January CEO Exits at Highest Rate in 8 Years

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In the first month of 2018, 132 CEOs left their jobs, according to the latest report from outplacement firm Challenger, Gray & Christmas. That’s the highest monthly total since February 2010, as well as up 39% month over month.

In all of 2017, a total of 1,160 CEOs left their jobs, down 7% from the prior year’s total of 1,248. Of the total, 11 were due to allegations of sexual misconduct, up from three in both 2015 and 2016.

CEO John Challenger noted:

January is typically a busy month for CEO turnover, as companies have made leadership decisions in the fiscal year’s end for the upcoming year. However, the average number of exits in January is 106. Last month’s high total may signal that companies are coming to grips with how recent legislation may impact operations, and have chosen new leadership to guide their companies through any changes.

Many of the former CEOs (27% in January) remain at their companies, typically as members of the board of directors. The average tenure of a departing CEO at the company was 17 years, and the average age was 60.3 years. Challenger Gray reports that six former CEOs assumed other C-suite positions.

Of the 132 CEOs who left, 38 retired and 22 resigned, while 12 found new positions with other companies. Government/nonprofit companies saw 20 CEOs depart last month, while computer companies lost 19 and financial companies had 17 fewer. California led all states with 20 departing CEOs, while Texas reported 12 departures.

While the age of departing CEOs is roughly equal to the age of CEOs who left their jobs in January 2017, the 17.2-year tenure is nearly six full years longer than the average tenure of departing CEOs in January 2016. This may indicate that boards are “replacing long-term CEOs for someone with new ideas and ways of doing things,” according to Challenger.