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Management Buzz 04/02

Firing your CEO and the latest ADA Supreme Court ruling

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This story appears in the April 2002 issue of Entrepreneur. Subscribe »

Head Case

CEO turnover surged in 2001, with 929 CEOs leaving their posts, according to outplacement firm Challenger, Gray & Christmas. Firing CEOs is almost trendy these days as a way for companies to show investors and clients that they're intent on making a turnaround. If you think it's time to show your chief executive the door, ask yourself these questions: Is this CEO the right leader for your company at this time and in this economy? Is the company's performance the CEO's fault, or is it the result of bad direction or information from you? Does the CEO recognize the problem, and does he or she have a credible plan for changing it? If not, and "if you're under-performing your competitors for four quarters in a row, the CEO needs to go," says Gary Sutton, author of The Six Month Fix: Adventures in Rescuing Failing Companies (John Wiley & Sons). "When earnings are down, you can almost automatically assume it's the CEO unless you see competitors in the same boat."

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