Published February 6, 2019
U.S.-based companies announced 157 chief executive officer changes to start the year, the highest monthly total on record, according to a report released Wednesday from global outplacement and executive coaching firm Challenger, Gray & Christmas, Inc.
January’s total was 21.7 percent higher than the 129 CEO exits announced in December and 18.9 percent higher than the 132 CEOs who left their posts in January of last year. It is the highest monthly total since Challenger began tracking in 2002.
Why Are So Many Companies Changing CEOs?
“The last two quarters have seen record-setting totals for CEO turnover. Companies are responding to the strong, but uncertain, economic conditions by engaging new leadership who can both set companies on a path for growth while also gearing up for a potential downturn,” said Andrew Challenger, Vice President of Challenger, Gray & Christmas, Inc.
“Meanwhile, concurrently, the strong economy over the last nearly two years has led to a number of new start-ups, which are now turning to more seasoned leaders, adding to high turnover numbers in the CEO spot,” he added.
Challenger tracks CEO changes at companies that have been in business for at least two years, with a minimum of ten employees.
Industries with the Most Leadership Change
“We’re also seeing a number of companies in Retail, Finance, Automotive, Health Care, and Manufacturing, among others, that are responding to new technologies by installing leaders whose job is to pivot long-standing businesses to keep up with demand,” said Challenger.
Companies in the Government/Non-Profit sector lead all industries in CEO changes with 29 in January, followed by Health Care/Products companies, including medical device manufacturers, with 17.
Financial and Services firms follow with 13 CEO exits apiece. Pharmaceutical and Technology companies each had ten CEO changes in January.
Beginning in January, Challenger began breaking out CEO exits at Cannabis and Financial Tech companies. Two CEO changes were announced by Cannabis companies in January, while one CEO exit was announced by FinTech.
Reasons for Exits
The majority of CEOs (73) stepped down into other positions within the company, usually as a Chairperson or other member of the C-Suite. Another 41 CEOs retired, while 17 found new positions in other companies. One CEO reportedly left due to scandal, another due to professional misconduct allegations, and one other due to an internal investigation.
California companies reported the highest number of CEO changes with 18, followed by New York and Texas, which each had 11. Missouri and Florida each reported nine CEO changes.
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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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