C-Suite Leader Turnover Down 20%

Published Jan 13, 2021

CEO turnover fell in December, as 96 CEOs left their posts during the month, 12.7% lower than the 110 chief executives who left their positions in November, according to a report released Wednesday from global outplacement and business and executive coaching firm Challenger, Gray & Christmas, Inc.

December’s total is 40% lower than the 160 chief executives who left their posts in the same month in 2019. December 2019 was the second-highest monthly total on record after October 2019, when 172 CEOs left their posts.

Comparing U.S. Recessions

“The Recession created by the pandemic and uncertainty surrounding some of the policies of the current administration kept many companies from making major leadership changes in 2020. This is directly counter to how CEO movement has occurred during Recessions and economic downturns in the past,” said Andrew Challenger, Senior Vice President of Challenger, Gray & Christmas, Inc.

During the 2008 Great Recession, Challenger tracked 1,484 CEO exits, as companies closed or underwent massive restructurings amid the financial crisis, the most on record at the time. That record held until last year, when the labor market was strong and business outlooks were mostly positive.

“Indeed, 2019 was marked by low unemployment and a tight labor market. The ongoing trade war was taking a toll on manufacturing industries and a downturn was expected after a decade of growth, but nothing like what we saw in 2020,” he added.

Fourth quarter exits totaled 298, down 15.6% from the 353 third quarter exits, and 37.9% from the 480 recorded in the fourth quarter of 2019.


Source: Challenger, Gray & Christmas, Inc. ©

What Industries Saw the Most Change?

2020 CEO turnover was led by the Government/Non-Profit sector with 237 exits, down 30% from the 339 tracked in the industry in 2019. These companies include government agencies, tourism and transportation authorities, Chambers of Commerce, education companies, charities, and foundations.

The Technology sector followed with 143, down 34% from the 216 announced in 2019. Health Care/Products manufacturers announced 130 CEO exits, the third highest in 2020. This is up 21% from the 107 CEO changes recorded in this sector in 2019. The Services sector announced 106 CEO exits, up 26% from the 84 CEOs announced in the same time in 2019.

Outside-Hire vs. an Inside-Hire

Like in 2019, companies again went outside the organization for new leadership more often than promoting from within. Last year, Challenger tracked 636 external CEO replacements and 528 internal replacements. Prior to 2019, the last year when companies more often replaced CEOs with external hires occurred in 2013.

Women made slight gains in the CEO role in 2020. In fact, the highest percentage on record of new CEOs who are women was in 2020, according to Challenger tracking. Last year, 22.6% of new CEOs were women, up from 21.7% in 2019 and the previous high of 22.5% in 2018.


Why Did These CEOs Leave Their Posts?

The majority of CEOs (352) stepped down from their roles in 2020, usually into the Board Chair or some other C-level role. Another 295 retired, while 138 saw their interim periods end. 

Three CEOs left due to allegations of professional misconduct, down from 15 companies that disclosed this reason in 2019. One CEO left due to allegations of sexual misconduct in 2020, compared to three in 2019. Four CEOs left amid allegations of racism in the organization or committed by the individual in 2020.

“Companies in 2018 and 2019 were sensitive to the demand for accountability due to the #MeToo movement. In 2020, we saw a cultural demand for the same accountability around systemic and structural racism,” said Challenger.

“It’s important for organizations to continue holding themselves accountable in order to achieve equity in hiring, which will ultimately lead to a more representative workforce, creating more adaptable companies with myriad perspectives, and a stronger bottom line,” 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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