Published December 20, 2024
The number of CEO changes at U.S. companies fell 2.9% in November to 167 from 172 in October. It is down 7.2% from 180 CEO exits recorded in the same month last year, according to a report released Thursday by global outplacement and business and executive coaching firm Challenger, Gray & Christmas, Inc.
Challenger, Gray & Christmas, Inc. ©
So far this year, 1,991 CEOs have announced their departures, the highest total on record, since Challenger began tracking CEO changes in 2002. It has surpassed the previous record of 1,914 CEO exits that occurred in all of 2023. It is up 16% from the 1,710 exits that occurred during the same period last year.
Women CEOs
The rate of new CEOs who are women fell 0.1 percentage points to 27.7% in November. It is down slightly from the 28.0% of incoming CEOs who were women during the same period last year.
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. Through November, 15% of women CEOs are not permanent replacements, compared to 12% of male CEOs. Last year, both men and women were named to interim roles 7% of the time.
Challenger, Gray & Christmas, Inc. ©
Interim Leaders
That said, companies are appointing leaders on an interim basis more often in 2024 than last year. This year, 13% of all replacements are named on an interim basis, compared to 7% of all incoming CEOs in 2023.
“The current landscape has a lot of uncertainty baked in, and companies are responding by putting temporary leaders in place. This can act as a trial run to see how the leader navigates current challenges.
“It’s much less disruptive to replace an interim head if things do not appear to be working out, not only the company and its employees, but also to analysts and shareholders,” said Andrew Challenger, workplace expert and Senior Vice President for Challenger, Gray & Christmas, Inc.
What Industries Are Seeing Turnover?
Companies in the Government/Non-Profit sector lead in CEO transitions with 438 exits year-to-date, up from 425 last year. This sector also saw 34 CEO transitions in November 2024 alone.
The Health Care/Products industry follows with 230 CEO exits so far this year, a significant increase from 165 in 2023. The Hospitals sector, however, reported 101 CEO exits year-to-date, down from 136 last year.
The Technology sector recorded 208 CEO transitions year-to-date, a notable rise from 153 in 2023. In November 2024, there were 16 CEO transitions, compared to 18 in October.
The Entertainment/Leisure industry reported a sharp increase with 139 CEO exits this year, up from 86 in 2023. This sector saw 19 transitions in November 2024, the highest for any industry this month.
The Financial sector reported 104 CEO transitions year-to-date, slightly down from 108 in 2023, while Services recorded 102 exits, down from 111 last year.
The Energy sector continues to see exits with 43 year-to-date, up from 33 in 2023, while Industrial Goods saw a jump to 41 CEO transitions from 23 last year.
In the Real Estate sector, 47 CEO exits were reported year-to-date, more than double the 20 recorded in 2023. Meanwhile, the Pharmaceutical industry saw 54 transitions year-to-date, an increase from 44 in 2023.
OTHER NOTABLE INDUSTRIES INCLUDE:
- Automotive: 24 CEO exits year-to-date, up from 15.
- Construction: 32 transitions, up from 22 last year.
- Retail: 37 CEO exits, down from 50 in 2023.
Where in the U.S. Are CEO Exits Happening?
Companies in the West region lead in total CEO transitions with 668, with California leading all states in exits with 223, up from 213 last year. Texas followed with 133 CEO exits, up from 121. Washington state has seen 73 CEO exits, a significant increase from 43 last year.
Companies in the South reported 452 CEO exits, with Florida leading at 118. Florida reported 114 CEO transitions during the same period last year. Virginia saw 60 exits, up from 40 in 2023, while Tennessee reported 55, up from 46.
The East region, led by New York (138) and Massachusetts (93, up from 71 in 2023), recorded 474 CEO exits. Pennsylvania followed with 81 CEO transitions.
The Midwest saw a total of 397 CEO exits, led by Ohio (84) and Illinois (67). Michigan followed with 48 CEO exits, a notable rise from 34 last year.
Reasons for Exits
The leading reason for CEO transitions year-to-date is “Stepped Down,” with 551 exits, including 45 in November. “No Reason Given” follows closely with 496 CEO exits this year, 26 of which occurred in November.
Retirement is the third most common reason for CEO departures, accounting for 445 exits this year, with 40 occurring in November. New Opportunity was cited 148 times, with 25 exits in November.
Resignations were reported 124 times this year, including 17 in November. Additionally, 95 CEOs departed after their “Interim Period Over” this year, with 7 in November.
LESS FREQUENT BUT SIGNIFICANT REASONS INCLUDE:
- Allegations of Professional Misconduct: 7 departures
- Differences With Board: 6 transitions, with 1 in November
- Terminated: 5 CEO exits
- Allegations of Sexual Misconduct: 3 transitions, with 1 in November
- Loss of Contract: 3 departures, including 1 in November
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Contact Colleen Madden Blumenfeld for more data or to set up an interview with SVP Andy Challenger.
