Published January 18, 2024
The number of CEO changes at U.S. companies jumped 13% from 180 November CEO exits to 204 in December. This marks a 104% increase from the 100 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.
December’s total is the highest monthly total since 224 CEOs left their posts in May. In 2023, 1,914 CEOs left their posts, a 55% increase from the 1,235 CEO changes in 2022. Last year’s total is the highest on record, surpassing the previous record of 1,640 CEO exits in 2019. The firm began tracking CEO exits in 2002.
“Historically, we’ve seen large economic shifts preceded by a surge in CEO exits,,” said Andrew Challenger, workplace expert and Senior Vice President of Challenger, Gray & Christmas, Inc. Meanwhile, CEOs are leaving their posts younger than ever in Challenger’s tracking. The average age of an exiting CEO was 56 in 2023, down from over 63 in 2017.
Source: Challenger, Gray & Christmas, Inc. ©
“Companies must consider the implications of younger C-level leaders to their future success. How do they get diverse talent – diverse in age, ethnicity, and ability – into their pipelines? How do they ensure those future leadership teams are successful? These is absolutely the questions companies are asking themselves in 2024,” said Challenger.
Women CEO
The rate of new CEOs who are women held at 28% to finish out 2023, higher than the 26% of new CEOs who were women in 2022.
Meanwhile, the percentage of women CEOs leaving the top spot rose to 24% in 2023, up from 19.5% during the corresponding period in 2022. 2023 witnessed more new CEOs who are women than any previous year.
Internal vs External Replacements
Companies more often looked externally for their CEO replacements than in 2022. For public entities, 64% of companies had internally groomed replacements, down from 69% in 2022. Meanwhile, private and government entities looked outside their organizations 55% of the time.
Source: Challenger, Gray & Christmas, Inc. ©
“Succession planning is a crucial area for companies in the coming year. With pioneering technology creating both pitfalls and new opportunities for companies, Boards and C-Suites will need to decide what their next chapter looks like, including the skills their leaders need, as well as the skills gap that needs to be addressed,” said Challenger.
Where are CEO Exits Happening?
Government/Non-Profit led last month with 61 CEO exits, 46 of which occurred at Non-Profits. Non-Profits account for 361 of the 486 CEO exits that occurred in the sector in 2023, a 79% increase from the 271 announced in the Government/Non-Profit sector in 2022. This sector led all industries in CEO turnover in 2023.
The Health Care/Products sector was the second-highest industry for CEO exits last year with 189. This is a 70% increase from the 111 CEO exits in the Health Care/Products sector in 2022.
Technology follows with 173 CEO exits last year, up 26% from the 137 announced in 2022.
Hospitals announced 146 CEO changes in 2023, a 42% increase over the 103 CEO exits announced at Hospitals one year prior.
Reasons for Exits
Companies most often did not disclose reasons for their CEOs’ departures last, with 629 cases (33% of all CEO exits), up from 23% in 2022.
Another 395 CEOs have retired this year, accounting for 21% of all exits, down slightly from 25% in 2022. Just over 100 (101 or 5%) left for “new opportunities,” a slight decrease from the 7% who left for that reason in 2022.
Fifty-four CEOs found new positions within their companies last year, usually heading another division or location within the umbrella company, while 326 (17%) of CEOs “stepped down” into other C-level, advisory, or Board roles. During the same period last year, 22% of CEOs “stepped down” into some sort of Board or advisory role within their organizations.
Three CEOs left their posts due to allegations of professional misconduct in December for a total of 13 last year, nearly triple the 5 CEOs who left for that reason since 2020.
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