‘Maybe Rich People Can See the Writing on the Wall’: CEOs Stepping Down at Levels Not Seen Since 2008

By Eoin Higgins, staff writer at Common Dreams. Originally published at Common Dreams

A record number of CEOs left their positions in October, a corporate outplacement firm reported Wednesday, the most in one month since the 2008 recession.

The news from Challenger, Gray & Christmas raised eyebrows—and concerns over a possible incoming recession—Wednesday evening at progressive news co-op The District Sentinel‘s radio show.

“Maybe this means nothing, maybe this is a coincidence,” said show co-host Sam Sacks. “Or maybe rich people can see the writing on the wall and are cashing out right now.”

Sacks and co-host Sam Knight weren’t the only ones who saw the news as possibly indicative of economic upheaval on the horizon.

“Sign of a recession?” wondered Globe and Mail reporter Paul Waldie.

According to Challenger, Gray & Christmas’ report, 1,332 CEOs have already left their companies, far outstripping the total 1,257 departures by this time in 2008. A total 1,484 CEOs left their positions by the end of 2008.

In a press release, Challenger, Gray & Christmas explained some of the turnover as the result of executive misconduct, succession plans, and normal changes in personnel. But even by those standards, 2019 stands out.

As The Chicago Tribune reported, October was a high water mark for the year:

In October, 172 chief executives left their posts, compared with 151 CEOs in September and 149 in October 2018, according to outplacement firm Challenger, Gray, & Christmas. That brings the 10-month tally to 1,332 CEOs who are out—the highest number since 2002, when the firm began tracking CEO departures at companies that have been in business at least two years and have at least 10 employees.

“Succession plans and misconduct aside, 172 in one month?” market researcher Danielle DiMartino Booth tweeted incredulously.

October’s numbers beat the previous record, set in August.

Challenger, Gray & Christmas’ vice president Andrew Challenger acknowledged to NBC News that the numbers were more akin to times of economic downturn than to the current era of relative stability.

“You expect a high turnover during a recession period,” said Challenger. “To see more turnover during a period where companies are doing very well is surprising.”

In a statement announcing the departure numbers, Challenger downplayed the possibility of economic disaster and framed the personnel changes as part of the normal course of business.

“We’ve seen the majority of CEOs leaving amid normal succession plans,” said Challenger. “Meanwhile, after a decade of expansion, companies that started ten years ago are finding themselves in a phase where new leadership is needed. Other companies are adapting to changing technologies or finding new leadership based on current economic conditions and forecasts for the coming year.”

But, as Common Dreams reported last month, there are other signs of possible economic trouble ahead. A number of late October moves by the Federal Reserve to pump cash into the economy set off alarm bells on Wall Street, prompting Northman Trader’s Sven Heinreich to wonder, “What is the Fed not telling us?”

The inverted yield curve—a sign of coming recession—that surfaced in October further suggested to The District Sentinel‘s Sacks that the CEO exodus could be a sign of imminent economic disaster.

“Maybe these CEOs are seeing that inverted yield and are just like, ‘yeah, let’s just take our golden parachutes and get the fuck out of here,'” said Sacks.

“That’s probably correct,” said Knight.

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20 comments

  1. JTMcPhee

    Too bad no long scaly tails of liability for the “really smart policies” so many of these “folks” have birthed will follow them. What’s the range of gilded parachutes under which these bailouts are departing?

    I suppose a mope should not be surprised that there’s a claque of 10 percenters that follow the careers of these pampered creatures. Are there “ trading cards” for the C-suite-ers like for baseball players?

    Anyone going to claw any of their tailored CEO ™ backs to get a little return on the “compensation packages?”

    Reply
    1. Jeremy Grimm

      I don’t know how much merger activity has gone on, from one year to the next. The raw number of CEO departures might acquire a more ominous shade when combined with the total number of CEO jobs available. And if there has been a great deal of recent merger activity then how many of the departing CEOs are leaving because their job is gone — a thinning of predators so those who remain can grow fatter — as the content of your reference might suggest.

      Reply
  2. Jesper

    For people below the rarefied heights of the CEOs then some things are the opposite of what is written here:

    “You expect a high turnover during a recession period,” said Challenger. “To see more turnover during a period where companies are doing very well is surprising.”

