Sure, maybe you want to be CEO because you’ve got a thing for $35,000 commodes. Maybe you’re just in it for the cash (slightly less than in the past, but you’ll find a way to soldier on). But you probably never thought of this perk: Being a CEO as profits plunge in a global financial meltdown might just be recession-resistant.
That’s the message from a new report by consulting firm Booz & Company. In its annual roundup of the comings and goings of CEOs from the world’s 2,500 largest public companies, they found that CEO departures in North America and Europe dropped from last year. (You can read the full report here.) Departures caused by strategic conflicts within companies also dropped.
“With stock prices plummeting, profits evaporating, and millions of workers worldwide joining the ranks of the unemployed, one might assume the chief executives of the world’s largest companies lost their jobs in dramatic numbers in 2008,” the report opines. “But that was not the case.”
The numbers are nothing groundbreaking – in North America, the number of departures overall dropped by just 0.5 percentage points – but their very boringness offers hope to chief executives that they can avoid applying for unemployment.
The stability at the top, of course, isn’t shared by every industry. In the financial-services industry, forced dismissals of CEOs were 158.8 percent higher than the historical average. In the volatile energy industry, corporate decapitations were 107.4 percent higher than the average.
Still, though, the overall stability led Booz to do some speculating: “Companies in a recession want a battle-tested captain at the helm.”
That is, of course, unless they screw up. “CEOs may have been granted safe harbor for the time being, but our view is that some will not weather the current storm, and as boards take stock of their new financial and competitive positions, turnover will once again rise.”
Our take? Boards of directors have read all about how expensive it is to get divorced during the recession. And when you have a cutie pie like Apache Corp. Chairman and CEO G. Steven Farris at the helm, who wants change?
- Monitor correspondent Jeremy Kutner contributed this post.