Greater scrutiny forces CEOs out

CHICAGO - Top executives at United States companies switched jobs more than twice as often in the first half of this year as in 2005 as managers came under greater pressure from regulators and shareholders.

A total of 15,650 managers from chief executives to vice-presidents changed jobs, more than twice the 6489 who did so in the first six months of last year, said a study by Liberum Research of New York.

Elise Walton, director of corporate governance practices at Mercer Delta Consulting in New York, said the pressures of complying with the Sarbanes-Oxley Act of 2002 and shareholders' demands for better performance might be leading some executives to retire early and forcing others out.

"The public scrutiny has increased," she said.

Of the executive changes, 1461 were chief executives, up 44 per cent from 1018 in the first half of 2005, said Liberum.

Comverse Technology chief executive Kobi Alexander, 54, resigned on May 1 after the world's largest maker of voicemail software discovered errors in its stock-options accounting.

The company had said earlier that it would restate earnings back to 2001 after a committee of outside directors found that dates of some grants might have been inaccurate.

John Alm, 60, stepped down as chief executive of Coca-Cola Enterprises on January 1 after profit at the world's largest soft-drink bottler had fallen in five of the previous six quarters. The company in April named former InBev executive John Brock, 58, to the job.

PepsiCo chief executive Steve Reinemund, 58, is to retire in October from the world's second-largest soft-drink maker by sales to spend more time with his wife and children. Reinemund, who increased the company's stock market value 65 per cent in his five years at the helm, had been considering retiring since last year, a spokeswoman said.

Among the other notable chief executives who changed jobs in the first half of the year were Goldman Sachs Group's Henry Paulson, 60, who said in May that he would step down to become US Treasury Secretary.

Another was Nike's William Perez, 60, who quit in January after disputes with chairman Philip Knight.

The pressure has not been just on chief executives.

Some 1256 chief financial officers left their companies this year, up from 881 in the first six months of last year.

"If the financial performance is not good enough, they're just as likely to be under the gun as we see CEOs today," said Leslie Gaines-Ross of New York public relations firm Weber Shandwick, a unit of the Interpublic Group.

- BLOOMBERG