|By Bill Toland, Pittsburgh Post-Gazette|
|McClatchy-Tribune Information Services|
In a survey updated monthly, global outplacement consultancy
Last year, through four months, 403 U.S.-based CEOs had exited their jobs, meaning exits are up 14 percent year-over-year.
Dr. Winkenwerder's unexpected
Firings in quick succession are more rare — Dr. Winkenwerder's ouster came a bit more than two years after his predecessor,
And last year, troubled electronics retailer
Dr. Winkenwerder isn't the only health insurance executive to lose his job in May.
By far, health care has been the most-affected sector — largely due to its size relative to the overall U.S. economy and also because of its variability in the Affordable Care Act era. So far this year, according to Challenger, 105 health care CEOs have vacated their offices.
"The sector is going through a paradigm change," said
That's true in all sectors, said
"We're seeing a sea wave of change now," he said. Boards are becoming more aggressive, asserting their will over CEOs. In public companies, activist shareholders are becoming more vocal, demanding board seats or, in some cases, new corporate leaders.
And just last week, a proxy advisory firm recommended that seven of Target's 10 board members — those on the audit and corporate responsibility committee — be replaced.
Most boards aren't engaging in open civil war. The best boards,
Performance issues or philosophical differences with the board generally don't just crop up at one meeting, he said. "I assume there was a trend line that was somewhat discouraging,"
If that trend line is evident, a board's first job is to determine whether the performance issue is fixable and the "falling CEO" can be rescued. If the answer is no, it's time to go to Plan B, usually someone already inside the company. (Of the top 100 companies in the Fortune 500, 92 of them had elevated their CEOs from within the company,
Plan B for Highmark was
Two years ago, because of the suddenness of Dr. Melani's dismissal, there was no obvious backup plan. That's why Highmark retained executive search professionals to help find a CEO, and it's why Highmark ultimately settled on Dr. Winkenwerder, a Highmark outsider with
The instinct to conduct a nationwide search for Highmark's next CEO made sense at the time, but in retrospect the man who now holds the top job was under the board's nose two years ago. It goes to show how hard it can be to pick the right man or woman for the job,
"There's no silver bullet," he said. "Every situation is unique."
(c)2014 the Pittsburgh Post-Gazette
Visit the Pittsburgh Post-Gazette at www.post-gazette.com
Distributed by MCT Information Services