2019 October CEO Report: Another High in a Record-Setting Year
Churn in the C-Suite surged in October to a new high in a record-setting year, as 172 chief executives left their posts during the month, 14% more than the 151 CEOs who left in September, according to a report released Wednesday by global outplacement and business and executive coaching firm Challenger, Gray & Christmas, Inc.
Last month’s total was 15% higher than the 149 CEO exits announced in the same month last year. September marks the ninth time this year that CEO changes were higher than the corresponding month one year earlier.
So far this year, 1,332 CEOs have left their posts, according to Challenger tracking, 13% higher than the 1,176 CEOs who had announced their exits through October 2018. It is the highest January-October total since the firm began tracking in 2002.
“October was marked by a number of high-profile CEO exits, with many being held accountable for various missteps, whether in their professional handling of the company or in their personal lives,” said Andrew Challenger, Vice President of Challenger, Gray & Christmas, Inc.
In fact, six CEOs left after allegations of professional misconduct, which include actions taken in the workplace that result in investigations or findings of wrongdoing.
“That said, we’ve seen the majority of CEOs leaving amid normal succession plans. Meanwhile, after a decade of expansion, companies that started ten years ago are finding themselves in a phase where new leadership is needed. Other companies are adapting to changing technologies or finding new leadership based on current economic conditions and forecasts for the coming year,” said Challenger.
Challenger tracks CEO changes at companies that have been in business for at least two years, with a minimum of ten employees.
The number of chief executive changes is higher than at any point on record. At this point during the Great Recession in 2008, the second-highest year for CEO turnover, 1,257 chief executives had announced exits, 6% lower than the current year-to-date total.
The majority (35) of chief executives left companies in the Government/Non-Profit sector last month. These companies include government agencies, Chambers of Commerce, education companies, charities, and foundations. This sector leads all sectors in CEO exits with 281, up 25% from the 225 who left their posts through October last year.
“Government firms are, in some cases, grappling with new legislation or political changes that influence leadership. Similarly with non-profits, CEOs often need to work with government officials for funding and priorities may have changed. Still more CEOs at these organizations are stepping down into other roles, typically to fundraise, and new leadership is being appointed,” said Challenger.
The Technology sector announced the second-highest number of CEO changes this year with 181, 188 when including CEO exits from the Telecommunications and Electronics industries. That is up 24% from the 152 CEOs who left their posts in those three industries through October last year.
Financial companies have announced the third-highest number of CEO changes with 104, 13 of which occurred in October. That is down 12% from the 118 Financial sector CEOs who left through October of last year.
Pharmaceutical companies have announced 55 CEO changes this year, up 45% from the 38 who left through October 2018.
Industrial Goods Manufacturers, Food Production companies, and Energy firms have all seen an increase in leadership changes. So far this year, 54 chief executives left Food companies, 69% higher than the 32 who left through this point last year. Fifty-two CEOs have left Industrial Manufacturing companies, up 68% from 31 last year, while 48 Energy sector CEOs left their posts this year, up 109% from the 23 who left their posts last year.
Health Care/Products companies and manufacturers have announced 98 CEO exits, down 10% from the 109 who announced their departures through October last year. Hospitals have also seen a drop in leadership changes. Hospitals have announced 95 CEO changes this year, down 17% from the 115 announced in the first ten months of 2018.
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