The results reveal a growing haste to remove chief executives who fail to deliver strong results in the first few years of their tenure. "Business has entered the era of the short-term chief executive," said Charles Lucier, senior vice president emeritus of Booz Allen Hamilton. "The age of the ephemeral CEO is here."

In fact, CEO turnover now matches the normal attrition rate for all employees. According to quarterly surveys by the research publisher BNA Inc., the typical employee turnover rate in the U.S. is about 12 percent per year, excluding layoffs and temporary employees. At 11.7 percent, the total rate of U.S. CEO departures in 2004 is equivalent to the overall rate of U.S. employee turnover.

"From the perspective of turnover, the CEO is just another employee," Lucier said.

But the study also found that boards of directors in North America are the slowest to remove underperforming CEOs, while boards in Europe are the quickest. Overall, underperforming CEOs were removed after an average of 4.5 years in 2004. In Europe, CEOs removed for poor performance were in office for an astonishingly brief 2.5 years. Boards in North America were the slowest to remove underperforming CEOs, at 5.2 years.

In addition, the study reveals an unintended consequence of shareholder activism: an even greater likelihood that executives will focus on delivering short-term results at the expense of strategies that create long-term shareholder value.

"CEOs need an agenda that puts the company on the right strategic path, but that also produces short-term wins that don't hurt the company in the long run," noted Booz Allen senior vice president Reggie Van Lee.

The firm's study, "CEO Succession 2004: The World's Most Prominent Temp Workers," is being published in the Summer 2005 issue of strategy+business, Booz Allen's quarterly thought leadership magazine, which goes on sale on newsstands in June.

Other findings:

• The Sarbanes-Oxley Act (SOX) of 2002 did not force more CEO turnover in the U.S. The upward shift in CEO firings occurred from 1995 to 2000; subsequent rates of overall turnover, dismissals, and tenure are all consistent with pre-SOX trends.
  
  
• New chief executives hired from the outside inherit companies in much worse shape than those inherited by insiders. For the CEO "class" of 2004, outsider CEOs joined companies whose shareholder returns averaged 5.2 percentage points lower during the preceding year than companies that promoted insiders.
  
  
• CEOs are retiring at ever-younger ages. An increasing proportion of successful chief executives age 55 or younger are choosing to retire. In North America, 17.5 percent of CEOs who stepped down as part of a planned transition in 2004 were 55 or younger, an increase of 61 percent over the prior year.
  
  
• Europe and Asia (excluding Japan) have become the most demanding environments for CEOs. These regions have the highest overall turnover, the most firings, the shortest tenures, and the most rapidly increasing rates of turnover. Europe's turnover rate of 16.8 percent is 425 percent higher than 1995, the first year Booz Allen tracked CEO successions. The Asia turnover rate of 17.5 percent (excluding Japan) is 256 percent higher than 1995 levels.
  
  
• A former CEO who stays as chairman creates a drag on performance. Companies in which a retired chief executive stayed on as chairman (46 percent of companies) underperformed other firms by a regionally-adjusted 2.8 percentage points annually.
  
  
• Successful companies are more likely to fire a new CEO. Contrary to conventional wisdom, companies that performed well during the two years prior to their CEO's appointment have been one-third more likely to force that new CEO from office. Companies that struggled before their new CEOs came in were more likely to keep them longer.

Booz Allen studied the 354 CEOs of the world's largest 2,500 publicly traded corporations who left office in 2004, and evaluated both the performance of their companies and the events surrounding their departures. To provide historical context, Booz Allen evaluated and the compared this data to information on CEO departures for 1995, 1998, 2000, 2001, 2002 and 2003.