Exiting Executives

John J. Burke and Joseph M. Segel have been running multimillion-dollar businesses, but they run them no more. Burke, 50, spent last week with his family, skiing on their favorite mountain, Ajax, at Aspen, Colo. Three weeks ago he resigned unexpectedly as president and chief executive of Automation Industries Inc., after "a difference in philosophy" with the company's founder-chairman. Segel, 42, prepared to leave the Franklin Mint, the world's largest producer of coins and medals for collectors, which he founded. He retires this week as chairman, five years after he voluntarily began easing out so that he could focus on his other interests, including the United Nations Association, whose board of governors he heads, and a plush Swiss hotel he owns with his wife.

Ex-Chiefs Burke and Segel are the latest in a lengthening line of corporate bosses who are leaving their jobs years before the traditional retirement age. The turnover rate among the heads of major corporations is 20% a year now, says Professor of Management Eugene Jennings of Michigan State University, and that is double what it was in the 1960s. Jennings' studies, dating back to 1948, indicate that more than half of those leaving are being forced out. Among the nation's 500 largest industrial firms, only 25% of the presidents have been in office for more than five years. In 1967 that figure was 35%. In 1962, reports the management consulting firm of Heidrick and Struggles Inc., it was 45%.

So many chief executives are being fired, says Professor Jennings, because it is becoming tougher and tougher to run a company. Marketing cycles change rapidly, rendering rules and procedures obsolete almost as soon as they are devised. Aggressive consumerism puts further pressures on top management. Moreover, the boom of the '60s produced a corps of executives who were hurriedly advanced through the ranks and were not properly seasoned. Corporate boards still are shaking out some of the losers who survived the 1969-71 recession.

Likewise, it is becoming easier and more fashionable for men to quit their top jobs. Old notions of company loyalty have given way to a new ethic, in which a man is expected to mind his own career and to take his breaks as they come.

Further, stock options, severance agreements and early-retirement plans make it possible to end one career in time to begin a new one in public service, teaching, or some other humane pursuit, and a growing number of executives are taking the opportunity. Some examples: Halsey Smith, 52, became president of the Casco Bank in Portland, Me., when he was 34 and was named chairman at 48. He quit last September, 20 years to the day after he joined the bank, and now heads a research and advanced studies center at the University of Maine. Henry Hall Wilson, 52, earned $115,000 a year as president of the Chicago Board of Trade for six years, during which its volume increased nearly 150%. Last July, he returned to his native North Carolina because "there are things in life which are more important than money"; he plans to run in the upcoming Democratic primary for the U.S. Senate seat to be vacated by Sam Ervin.

Such departures can be good for the organization as well as for the exiting executive, even if he is a highly competent man. Says Management Consultant Spencer Stuart: "After you've been at the head of a company for a few years, you have more or less established your own programs, and you begin to resist change. That's when a new man should come in." More and more firms, and their chief executives, are coming to believe in the wisdom of that advice.

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