The study, conducted by advisory firm FTI Consulting, found CEO turnover accelerates even further when activist investors obtain board seats. An analysis of 2,500 companies shows the average 12-month CEO turnover rate is 16.6 percent, but the rate jumps to 28.4 percent when activist investors come into the picture — a 71 percent increase. When those activists gain seats on the board, 12-month CEO turnover rates hit 34.1 percent, according to the report.
Within 24-months, the presence of activists can increase CEO turnover 48 percent (from an average 30.9 percent without activists to 45.6 percent with activists). When activists gain board seats, 24-month CEO turnover hits 55.1 percent, according to the report.
The study suggests an activist investor’s presence — and desire to spur change — may drive increased turnover at the top.
Read the full report here.
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