Good morning.
CEO turnover picked up in the second half of 2020, after pausing in the first half. That’s the conclusion of a report from The Conference Board, Heidrick & Struggles and ESGAUGE, out this morning. For the full year, 11.6% of Russell 3000 companies changed CEOs, just slightly below 2019’s 11.9%, and in line with recent years.
And here’s an interesting finding: total shareholder return (TSR) had much less correlation with turnover than in previous years. In 2019, for instance, there was a 10 percentage point gap between the turnover rate at the worst performing quartile of companies (20.2%) and the other three quartiles (11.3%). In 2020, that gap narrowed to 2 points (12.7% versus 10.5%). The report says the change may reflect companies’ increased focus on non-financial—or “ESG” —metrics.
“Personal misconduct” was the most frequent cause of unplanned CEO departures during the year. Some CEOs also attributed their departures to burnout, after a tumultuous year of crisis management.
Meanwhile, gender diversity among CEOs largely stalled. Among Russell 3000 CEOs, there was a net increase of only eight female CEOs—mainly at smaller companies. At year’s end, women still accounted for only 5.7% of the Russell 3000 CEOs.
A few more data points:
—The average age of a departing CEO in the Russell 3000 was 61 years old. The average age of an incoming CEO was 55.
—The average tenure of departing CEOs in the Russell 3000 was 7.2 years.
—Outsiders accounted for roughly a third of the incoming CEOs, while insiders accounted for two thirds.
—The three oldest departing CEOs were Norman Asbjornson of AAON (85), Leslie Wexner of L Brands (83) and Alan Miller of Universal Health (83).
You can find the full report here. And Shawn Tully continues to track how Bitcoin’s price plunge is affecting its most prominent booster, Elon Musk, here.
Alan Murray
@alansmurray
[email protected]
TOP NEWS
Solar panels
The Biden administration may ban imports of Chinese polysilicon, a crucial material inside most solar panels, over human rights abuses in Xinjiang province—the source of around half the world's polysilicon supply. South China Morning Post
Facial recognition
The EU's privacy regulators have called for a new A.I. Bill to include a general ban on real-time facial recognition in all publicly accessible spaces. The European Commission's original proposal for the bill is much less strict on that issue, but the watchdogs' intervention is likely to influence co-legislators—the European Parliament and Council—as they negotiate the text. Coins2Day
Google antitrust
The European Commission's antitrust division has opened yet another formal investigation into Google, this time regarding its display advertising technology practices, which the Commission thinks may disadvantage ad-tech rivals, advertisers and publishers. Reminder: The Commission has already hit Google with $9 billion in fines over the last several years. Coins2Day
Amazon antitrust
New antitrust legislation proposed by Pramila Jayapal, a Democratic Representative from Amazon's hometown of Seattle, would force the company to sell its valuable logistics business. The bill, which has bipartisan support, would stop Amazon from using preferential treatment on its platform to tempt merchants into opting for its logistics services. Bloomberg
AROUND THE WATER COOLER
U.S. Vaccines
The U.S. Is going to fall short of its commitment to ship 80 million COVID-19 vaccines abroad by the end of the month. Only 10 million doses have been shipped thus far. The blockers are apparently legal, logistical and regulatory in nature. Coins2Day
Pacific U.K.
The U.K. Is trying to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) free-trade club, whose existing members are all notably more connected with the Pacific than the U.K. Is. If the Brits were to get accepted, theirs would be the second-largest economy in the CPTPP, after Japan's. The benefit to the U.K.? A whopping 0.08% GDP boost compared to pre-Brexit levels, according to the government's own projection. BBC
Death cross
Bitcoin is tangled up in a "death cross"—a gnarly name for the average price over the last 50 days dropping below the 200-day moving average. The cryptocurrency has encountered death crosses before: one presaged a further decline while the other came before a "golden cross" reversal. So, as ever with Bitcoin's garbled trajectory, who knows? Coins2Day
Tax pushback
The Financial Times has an interesting interview with Bermuda's finance minister, Curtis Dickinson, who is very much against the push for a minimum corporate income tax around the world. Bermuda doesn't tax company profits. Dickinson: "We have a system in place for 200 years. It's not perfect. It does require some adjustment. But we would like to do that on our own and not have someone tell us to change our system to fit some global initiative…I would say it's a sovereignty issue." FT
This edition of CEO Daily was edited by David Meyer.
