According to new research by advisory group FTI Consulting, first reported by Bloomberg, CEOs are twice as more likely to leave their post if an activist investor obtains board seats.
The conclusion was drawn from an analysis of CEO turnover at 2,500 companies and 300 activist investor contests between 2011 and 2015.
Normal average CEO turnover was 16.6% within a year and 30.9% within two, the analysis found. But when an activist investor gained board seats, CEOs stood down 34.1% and 55.1% of the time in the respective periods.
And it turns out CEOs are more likely to leave even if activists don’t obtain board seats, with their mere presence in the company triggering an exit rate 71% greater than normal.
“It seems natural that there would be an increased rate of CEO turnover, but activists generally don’t publicly target the CEO for replacement,” FTI’s Steve Balet said.
American companies are increasingly being targeted by the likes of Carl Ichan and Dan Loeb, while recent research by Arizona State University shows female CEOs are four times more likely to find themselves in the cross-hairs.
CEOs keen to hold onto their jobs may want to consider these six preparation tips recently laid out in Chief Executive.
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1:00 - 5:00 pm
Over 70% of Executives Surveyed Agree: Many Strategic Planning Efforts Lack Systematic Approach Tips for Enhancing Your Strategic Planning Process
Executives expressed frustration with their current strategic planning process. Issues include:
Steve Rutan and Denise Harrison have put together an afternoon workshop that will provide the tools you need to address these concerns. They have worked with hundreds of executives to develop a systematic approach that will enable your team to make better decisions during strategic planning. Steve and Denise will walk you through exercises for prioritizing your lists and steps that will reset and reinvigorate your process. This will be a hands-on workshop that will enable you to think about your business as you use the tools that are being presented. If you are ready for a Strategic Planning tune-up, select this workshop in your registration form. The additional fee of $695 will be added to your total.
2:00 - 5:00 pm
Female leaders face the same issues all leaders do, but they often face additional challenges too. In this peer session, we will facilitate a discussion of best practices and how to overcome common barriers to help women leaders be more effective within and outside their organizations.
Limited space available.
10:30 - 5:00 pm
General’s Retreat at Hermitage Golf Course
Sponsored by UBS
General’s Retreat, built in 1986 with architect Gary Roger Baird, has been voted the “Best Golf Course in Nashville” and is a “must play” when visiting the Nashville, Tennessee area. With the beautiful setting along the Cumberland River, golfers of all capabilities will thoroughly enjoy the golf, scenery and hospitality.
The golf outing fee includes transportation to and from the hotel, greens/cart fees, use of practice facilities, and boxed lunch. The bus will leave the hotel at 10:30 am for a noon shotgun start and return to the hotel after the cocktail reception following the completion of the round.
