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CEO turnover has picked up again

June 22, 2021, 9:51 AM UTC

Good morning.

CEO turnover picked up in the second half of 2020, after pausing in the first half. That’s the conclusion of a report from The Conference Board, Heidrick & Struggles and ESGAUGE, out this morning. For the full year, 11.6% of Russell 3000 companies changed CEOs, just slightly below 2019’s 11.9%, and in line with recent years.

And here’s an interesting finding: total shareholder return (TSR) had much less correlation with turnover than in previous years. In 2019, for instance, there was a 10 percentage point gap between the turnover rate at the worst performing quartile of companies (20.2%) and the other three quartiles (11.3%).  In 2020, that gap narrowed to 2 points (12.7% versus 10.5%). The report says the change may reflect companies’ increased focus on non-financial—or “ESG” —metrics.

“Personal misconduct” was the most frequent cause of unplanned CEO departures during the year. Some CEOs also attributed their departures to burnout, after a tumultuous year of crisis management.

Meanwhile, gender diversity among CEOs largely stalled. Among Russell 3000 CEOs, there was a net increase of only eight female CEOs—mainly at smaller companies. At year’s end, women still accounted for only 5.7% of the Russell 3000 CEOs.  

A few more data points:

—The average age of a departing CEO in the Russell 3000 was 61 years old.  The average age of an incoming CEO was 55.
—The average tenure of departing CEOs in the Russell 3000 was 7.2 years.
—Outsiders accounted for roughly a third of the incoming CEOs, while insiders accounted for two thirds.
—The three oldest departing CEOs were Norman Asbjornson of AAON (85), Leslie Wexner of L Brands (83) and Alan Miller of Universal Health (83). 

You can find the full report here. And Shawn Tully continues to track how Bitcoin’s price plunge is affecting its most prominent booster, Elon Musk, here.

Alan Murray
@alansmurray

alan.murray@fortune.com

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This edition of CEO Daily was edited by David Meyer.

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