Now, CEO Layoffs

IT'S been impossible lately to escape complaints about corporate chief executive officers who lay off thousands of employees while reaping ever-higher salaries, bonuses, and perks. In many high-profile cases, that's accurate. But now a new survey indicates that CEOs' job prospects aren't so rosy, either.

Challenger, Gray & Christmas Inc., an international outplacement firm that tracks layoffs, says CEOs are facing more pressure than ever to show results - or else. In its survey of 195 corporate personnel executives, 71 percent cite increased pressure to make changes - brought on by growing competition and shareholder demands for short-term gains - as the factor most responsible for declining CEO tenure.

It cites one survey of 1,188 US companies that shows CEO turnover increasing at more than 25 percent of those firms during the last three years.

Another study by the Northwestern University Kellogg Graduate School of Management reveals an increase of 45 percent in CEO turnover at 413 companies from 1987 to 1992. The Challenger survey shows that the average number of companies for which the CEO had worked was 3.7.

The executives that Challenger polled say a 5-to-10-year term is about right before a CEO begins to lose his or her effectiveness. Five years certainly seems a short time for a company that is trying to implement long-range planning. And too much management change can itself create an unstable company environment damaging to employee morale and performance.

None of this speaks to CEO salary and benefits, of course. But it shows that the evolution to a new economy affects everyone.