US CEO Departures Hit Highest Year-to-Date Total Ever
The number of U.S. CEOs who lost or left their jobs in May rose by 17% compared to the April total. Last month, 114 CEOs left their jobs, compared to 97 who left in April. Year over year, CEO turnover increased by 25% (from 91). All that said, CEO turnover in the first five months of 2019 is up 16% year over year, from 541 to 617 CEO job changes.
Outplacement firm Challenger, Gray & Christmas reported the data Wednesday. In the first quarter of this year, 416 CEOs departed, the highest first-quarter total since the firm began reporting the data in 2002.
The 2018 fourth-quarter total of 429 departing CEOs also was the highest quarterly total in the history of the report. A total of 1,452 CEOs left their jobs in 2018, the second-highest total ever. In all of 2017, 1,160 CEOs left their jobs, down 7% from the prior year’s total of 1,248.
Vice President Andrew Challenger said, “Though the tariff threat with Mexico seems to have subsided, companies appear to be preparing for a contraction in the market after so many months of expansion. Further evidence of this is in our report on announced job cuts, which saw a 46% increase in layoff announcements in May.” The firm said that more than 58,000 jobs cuts were announced in May.
Of the CEOs who left in May, 51 stepped down, 28 retired and nine took new positions with another company. One took another position with the same company. Challenger noted that no CEO left due to sexual or professional misconduct allegations. No CEO was involuntarily terminated last month.
The government/nonprofit sector saw 27 CEO changes in May, bringing the five-month total to 1,414, the most of any Challenger category and a 29% year-over-year increase. Financial sector CEO departures in 2019 increased by 10, month over month, to 58, and the number of tech industry CEOs who have departed this year has dipped by four to 65 this year. Health care industry CEO departures total 66 for the year to date and are 29% higher than in the first five months of last year.
The average age of a departing CEO in May was 61.4 years compared to an average age of 60 among May 2018’s departing chiefs. The average tenure of these CEOs was 11.1 years last month compared with 8.8 years in May 2018.
The following chart from Challenger’s April report shows CEO departures by month from January 2010 to April 2019.