CEO Exits Jump in August: Technology, Entertainment/Leisure, Real Estate, Construction See Spikes as CEO Turnover Hits 200
The number of CEO changes at U.S. companies rose 34% to 200 in August from 149 one month prior. It is up 27% from 157 CEO exits recorded in the same month last year, according to a report released Thursday by global outplacement and business and executive coaching firm Challenger, Gray & Christmas, Inc.
So far this year, 1,450 CEOs have announced their departures, the highest year-to-date total on record. It is up 15% from 1,261 exits that occurred during the same period last year, which was the previous year-to-date record.
Source: Challenger, Gray & Christmas, Inc.
“Companies are ushering in new leaders at an unprecedented clip. Economic uncertainty tends to drive leadership decisions and several indicators suggest not only is the labor marketing softening, but the market overall may be heading for a downturn,” said Andrew Challenger, Senior Vice President of Challenger, Gray & Christmas, Inc.
“Companies are cutting costs across the board, as well as pivoting to new procedures, operations, and in some cases products, in light of new technologies. It’s an ideal time for new leaders to ascend,” he added.
Women CEOs
While companies are making leadership changes, they are increasingly opting to fill the role with men. The rate of new CEOs who are women fell 0.7% to 27.2% in August. It is down from the 28.9% of incoming CEOs who were women during the same period last year.
Where are CEO Exits Happening?
Government/Non-Profit is leading all industries this year with 311 CEO exits, 29 of which occurred in August. Twenty-seven of them were in Non-Profits. This is down 4% from the 325 CEO exits in this sector during the same period last year.
Healthcare/Products companies, which include medical supply and other device manufacturers, but excludes Hospitals, also saw 29 CEO exits last month for a total of 152. This is up 49% from the 102 CEO exits recorded during the same period last year.
Technology announced 20 CEO exits last month for a total of 152 for the year, an increase of 19% from the 129 exits recorded in the first eight months of 2023.
Entertainment/Leisure announced 20 CEO exits in August, for a total of 101. This is a 58% increase from the 64 CEOs who left the top spot in this sector last year.
Real Estate announced 7 CEO exits last month, the highest monthly total since January 2019, when the sector announced 8 CEO exits. Construction also announced 7 CEO exits, the most in a month Challenger has ever recorded.
“The recent lawsuit and settlement with the National Association of Realtors (NAR) and other brokerages certainly has serious repercussions for leaders at all Real Estate companies. Meanwhile, the Feds decision to lower interest rates will have overarching implications for housing, generally,” said Challenger.
Reasons For Exits
This year, 406 CEOs stepped down into other C-level, advisory, or Board roles. Another 361 CEOs left companies without giving a reason, while 333 CEOs retired from their companies.
Source: Challenger, Gray & Christmas, Inc.
The average age of exiting CEOs in August was 61, the highest average age since October 2021, when the average age of the exiting CEO was 62.
“Long-time and older leaders appear to be stepping down during this period, something we haven’t seen since the pandemic,” said Challenger.
Source: Eurostat
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