Published March 29, 2024
The number of CEO changes at U.S. companies surged to 248 in February, up 28% from the 194 CEO exits recorded in January. It is a 49% increase from the 167 CEO exits that occurred in the same month one year prior, according to a report released Thursday by global outplacement and business and executive coaching firm Challenger, Gray & Christmas, Inc.
February’s total is the highest monthly total on record. The previous record was set in January 2020, when 219 CEOs left their posts.
Challenger, Gray & Christmas, Inc. ©
A confluence of factors is leading to a surge in leadership changes, including technological advancements, focus on cost-cutting, redeployment of company resources, additional scrutiny on CEO behavior and decision-making, and CEOs deciding to end their tenures after a tumultuous four years.
In fact, interim leaders stayed longer in their positions between 2020 and 2023. In an analysis of tenure data by Challenger, average tenure for interim CEOs between 2010 and 2018 was 10.1 months. Between 2019 and 2023, it spiked to 2.2 years, with interim leaders staying in their positions on average for 3.2 years in 2023.
“This suggests CEOs who took the position temporarily in 2019 extended their tenures due to the pandemic, and are deciding to leave their posts now,” said Andrew Challenger, Senior Vice President of Challenger, Gray & Christmas, Inc.
Women CEOs
The rate of new CEOs who are women appears to be falling. In February, 27.2% of new CEOs were women, down from 29% in January. It is virtually the same as the 26.9% of new women CEOs in the same period last year but trending lower than 28% of new CEOs who were women to end 2023.
“This is likely due, in part, to reports of companies ending or significantly reducing their diversity, equity, inclusion, and belonging efforts which saw an increase in women enter companies’ leadership pipelines. We also know the return-to-office trend is impactful on mothers who were finding balance in their professional development and home lives in remote roles,” said Challenger.
Companies must look at how they systematically support women in leadership and C-level roles.
“As we see the pendulum swing back to a looser labor market, the employer offerings to attract talent in difficult times are beginning to fade and could negatively impact culture and ultimately, talent acquisition and management,” he added.
Where are CEO Exits Happening?
Government/Non-Profit led last month with 56 CEO exits, 43 of which occurred at Non-Profits, for a total of 104. This is a 79% increase from the 58 CEO exits in this sector during the same period last year. It is up 17% from the 48 CEO exits in this sector one month prior.
Technology follows with 31 CEO exits last month, up 48% from the 21 announced in January. It is up 107% from the 15 announced in the same month last year. So far this year, this industry has announced 52 CEO exits, up 63% from the 32 announced in the first two months of 2023.
Healthcare/Products announced 18 CEO changes in February, for a total of 40 exits so far in 2024. That is a 208% increase from the 13 exits announced through February 2023.
Hospitals announced 15 CEO changes in February for a total of 26, a 37% decrease from the 41 exits announced at Hospitals during the same period last year.
Reasons for Exits
Companies most often are not disclosing reasons for their CEOs’ departures last, with 161 cases (36% of all CEO exits).
Another 95 CEOs have retired this year, accounting for 21% of all exits, compared to 24% of CEOs who retired in the same period last year.
Sixty-nine CEOs “stepped down” into other C-level, advisory, or Board roles making up 16% of all exits. Another 24 CEOs saw their interim periods end, up 140% from the 10 CEOs who left for this reason during the same period last year.
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SVP Andy Challenger is available for interviews on the job market, economy, and job search process. Please contact Colleen Madden Blumenfeld for more information.
