New Study Reveals European Global 500 CEO Ousters On The Rise While North American CEO Turnover Declines

Wednesday, November 28, 2007 NEW YORK, November 28, 2007 – In a surprising shift, a new study reveals that European CEO departures among the 500 largest revenue-producing global companies increased 41 percent in the first three quarters of 2007 compared with the same period in 2006. According to the CEO Departures™ study by global public relations firm Weber Shandwick, departing European chief executives were also more likely to be forced out of office than North American and Asia Pacific CEOs during this 2007 time period.

In comparison, CEO turnover in North America continued to decline from 2006 to 2007 (from 8.7 to 6.7 percent) and Asia Pacific CEO turnover among the world’s largest companies somewhat stabilized (15.5 to 16.4 percent).

“These statistics reveal a growing disparity between North American and European CEO tenures. While North American CEOs appear to be enjoying somewhat more job security than ever before, European CEOs are now facing greater pressure to perform or pay the price,” said Dr. Leslie Gaines-Ross, Weber Shandwick’s chief reputation strategist and leading CEO reputation expert. “Despite regional differences, the fact remains that the chief executive position remains a treacherous one when you consider that over 10 percent of the world’s largest companies lost their CEOs in the first three quarters of 2007. This departure rate amounts to a CEO departure among the world’s largest-revenue producing companies nearly every 5 days.”


Trends in the Corner Suite
Weber Shandwick’s analysis identified several other significant changes in the global chief executive suite:

• Shown the Door in Q4? – 2007 saw more chief executives exit during the first quarter than the following two quarters (26 vs. 15 vs. 16, respectively) and when compared to the first quarter of 2006 (26 vs. 16, respectively). As the global economy faces greater upheaval this year, the fourth quarter of 2007 and the first quarter of 2008 should continue to witness high rates of CEO departures. The last quarter of 2006 had 22 CEO departures leading into the first quarter of 2007 with 26 CEO departures. Global boards are clearly trying to use the end and start of the year to clean house and get out the bad news out as soon as possible before the year unfolds.

• Ousted CEOs Rising – Overall, 28 percent of chief executives who left office in the first three quarters of 2007 exited involuntarily. European CEOs were more likely to be pressured to leave their jobs than their regional counterparts.  While only two European CEOs were forced out of office by the end of the third quarter in 2006, nine European CEOs exited involuntarily during the same time period in 2007 – a 350 percent increase.

• Insider CEOs Outpace Outsider CEOs – For the first three quarters of 2006 and 2007, insider executives continued to outnumber outsider executives when new CEOs were selected to lead the world’s largest companies.  Interestingly, 2007 had an even greater proportion of insider CEO successions than seen in 2006 (70 vs. 64 percent, respectively).

“Continued CEO turnover among the largest companies in the world, coupled with an uncertain economy, could signal trouble ahead.  Regardless of region, CEOs now face unprecedented scrutiny with little flexibility or forgiveness,” said Weber Shandwick President Andy Polansky. “To avoid surprises, it is imperative that companies not only perform well but also effectively communicate with their key shareholders, boards, employees, media and other stakeholders as transparently as possible.”


About CEO Departures™
Weber Shandwick’s CEO Departures study is based on an analysis of the global Fortune 500 companies.  For purposes of the study:

• Insider CEOs are defined as executives who have worked for the company for three or more years before being announced as the new CEO. 
• Outsider CEOs are defined as executives who either have never worked for the company or been employed by the company for less than three years before being announced as the new CEO. 

About Weber Shandwick
Weber Shandwick is one of the world's leading global public relations firms with offices in major media, business and government capitals around the world. The firm specializes in strategic marketing communications, media relations, public affairs, reputation management, and crisis and issues management. It also offers corporate communications counseling services. The firm provides specialized integrated services including Web relations, advocacy advertising, market research and visual communications. Weber Shandwick received the highest client-satisfaction honors in the 2007 Agency Excellence Survey by PRWeek U.S. and in 2006, was named Large PR Firm of the Year (PR News U.S.), European Consultancy of the Year (The Holmes Report) and Network of the Year (Asia Pacific PR Awards). The firm also won the 2005, 2006 and 2007 United Nations Grand Award for Outstanding Achievement in Public Relations. To learn more, please visit www.webershandwick.com.

Weber Shandwick is a unit of The Interpublic Group (NYSE: IPG), which is one of the world's leading organizations of advertising agencies and marketing services companies.