October CEO Turnover Falls 23% in Month Before Election
In a tumultuous economic year with uncertainty dictating most business decisions, CEO turnover remains below 2019’s record level. Last month, the nation’s companies announced 92 CEO changes, down 23% from the 119 announced in September, according to a report released Wednesday by global outplacement and business and executive coaching firm Challenger, Gray & Christmas, Inc.
October’s total was 47% lower than the 172 CEO exits reported in the same month last year. For the year, 1,108 chief executives have left their roles, down 16.8% from the 1,332 CEOs who announced their departures in the first ten months of last year.
"Undoubtedly companies were waiting for the outcome of the presidential election to inform not just business strategy, but also leadership decisions,” said Andrew Challenger, Senior Vice President of Challenger, Gray & Christmas, Inc.
October’s total is the lowest since June, when 91 CEO changes were recorded. It is the seventh time this year CEO changes were lower than in the corresponding month one year earlier.
Government/Non-Profit firms announced the highest number of changes last month, with 17, bringing the year-to-date total to 202, a 28.1% decrease from the 281 CEOs who left their positions in this sector during the same period last year. This sector includes charities, foundations, and government-run entities, such as transportation authorities, chambers of commerce, and public education institutions.
Hospitals saw the second-highest number of CEO changes in October with 11, for a total of 90 so far this year. This is a 5.3% decrease from the 95 exits announced in this sector through October last year. Hospitals have been plagued by furloughs, job cuts, and other cost-cutting measures due to revenue losses in the face of COVID-19.
Entertainment/Leisure companies, also hit hard due to the COVID pandemic, announced the third-highest number of CEO changes in October with nine. This industry has announced 70 CEO changes so far this year, 37% higher than the 51 announced through October 2019.
Of those who gave a reason for leaving their position this year, the majority of CEOs (291) stepped down, meaning they stayed with the company for a period of time after leaving the position. Another 249 announced retirements and 114 saw their interim periods end. Some companies provided more specifics: 15 left due to a scandal (usually something that resulted in legal proceedings, such as financial mismanagement or fraud), four left due to allegations of racism or racism-related issues, four left amid allegations of professional misconduct, and one left amid allegations of sexual misconduct.
For the first time this year, the rate of new CEOs who are women dipped below 23%, as 22.8% of new CEOs are women through October this year. This is higher than the rate of new women CEOs in 2019, when 21.7% were women.
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Download the full report with data tables below.