CEO Turnover Report: CEOs Are Leaving Their Posts Sooner, Younger; Exits Up 17% in September
Published October 26, 2022
The number of CEO changes at U.S. companies rose 17% from the 63 in August to 74 in September. According to a report released Wednesday by global outplacement and business and executive coaching firm Challenger, Gray & Christmas, Inc., CEOs who left their posts this year are four years younger on average than those who left their posts last year.
“The last year has seen a complete revamping of the labor market. Many workers are choosing not to re-enter for a multitude of reasons, chief among them being lifestyle changes and early retirements. Those who can, are in many cases deciding they want to pursue their own interests instead of a traditional job. That’s certainly a possibility as we see younger CEOs leaving their posts,” said Andrew Challenger, Senior Vice President of Challenger, Gray & Christmas, Inc. and job market expert.
So far this year, the average age of exiting CEOs is 56, down from 60 in 2021. With the exception of 2020, which brought about unprecedented circumstances, this year is shaping up to be the youngest batch of exiting CEOs since Challenger began tracking ages in 2010.
Age & Tenure of CEOs Dropped in 2022
Tenure has also fallen this year to 9.96 years on average. The last time Challenger tracked tenure this low was in 2014, when CEOs averaged 9.83 years.
“The churn in the Technology sector could also explain younger CEOs leaving after shorter tenures, as these leaders tend to be young and leave during a new phase of growth or funding round,” added Challenger.
Technology firms are experiencing the second-highest total of CEO exits this year with 108, down 12% from the 123 who left their posts through the same period last year. Government/Non-Profit entities lead with 207, a 5% decrease from the same period in 2021.
Q3 CEO Exits Lowest Since 2004
Through September, 969 CEOs have left their posts, down 2% from the 991 who left their posts through the same time last year. While year-to-date CEO exits are virtually unchanged, the third quarter saw just 195 CEO exits, the lowest quarterly total since Q4 2004, when 147 CEOs left their posts. It is 49% lower than the 379 CEO changes that occurred in the second quarter of 2022, and 44% lower than the same quarter las year.
The majority of CEOs stepped down from their roles this year with 232. These CEOs usually serve as the companies Chair or advisor to the new CEO. Another 229 retired, while 70 found new opportunities, and 61 resigned.
Women CEOs Hold Steady
The rate of women taking over the CEO role continues to hover near 26%, similar to the year-end total last year, and up significantly from the 12% recorded in 2010.
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