Chief Executive Officer turnover fell for the second month in a row to 94, down 27% from the 128 who left their posts in February. It is the lowest monthly total in 20 months, according to a report released Wednesday by global outplacement and business and executive coaching firm Challenger, Gray & Christmas, Inc.
March’s total is 30% lower than the same month last year, when 135 CEO exits were recorded. In the first quarter of 2020, 441 chief executives left their posts, 6% higher than the 416 who left in the same period last year and 8% lower than the previous quarter, when 480 CEOs left their posts, the highest quarterly total on record. It is the highest Q1 total since the firm began tracking in 2002.
“The COVID-19 outbreak has put the brakes on the economy in many ways. As millions file for unemployment, companies grapple with conducting permanent layoffs or furloughs and some are considering shutting down operations temporarily or even closing entirely,” said Andrew Challenger, Vice President of Challenger, Gray & Christmas, Inc.
“The $2 trillion stimulus package currently being distributed includes help for small and mid-size businesses, and many companies are still in wait-and-see mode before implementing drastic changes. In fact, we have seen some CEOs postpone resignations and retirements during this period,” he added.
Using SEC filings, news reports, and company announcements, Challenger tracks CEO changes each month from U.S.-based companies that have been in business for at least two years and employ a minimum of ten employees. So far this year, Challenger has tracked CEO exits from 16 Fortune 1000 companies.
March’s total was led by Hospitals, which saw 13 chief executive exits, for a total of 43 this year. That is 105% higher than the 21 CEOs who left their posts in this sector during the same period last year.
“CEOs of Hospitals and Hospital systems are truly being tested right now. Many are losing money due to the need to cancel elective procedures that typically propel these entities into the black at a time when cost-cutting would only hurt communities, patients, and health professionals,” said Challenger.
The Government/Non-Profit and Entertainment/Leisure sectors both announced nine chief executive departures last month. Government/Non-Profit leads all sectors in CEO turnover this year with 72, 24% lower than the 95 recorded in Q1 2019.
Companies in Entertainment/Leisure have been hit the hardest by the COVID-19 outbreak thus far. According to Challenger tracking, of the 141,844 job cuts announced due to COVID-19, 83,234 were at companies in this sector. This sector has seen 28 CEO exits this year, up 87% from the 15 who left their posts in the first quarter of 2019.
The Technology sector followed with seven exits in March, for a year-to-date total of 58, 71% higher than the 34 who left their posts in the first quarter last year.
The majority of CEOs (105) stepped down into other roles in their company this year, either permanently as a Board Member or other C-Suite-level position or in an advisory role. Another 96 retired, while 67 resigned.
Of the 392 replacements Challenger tracked this year, 209 came from outside the company, while 183 were internal candidates. So far this year, 24% of replacement CEOs are women.
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