July 2022 Challenger CEO Report
Published August 10, 2022
The number of CEO changes at U.S. companies plunged to 58 in July, down 45% from the 106 CEO exits recorded in June. It is lowest monthly total since April 2020, when the uncertainty and economic turmoil caused by the pandemic led to 48 CEO exits in that month, according to a report released Wednesday by global outplacement and business and executive coaching firm Challenger, Gray & Christmas, Inc.
“The economy is facing uncertainty right now, but it’s much more positive than in early 2020. Inflation fell in July, gas prices are falling steadily, the job market remains tight, and supply chain issues have mostly cleared up. Consumers lack confidence at the moment and interest rates are rising to battle inflation, which might slow business borrowing and some growth plans,” said Andrew Challenger, Senior Vice President of Challenger, Gray & Christmas, Inc.
So far this year, 832 CEOs have left their posts, the highest January-July total since 2019, when 850 CEOs left their posts in the first seven months of the year. It is up 8% from the 770 CEO exits announced through July last year.
Industries with the Most Leadership Change
Government/Non-Profit entities lead all industries in CEO turnover with 187 so far this year, with 13 in July. Technology companies announced 7 CEO exits last month and 87 for the year. Hospitals saw 9 CEO exits last month and 71 so far this year, up 20% from the 59 CEO exits announced in the same period last year.
“Health Care, and Hospitals specifically, are under a tremendous strain emerging from the pandemic. Staffing shortages have created concerns about care, and varying legislation on abortion will impact hospital systems differently depending on the states in which they have hospitals, an incredible challenge,” said Challenger.
Reasons Why CEOs Left
Fourteen CEOs retired in July for a total of 199. Another 12 CEOs stepped down into other high-level roles within the organization for a total of 211. These CEOs usually serve as the companies Chair or advisor to the new CEO. Fifty-eight CEOs have left for new opportunities this year, with 5 in July.
Women in the C-Suite
The rate of women taking over the incoming CEO role increased slightly to 27% from 26% in June, and up slightly from the 24% of incoming women who made up new CEOs through the same period in 2021.
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CEO Turnover Appears to be Stabilizing in Healthcare
Published August 10, 2022
The high rate of turnover for healthcare CEOs has seemingly slowed, according to the latest report on CEO exits from global outplacement and business and executive coaching firm Challenger, Gray & Christmas. “Healthcare, and hospitals specifically, are under a tremendous strain emerging from the pandemic,” said Challenger. “Staffing shortages have created concerns about care, and varying legislation on abortion will impact hospital systems differently depending on the states in which they have hospitals, an incredible challenge.”
A New Crop of CEOs Are Poised to Take Over Heritage Retail Brands as They Navigate An Industry in Flux
The changing of the guard While it might seem like a sudden recent exodus of retail CEOs, only 14 executives in the industry have left the top position in 2022 as of the end of July, according to a report from executive outplacement firm Challenger, Gray & Christmas. That’s one less compared to the same period in 2021. Across all industries, 832 CEOs have left the top job so far this year, which represents the highest January through July total since 2019, when 850 departed. Since 2020, two years of uncertainty discouraged CEOs from jumping ship amid a crisis, explained Challenger, Gray & Christmas SVP Andrew Challenger. Two years later, the situation has changed and CEOs are making moves.
“The world has gained some clarity,” he said. “Businesses have some idea of the direction that they’re going to take post-Covid. And I think there’s also some pent up retirements.” While it may not be a full-blown exodus, this changing of the guard coincides with broader shifts occurring in the industry, such as an emphasis on digital growth, diversity in leadership and a focus on a robust omnichannel strategy. This new crop of leaders could also present opportunities to increase the representation of women and people of color at the helm of a company.
There has been some progress in this realm thus far in 2022. Out of the 14 new retail CEOs to be appointed in 2022 so far, seven (or 50%) have been women, according to Challenger, Gray & Christmas. That’s up from the full year of 2021, when 26% of appointed retail CEOs were women, and significantly up from 2012, when only about 13% of new retail CEOs were women (or five out of 37). Across all industries, the rate of new female CEOs increased to 27% in July from 26% in June. When it comes to corporate boards, women held 27% of all board seats in 2021, up from 24% in 2020, according to a report from Women Business Collaborative. “It’s encouraging that we’re moving in the right direction,” Challenger said. “But obviously, only a quarter of new CEOs are women, and it’s still a long way to go.”
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Challenger, Gray & Christmas VP Colleen Madden Blumenfeld spoke with Neanda Salvaterra and Agenda Financial Week about the slow down of CEO departures, “… we are starting to see some things are turning a corner … There are more positive things happening. The supply chain problems have eased, but the labor market is still tight and at the same time gas prices are falling and inflation seems to be falling.”
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