The CEOs of poorly performing companies were 40% more likely to be replaced last year than in 2015, according to the 2017 edition of CEO Succession Practices, a report released by The Conference Board. They were also 60% more likely to be replaced than the CEOs of better-performing companies.

Poorly performing companies — those with an industry-adjusted two-year total shareholder return in the bottom quartile of the S&P 500 sample — had a record-high CEO succession rate of 17.1%, up sharply from 12.2% in 2015 and the highest rate of turnover seen for this group of companies since 2002 and higher than the 2001 to 2016 average of 13.9%.

“A major driver of this surge in 2016 is the exceptional number of CEO dismissals in the wholesale and retail trade sector,” said Matteo Tonello, managing director of corporate leadership at The Conference Board and a co-author of the report. “The sector has been battered by a stronger dollar, weakness in emerging markets and relentless pressure from online one-stop-shop competitors such as Amazon. These factors contributed to widely reported store closures and job losses in recent years.”

In this business sector, CEO dismissals accounted for 50% of the total succession tally for 2016, compared to 14.3% percent in the prior year.

Oil and gas extraction companies also experienced a spike in dismissals, with 75% of CEO succession cases in 2016 classified by The Conference Board as disciplinary, compared to 25% in the prior year.

The report also found companies continue to increase transparency around CEO succession planning. Today's boards are more inclined to provide earlier notice of the CEO succession event, describe the role performed by the board of directors in the CEO succession process, and shed light on the reasons for the transition. In 2016, boards were 30% less likely than in 2015 to announce that the CEO succession was effective immediately.

“Boards continue to enhance transparency around CEO succession events, issuing disclosures that provide shareholders with more advance notice about a pending succession, and offer greater details regarding the reasons underlying the need for a CEO change,” Tonello said.