2022 CEO TURNOVER REPORT: CEO Changes Fall to Lowest Level Since 2017
Published January 19, 2023
The number of CEO changes at U.S. companies rose 5% from the 95 in November to 100 in December. December’s total is down 6% from the 106 CEOs who left their posts 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.
In 2022, companies announced 1,235 CEO exits, down 8% from the 1,337 CEOs who left their posts in 2021. It is the lowest annual total since 2017, when 1,160 CEO exits were announced.
“Companies appear to be holding steady with their leadership after years of leadership changes and unprecedented uncertainty,” said Andrew Challenger, leadership expert and Senior Vice President of Challenger, Gray & Christmas, Inc.
WHERE ARE CEO EXITS HAPPENING?
The Government/Non-Profit sector led all industries in CEO turnover with 271, while the Technology sector announced 137 CEO changes. Companies in the Health Care and Health Care Products industry announced 111 CEO exits, and Hospitals have announced 103 CEO changes.
“The pandemic changed how many Hospitals and Health Care companies operated. The industry was plagued by staffing issues and burnout at all levels,” said Challenger.
The Fintech industry has seen 25 CEO exits through December, a 108% increase from the 12 CEOs who left their posts in these companies one year prior.
CEOs have exited 199 public entities this year, slightly more than the 195 public entities that announced CEO changes in 2021.
REASONS FOR EXITS
Most CEOs (308) retired in 2022, while another 272 CEOs stepped down into other positions in the company, usually in a Board or other C-level role.
Fewer CEOs left due to misconduct allegations in 2022 compared to the year prior. In 2021, 7 CEOs left their post due to sexual harassment, professional misconduct, or racism allegations, compared with two who left for these reasons last year.
Another 288 CEOs and companies did not give reasons for their departures, significantly higher than the 155 who did not do so in 2021.
“The number of CEOs who left without giving reasons could indicate how quickly things changed in 2022. The first half of the year saw the highest number of CEOs leaving on record with 774. Then, leadership changes began to slow. This could be because pandemic concerns eased, as did some staffing concerns. Though a downturn was imminent, companies seemed to have their leaders set as we ended 2022,” said Challenger.
Just over a quarter (26.2%) of new CEOs are women, similar, but slightly below the 26.8% of new CEOs who were women in 2021. It is up from 23% in 2020, and 22% in 2019.
At the same time, a higher rate of women left the CEO role in 2022 than in previous years. Nearly 20% of CEOs who left their posts were women in both 2022 and 2021. This is up from 16% in 2019, and the highest rate of women CEO exits since Challenger began tracking gender in 2010.
“On one hand, a higher rate of women leaving the CEO role means there are more women in that pipeline. However, the events of the last three years have taken a toll on women in leadership positions, as the pandemic uncovered inequities in pay, opportunities, and support of these leaders. This may have pushed many of them out of their leadership roles,” said Challenger.
“Companies would be wise to invest in their women talent to address these inequities. Studies have well shown the importance of diverse leadership on recruitment and retention of talent, as well as profitability,” he added.
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Contact Colleen Madden Blumenfeld for more data or to set up an interview with SVP Andy Challenger.
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