CEO Changes Continue Upward Trajectory, May Exits Up 52% From Same Month Last Year

Published June 15, 2022

The number of CEO changes at U.S. companies rose 22% to 150 in May from 123 in April. It is 52% higher than the 99 CEO changes announced in the same month in 2021, according to a report released Wednesday by global outplacement and business and executive coaching firm Challenger, Gray & Christmas, Inc.

So far this year, 668 CEOs have left their posts, the highest January-May total since the firm began tracking monthly CEO changes in 2002. It is up 24% from the 539 CEO exits announced through May last year, and up 6% from the previous high of 627 exits announced in the first five months of 2019.

“The CEO exodus continues. Economic conditions, rising inflation, and recession concerns are making boards rethink leadership and leaders rethink if they want to take on these challenges,” said Andrew Challenger, Senior Vice President of Challenger, Gray & Christmas, Inc.

CEO departure by month; 2021 vs 2022; May 2022 Challenger Report

Source: Challenger, Gray & Christmas, Inc. ©

Industries with the Most Leadership Change

Government/Non-Profit entities lead all industries in CEO turnover with 154 so far this year, followed by Technology companies with 63. Technology firms saw 16 exits last month, the fourth-highest industry in May.  Last month, Technology companies announced the most job cuts since December 2020, according to Challenger’s monthly Job Cuts Report.

“The ready capital that was available to Tech companies the last few years is starting to slow, and job cuts are following. Generally, new leaders are brought in during a period of uncertainty. Former leaders often remain with the company for a period of time, either as a consultant or continue as a Board Member or Chair to maintain institutional knowledge and have the appearance of a seamless transition,” said Challenger.

Reasons Why

Thirty-three CEOs retired last month for a total of 155 so far this year, while 183 CEOs stepped into other high-level roles within the company, usually as a Chair or advisor to the CEO, this year. Another 39 CEOs left for new opportunities, with 11 in May.

CEO departure by reason; 2021 vs YTD 2022; May 2022 Challenger Report

Source: Challenger, Gray & Christmas, Inc. ©

Female Leaders

The rate of women taking over the incoming CEO role remained unchanged at 26% so far in 2022, up slightly from the 24% of incoming women who made up new CEOs through the same period in 2021.

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Challenger's Media Coverage

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Meanwhile, in the first five months of 2022, global outplacement firm Challenger Gray & Christmas found that 668 US-based CEOs have left their positions, making it the highest January-through-May total recorded since the firm began tracking monthly CEO changes in 2002. “The CEO exodus continues. Economic conditions, rising inflation, and recession concerns are making boards rethink leadership and leaders rethink if they want to take on these challenges,” said Andrew Challenger, the company’s senior vice president. … Another major stressor for middle managers: Many are relatively new, hired after a wave of more tenured managers decided to retire early during the pandemic, Challenger said. “They’re learning to be a manager to teams that are remote. And there’s not a lot of wisdom or experience they can get from [more tenured managers]. That is exhausting,” he noted. … There is also more pressure on managers to hold teams together when employees have more power than ever and quit rates have been at record highs. And the latest five-month layoff rate was the lowest recorded since Challenger started tracking it in 1993. “Companies have been hanging onto people and are loathe to let them go in this environment,” Challenger said. He anticipates the hot labor market may start to cool a bit by the end of this year, amid concerns about the economy. But that cooling may just temper the quit rate, not cause it to plunge. And it may increase layoffs, but not hugely. Should both those levers move as Challenger predicts, that may settle at least one of the exhausting ambiguities managers and executives have had to contend with lately: How many days people will work in the office versus remote. To date there’s been a big disconnect between what employers want and what their employees want. “Employers going for hybrid may think four days a week and employees think it should be zero,” Challenger said. “As the labor market cools, we’ll get closer to a new post-Covid equilibrium.”

 


 

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