The parent company of the Super Fresh and Pathmark supermarket chains was blunt in what was expected to be a straightforward earnings report:
CEO Eric Claus is “leaving the Company effective immediately.”
Great Atlantic & Pacific Tea Co. Inc., of Montvale, N.J., said it would start looking for a successor. In the meantime, executive chairman Christian Haub will return to the CEO duties he held from 1998 until 2005. Great Atlantic didn’t elaborate on Claus’ departure, but Haub said in a statement that the “current challenging economy continues to impact our business.”
Given how the deep recession has affected corporate America, it’s only natural to expect a lot of CEO turnover. But that’s not happening.
Earlier this year, a Booz & Co. study of leadership change at the world’s largest 2,500 public companies found that CEO departures fell 0.5 percent in North America from 2007 to 2008. Of the 361 “succession events” globally in 2008, 180 were planned, 127 were forced and 54 were the result of mergers.
Leslie Gaines-Ross, chief reputation strategist for Weber Shandwick, said that corporate boards seem to be following the proverb “Better the devil you know than the devil you don’t.” With business weak and stock prices still below their peaks, boards don’t want to take a chance on replacing CEOs and make matters worse.
In fact, the tenure of CEOs in North America reached a median 7.9 years in 2008, up from 7.2 years over the 11 years that Booz, a management consulting firm, has analyzed turnover data.
Challenger, Gray & Christmas, a Chicago outplacement firm, says CEO turnover for the nine months ended Sept. 30 is down 17 percent.
In September, Challenger Gray counted 105 CEO departures, compared with 140 for the same month in 2008. A review of the data since the start of 2005 shows the largest number of departures was 152 in September 2006 while the smallest was 78 in April 2009.
Challenger Gray also groups leadership changes by the official reasons provided. In the first nine months of the year, 237 CEOs have resigned, 204 stepped down and 192 retired.
In fact, according to company press releases, more CEOs have apparently died (10) so far in 2009 than got fired (six).