    During the latest Irish recession the low paid stayed put as finding a new job was/is more difficult during a recession, when the economy was booming then job-hopping was more common as there were plenty of jobs.

    A stronger indicator might be about who gets the positions left. Here it might be similar to what lower paid experience: If the job is good then friends will push for you to get it, if the job is bad then friends will tell you to stay away. I am not sure how to word this, my apologies if I offend now: My expectation is that if the CEO positions are filled by people from the old boys network then recession might not be so near, if the positions are filled by people from outside of the old boys network then I see an indicator of trouble ahead. How to tell/guess if the people come from outside of the old boys network might possibly be seen as discriminatory.

    Reply
    1. Jeremy Grimm

      I think you may have identified a good indicator for how to assess the CEO departures as an portent of bad times ahead. I can see how someone currently enthroned as a CEO might move to a more lofty throne, and might would make use of the old boys network to help make a choice between options. But for those moving into the CEO’s chair from below, and presumably receiving fewer offers, I wonder how bad things would have to be for them to stay away from a CEO position. The financial perks seem pretty nice for even a crummy CEO position.

      Reply
  3. timbers

    The Fed and Corporate Media have been so focused on Wall Street as if were the only thing that matters and the horror of any hint of recession, the result is QE and rate suppression have become permanent policy
    even when the economy is OK.

    Unfortunately this can go on for a very, very long time…look at Japan.

    IMO tightened monetary policy and probable resulting recession would like medicine, as it would purge many of the fake zombie companies like WeWork, Uber, Netflix, etc, and drain the swamp. Their demise would become the financial fertilizer that would lay the ground work for real business that would better contribute (yes that’s a Milton Friedman quote he did get some things right). It is also a needed first step to ending the QE and rate suppression that is causing a huge wealth divide.

    But, look how quickly and completely Powell reversed his polices back to QE and rate suppression when Mr Market told him enough is enough.

    Like you guys say, Trump says the quite part out loud. Past Presidents kept an eye firmly on Wall Street as if it were the actual economy. Trump goes further and says that often and loud.

    Reply
    1. notabanktoadie

      Imagine if the means to lower interest rates were ethical such as equal fiat distributions to all citizens and not our current policy of welfare for the banks and the rich?

      Reply
      1. Trent

        ember 8, 2019 at 8:12 am
        “The Fed and Corporate Media have been so focused on Wall Street as if were the only thing that matters and the horror of any hint of recession, the result is QE and rate suppression have become permanent policy even when the economy is OK.”

        Why do you think they’re scared of a recession? Perhaps the last one never ended, perhaps we’ve been in one since 2000. The last one took the blinders off that they can’t afford a “recession” so they’ve got the monetary pedal to the metal. The next leg down will be the last.

        Reply
        1. Amfortas the hippie

          aye.
          I think it was Ilargi a few months ago that had a big rant(with links/footnotes) about how there hasn’t been any actual “Growth” since the 70’s…it’s all been paper and cardstacking and plates spinning in the air for the rubes to look at and marvel.
          the surreality of it all was almost exposed in 07-08, when someone at Bear left a window open, and some light shown in and people saw that it was mostly hot air and prayers.
          I admit that i enjoyed watching erin burnett freak out on live television…and there’s a reason that high school “economics” half semesters are so shallow and/or cheerleading.
          one of these days, the wall of the funhouse will collapse, and the People will spill out, face down in the mud….and be mad as hell.
          the problem is that there’s no readily identifiable Bastille or Versailles…i mean, sure, lower manhattan, the hamptons…but the perps will be long gone by the time the huddled masses arrive.

          post-9-11, in my Latoc, Doomer days, there was a website(can’t remember) that had live feed to the docks around manhattan island, where the Ur-Criminals kept their escape craft…apparently there was quite a bit of truck in that sector for a while.
          and latoc had a guy who lived close to teeterborough(sp-2) who would occasionally report about the leer jet traffic, as a possible indicator that things were going to hell.
          something to keep an eye on,lol.

          Reply
          1. RBHoughton

            The 1970s was when John Seymour wrote his amazing tract on “Self Sufficiency” He utilised a quarter acre of land to produce abundance for a family of four. Still doable if you get valley land with access to a nearby river.

