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Interesting piece from Bloomberg about CEO turnover, noting that after three years of declining “churn,” “the rate of corner-office shakeups has picked up as more boards replace veteran CEOs with younger leaders with different résumés. Many new chief executives have international experience and a track record in marketing or sales rather than finance or manufacturing, the specialties of CEOs two or three decades ago. They also haven’t necessarily spent their careers at one company or in a single industry.”

One example cited in the article: “Campbell Soup Co. Chief Operating Officer Denise Morrison. She will become CEO in August, after zigzagging from Procter & Gamble Co. and PepsiCo Inc. to Nestlé SA, Nabisco Inc, and Kraft Foods Inc., before joining the soup maker eight years ago.”

According to the story, “ The rush to change corporate leadership is a turnabout from the management standstill that set in during the financial crisis. CEO turnover declined from 12.7 percent in 2007 to 9.4 percent last year, according to a study of Standard & Poor’s 500 Index and Fortune 500 companies by executive search firm Crist/Kolder Associates in Chicago. One likely reason: Boards were reluctant to change leadership during the recession, concerned that if a CEO left, investors might think the company was coming unglued ...   Boards today want CEOs who have run an international business, traveled extensively overseas, and have connections with executives and government leaders around the world -- experiences they need to oversee big companies that often can derive as much as half, or even more, of their revenue from foreign markets. Being a director of a public company also counts in an era of heightened corporate governance when CEOs must work more closely with their boards -- and often report to a nonexecutive chairman.”

The story goes on: “With the economy recovering, Crist/Kolder is predicting a return to double-digit corner-office turnover at big companies in 2011 and 2012, according to Chairman Peter Crist. ‘We’re going into a 24-month cycle of CEO volatility,’ he said. ‘Since companies are now compared to competitors on proxy statements, there’s heat on boards to change leaders who aren’t getting results.’

“New corner-office occupants have fewer gray hairs; recruiters say executives approaching 60 are today often bypassed in favor of younger candidates. They also expect to serve shorter tenures: six to eight years versus 10 to 15 years a generation ago, according to a Booz & Co. study of CEO succession from 2000 to 2009.”
KC's View:
I’m sure the analysts are right, but does it strike anyone else as worrisome that CEOs are going to be judged on the basis of short-term financial results rather than long-term equity building? Isn’t this, in part, how the economy got into trouble to begin with - people and companies focused on short-term profits rather than long-term viability and credibility?