increase in board struggles.

Polls

Consumer confidence is high. Is that reflected in your stores’ revenues?

View Results

Loading ... Loading ...
OPERATIONS

NRF Annual Convention kicks off Sunday

BY Staff Writer

New York City — The National Retail Federation’s 101st Annual Convention and EXPO kicks off Jan. 15 at the Jacob Javits Convention Center in New York City. The four-day event will feature topics ranging from digital and mobile retailing to the evolution of the retail store to economic trends and trends in consumer spending. Former President Bill Clinton is the featured keynote speaker on Jan. 17.

NRF’s 2012 BIG Show is expected be the biggest and best yet — drawing more than 22,000 retail professionals and hosting more than 420 exhibiting companies, with 85 different countries expected to be represented. This year’s Convention will place a special emphasis on retail’s significant role in driving the economy, offering ways for attendees to get engaged in NRF’s Retail Means Jobs campaign to advance innovation and growth in the retail industry.

keyboard_arrow_downCOMMENTS

Leave a Reply

No comments found

Polls

Consumer confidence is high. Is that reflected in your stores’ revenues?

View Results

Loading ... Loading ...
News

Consumer confidence up

BY CSA STAFF

New York City — Consumer confidence rose more than forecast in January, reaching its highest level in eight months amid signs of an improving labor market.

The Thomson Reuters/University of Michigan preliminary index of consumer sentiment increased to 74 from 69.9 at the end of December. The median estimate in a Bloomberg News survey called for 71.5. The measure has increased 9.9 points in the last two months, the biggest such gain since April-May 2009.

Estimates of economists in the Bloomberg survey ranged from 68.5 to 77. The gauge averaged 89 in the five years leading to the last recession.

keyboard_arrow_downCOMMENTS

Leave a Reply

No comments found

Polls

Consumer confidence is high. Is that reflected in your stores’ revenues?

View Results

Loading ... Loading ...