Despite heavy layoffs in the lower ranks this year, job stability has been higher in the C-suite, creating yet another disparity between executives and their workers.
Executive search firm Spencer Stuart reports that turnover has slowed to just 26 CEO changes among the Standard & Poor's 500 companies during the first half of 2009, compared with 36 for the same period last year.
Broaden the universe to some 13,000 public companies and there are double-digit declines in CEO job shifts, according to Liberum Research, which tracks management changes for hedge funds. "That's kind of counterintuitive" for a recession, says Richard Jacovitz, Liberum's director of research. "As companies cut back, you would think that top executives would get impacted, too."
The volatile environment has made directors skittish. When the economy soured, notes Korn/Ferry International Vice-Chairman Joe Griesedieck, "A lot of boards pulled in their horns and said, 'let's stick with our guy through the tough times.'"
But that means middling performers may get cut more slack. Matthew V. McGreal, a principal at search firm Crist/Kolder Associates, says: "It's perceived that the greater risk is to make the move" unless performance is "atrocious." And tough times tend to mask mediocrity.
Source: BUSINESSWEEK, September 7, 2009
