Last month’s total is virtually unchanged from the 147 CEO exits recorded in the same month last year. So far this year, 1,480 CEOs have left their posts, according to Challenger tracking, 12% higher than the 1,323 CEOs who announced their exits through November 2018. It is the highest January-November total since the firm began tracking in 2002, and only four CEOs fewer than the previous full-year high of 1,484 CEO exits tracked in 2008.
“Several factors are contributing to the high rate of CEO turnover. One is a strong economy and high demand for C-level skills are attracting CEOs to new positions. Another is the ongoing uncertainty surrounding trade and regulations while emerging technologies continue to disrupt almost every industry,” said Andrew Challenger, Vice President of Challenger, Gray & Christmas, Inc.
“We are also tracking companies that are demanding accountability in their CEOs’ professional and personal lives. Any behavior unbecoming to a company’s brand is pretty quickly followed by a resignation announcement,” he added.
NEW: Indeed companies appear eager for new blood. For the replacements for which we have data, 718 are external this year and 545 are internal. This year is the first time external replacements have surpassed internal since 2013.
Challenger tracks CEO changes at companies that have been in business for at least two years, with a minimum of ten employees.
The Government/Non-Profit sector leads all industries in CEO turnover with 310. That is 20% more than the 258 chief executives who left their positions through November last year. These companies include government agencies, Chambers of Commerce, education companies, charities, and foundations.
The Technology sector follows with 200 CEO changes, up 45% from the 138 announced through this point last year. Financial companies have announced the third-highest number of CEO changes with 112, down 17% from the 135 Financial sector CEOs who left through November of last year.
Hospitals have announced 105 CEO changes this year, down 18.1% from the 124 who left their posts through the same period last year.
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.
Four chief executives left their posts amid allegations of professional misconduct, including two who reportedly had inappropriate consensual relationships, bringing the year-to-date total to 14. Investigations into financial wrongdoing, ethical violations, or behavior that goes against company policies also fall into this category.
Companies appear to be keeping their institutional knowledge intact, at least for a limited amount of time. The majority of CEOs (527) stepped down into other roles within their companies, typically to assist in the transition as a consultant, into another C-level position, or into a Board Member or Chairperson role.
Another 355 retired, while 138 found new positions in other companies. An additional 127 CEOs Resigned, while 109 left with no official reason given. Thirty-six CEOs left amid a merger or acquisition, and 22 were terminated, meaning the Board terminated their employment.
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Contact Colleen Madden Blumenfeld for more data or to set up an interview with SVP Andy Challenger.
See last month’s report
Highlight: 2019 looks to be a record year for CEO departures. “We have new companies that have outgrown their founder CEOs… we have legacy organizations that are fighting… new competitors,” says @ChallengerGray’s Andrew Challenger. More: pic.twitter.com/JtewATG7L9
— Yahoo Finance (@YahooFinance) December 11, 2019
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— ChallengerGray (@ChallengerGray) December 11, 2019