Art auction houses face upheaval.

Major art houses have seen an exodus of top talent.

In the latest announcement, maverick executive Loic Gouzer left Christie’s. Gouzer said he plans to concentrate on, “conservation and climate issues before coming back to the art world with a new project.”

His departure is the third in recent months. Francis Outred, Christie’s head of postwar and contemporary art in Europe is also leaving. At Sotheby’s, COO Adam Chinn is departing and his position is being eliminated.

According to the New York Times, the departures come at a time of upheaval for the big art auction houses. The newspaper reports:

Christie’s and Sotheby’s, as well as their would-be rival Phillips, frequently find themselves competing to offer the most generous possible terms to finance-savvy owners of multimillion dollar artworks.

Sellers at this level are not charged commission, leaving the auction houses to tempt them with higher valuations and bigger percentages of the fees they charge buyers. Increasingly these complex arrangements are pegged to a minimum price guarantee, with the guarantor earning a share of the profit if the work sells above that figure. It is a risky business, and auction houses like to pass on that risk to a third party, who guarantees the sale with a so-called “irrevocable bid” at the auction.

This leaves auction houses making meaningful returns on high-value lots only when they sell significantly over estimate. But demand at the very top end of the market has cooled. The two highest-selling auction lots of the year — a $157.2 million Modigliani nude at Sotheby’s and a $115 million Picasso at Christie’s — both failed to surpass expectations, selling to single bids from their third-party backers and so yielding no upside to the auction house. Competition for the best available works has pushed up the value of guarantees, but this often discourages competitive bidding at the auction itself.