Published November 26, 2024
The number of CEO changes at U.S. companies fell 15% in October to 172 from 202 in September. It is up 64% from 105 CEO exits recorded in the same month last year, according to a report released Tuesday by global outplacement and business and executive coaching firm Challenger, Gray & Christmas, Inc.
Source: Challenger, Gray & Christmas, Inc.
So far this year, 1,824 CEOs have announced their departures, the highest year-to-date total on record, since Challenger began tracking CEO changes in 2002. It is up 19% from 1,530 exits that occurred during the same period last year, which was the previous year-to-date record.
“October saw an exodus of experienced CEOs as companies prepare for changes to the political, economic, technological, and regulatory landscape,” said Andrew Challenger, Senior Vice President of Challenger, Gray & Christmas, Inc.
Indeed, the average age of exiting CEOs in October was 64, the highest since August 2021, when the average age was 67. Meanwhile, the average tenure of exiting CEOs last month was 12.2 years, the highest since October 2020 when CEOs averaged the same tenure.
Source: Challenger, Gray & Christmas, Inc.
Women CEOs
The rate of new CEOs who are women rose 0.5 percentage points to 27.8% in October. It is down slightly from the 28.7% of incoming CEOs who were women during the same period last year.
The stagnation may be linked to the higher proportion of women being placed in interim roles, which are often less secure and may not transition to permanent leadership.
Indeed, women who have ascended to the CEO role are more likely to be named on an interim basis than their male counterparts this year, which was not the case in 2023. So far this year, 14% of women CEOs are not permanent replacements, compared to 11% of male CEOs. Last year, both men and women were named to interim roles 7% of the time.
“Women continue to face barriers in achieving permanent leadership roles. Organizations need to focus on equitable opportunities for long-term leadership success or risk hits to their employer brand, ability to recruit and retain talent, and ultimately, the bottom line,” said Challenger.
What Industries Are Seeing Turnover?
Government/Non-Profits led all industries last month with 48 exits, 44 of which occurred in Non-Profits. For the year, 404 CEOs have left Government/Non-Profit entities, up from 378 who left these posts through October 2023.
Healthcare/Products companies, which include medical supply and other device manufacturers, but excludes Hospitals, saw 26 CEO exits, down from 34 one month prior. Through October, Healthcare companies saw 212 CEO exits, up 55% from the 137 CEO exits recorded during the same period last year.
Technology announced 18 CEO exits last month, slightly down from 21 one month prior. So far this year, the sector has seen 192 leadership exits, an increase of 32% from the 146 exits recorded through October 2023.
Where in the U.S. Are CEO Exits Happening?
Companies in the West region lead in total CEO transitions with 609, with California leading all states in exits with 203, up from 193 last year. Washington state has seen 69 CEO exits, up from 41 last year.
Companies in the South have reported 409 CEO exits, with 111 from Florida. Florida reported 99 CEO transitions during the same period last year. The East, led by New York (134) and Massachusetts (89, up from 66 in 2023) saw 436 exits.
The Midwest, led by Ohio (78) and Illinois (65), saw 370 CEO exits.
Reasons for Exits
This year, 506 CEOs stepped down into other C-level, advisory, or Board roles. Another 470 CEOs left companies without giving a reason, while 405 CEOs retired from their companies. Eighty-eight saw their interim periods end.
Twenty CEOs left due to mergers and acquisitions and another 20 left due to corporate restructurings. Seven CEOs left due to allegations of professional misconduct.
Source: Challenger, Gray & Christmas, Inc.
Contact Colleen Madden Blumenfeld for more data or to set up an interview with SVP Andy Challenger.
