CEO Turnover in Chicago: A Reflection of Changing Times

Strategic Insights -

As the Chicago area's largest public companies face an economic downturn, a wave of CEO turnover has swept through the region. Eight of the city's 25 biggest companies have hired new CEOs since the last published annual ranking, with almost half of the area's largest companies turning over leadership since the turn of the century. This shift in leadership is not unique to Chicago, with about 20% of Fortune 700 CEOs having been in their current position for one year or less. Executive-suite shakeups are becoming commonplace, with fewer top executives staying long term. While the market generally reacts negatively to succession announcements, some experts view the CEO turnover as a positive infusion of new blood in the area.

Key Takeaways:

  • Eight of Chicago's 25 largest public companies have hired new CEOs since the last annual ranking, including Boeing Co., Kraft Foods Inc., Motorola Inc., and R. R. Donnelley & Sons Co.
  • Almost half of the area's largest companies have turned over leadership since the turn of the century, with companies such as Tribune Co., Walgreen Co., and Sears, Roebuck and Co. changing CEOs in recent years.
  • The average CEO tenure in Fortune 100 companies is about six years, with 22% of CEOs having been with their company for more than 35 years five years ago, compared to 10% today.
  • About 20% of Fortune 700 CEOs have been in their current position for one year or less, according to a 2004 report by Spencer Stuart.
  • Executive-suite shakeups are becoming commonplace, with fewer top executives staying long term.
  • Companies are looking for a different kind of CEO, someone who is visionary and can move the company forward, says John Challenger, CEO of Challenger Gray & Christmas Inc.

Statistics:

  • 20% of Fortune 700 CEOs have been in their current position for one year or less (Spencer Stuart, 2004)
  • Average CEO tenure in Fortune 100 companies is about six years
  • 22% of Fortune 100 CEOs had been with their company for more than 35 years five years ago, compared to 10% today
  • 8 new CEOs have been hired by Chicago's 25 largest public companies since the last annual ranking (Crain's, 2004)

Sources:

  • Crain's (2004)
  • Spencer Stuart (2004)
  • Chicago Sun-Times (2004)
  • Businessweek (2004)