            Reply
          2. Ed

            I mean I think our current recovery is fake, but to say there’s been no growth is probably false. The personal computer added so much value to the worlds economy that I can’t imagine we had no growth in the 80s and 90s. However, I think it would be fair to say the tech bubble way overshot the potential value of the computer in the workforce, and perhaps since the late 90s its all been smoke and mirrors.

            Reply
          3. drumlin woodchuckles

            @Amfortas the hippie

            Have you noticed that Ian Welsh runs Tony Wikrent’s weekly economic roundup report every Sunday now? ( Reliably, too). And it often referrences articles it found on Naked Capitalism.

            Why bring this up? Because if you were to bring some “Acres USA related” economic comments to Ian Welsh’s ” Tony Wikrent Report” comment thread, people might see them over there who would miss them over here due to the millions of fresh words that fall on top of them every single day over here.

            Whereas, there are so many fewer words over there at Ian Welsh’s Sunday Wikrent Report that any words you brought there about “parity economics” and other such things would be more likely to be seen. And also much easier to be found by people who remember having seen them and would like to go back and find them.

            Reply
  4. Barbara

    I am a visual thinker rather than a verbal one, so it’s sometimes hard for me to get the words right for people to understand my point.

    The best I can do this morning is point the analysts in this story to the previous story Energy vs. Waste. There’s a message for them there.

    Reply
  5. flora

    I’ve had a couple of interesting discussions with some bankers (real bankers) about the Fed continuing to cut rates in a ‘good’ economy. It doesn’t make sense… if the economy is good.

    The bankers said something about this possibly an indication of liquidity problems in the TBTF banks; they’re desperate for cash now that several bubbles are getting close to blowing up – student loans debt bubble, health care costs debt bubble, pension liability bubble, etc. This was a guess on the bankers’ part.

    Anecdotal.

    Reply
  6. Danny

    A local manifestation of that is a journal that is dumped on our San Francisco doorstep quarterly.

    The Nob Hill Gazette is a slick, clay-coated paper series of uber expensive real estate listings, (five millon dollars the average price), full page jewelry ads with courtesy gossip columns and ample photographs of Society husbands and wives at the opera opening, gay couples in outrageous outfits, social climbers and other adventuristes on the margins of money.

    A noteworthy pattern is not what’s in it, but is no longer in it as it once was: Corporate executives and old money tied to banks and corporations. Those people have become seemingly camera shy over the last couple of years. Sure, the third wife of their kid might be pictured in Caroline Herrera, but the old guard, is now practically invisible.

    As a joke, I walked the dog and took a bunch of copies of this gathered from nearby recycling bins where most copies end up on the day it was delivered, then dropped them off a local pool hall in a very rough neighborhood where I’m safe since I went to school with some of the guys.

    “Hey, why break into cars, working class people’s places and rob tourists when there’s opportunities like these?”

    Reply
  7. Conrad

    Getting out before the company goes down would be my guess. Time it right and the CEO won’t face any clawbacks. Here in NZ anything older than 2 years from the time the company became unable to pay its debts is safe from the liquidator (broadly speaking). I imagine the US insolvency laws say something similar. These guys (and they’re mostly all guys still) already have enough money to last a lifetime. So why stick around and wait for the unpleasant implosion?

    Reply
  8. drumlin woodchuckles

    Peoples’ thinking about ” the economy” is so dominated by money and the money-measured economy that they miss the fact of eco-bio growth outside of the monetized and money-measured economy.

    One could speak of the “busheconomy” ( de-monetized subsistence in the bush) and the moneyconomy ( the fully monetized economy of getting and spending . . . getting and spending money on all the things which ONLY money can buy).

    If you are lucky enough to live on a real yard with a real house on it, you are perhaps able to create your own little bit of personal subsistence busheconomy. If you are lucky enough to have a job too, then you have your own personal moneyconomy. If you get no raise and no extra hours, you have zero personal moneyconomic growth. But if you turn some of your yard into a garden and you get real food from it, you have some personal busheconomic growth. Can this concept be scaled up to regionalocal or even national-scale societies?

    If a tomato is grown and eaten in the forest and no cash registers ring, did it ever exist?

    Reply

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