Record Number of US CEOs Left Their Jobs in 2019
The number of U.S. CEOs who left their jobs in December added to a record number of fourth-quarter departures, according to outplacement firm Challenger, Gray & Christmas. A total of 160 CEOs left their jobs in December, bringing the fourth-quarter total to 480, the highest level since Challenger began reporting the data in 2002.
For the full year, 1,640 CEOs left their jobs, nearly 13% higher year over year and the highest level ever.
The December total was 29% higher year over year, and it was 8% higher than November’s total of 148. The October total of 172 remains the monthly high for 2019.
In all of 2018, a total of 1,452 CEOs left their jobs, a jump of 25% from the prior year’s total of 1,160. Of the 2018 total, 11 were due to allegations of sexual misconduct. In 2019, three CEOs left their jobs following allegations of sexual misconduct.
Vice President Andrew Challenger noted: “Following the #MeToo movement, companies were determined to hold CEOs accountable for lapses in judgement pertaining to professional and personal conduct, creating higher ethical standards at the C-level. What may have gone unrecognized or was downplayed in the past was not overlooked by boards, shareholders, or the general public in 2019.”
The average age of a departing CEO in December was 57.2 years, compared to an average age of 56.5 among 2018’s departing chiefs. The average tenure of these CEOs was 11.5 years last month, compared with 10.8 years in December 2018.
Of the CEOs who have departed in 2019, 395 retired and 154 found new positions with other companies. Very few of the departing CEOs (just 15) stepped down to other positions in their companies, either as board members or another C-level executive. In 2018, more than 350 departing CEOs took other positions at the same company.
Andrew Challenger commented: “[T]he majority of these departures were under unremarkable circumstances. Many CEOs retired from their positions after a long tenure, leaving the company in relatively good shape. Others left because their skills were in demand and they were offered new opportunities. Still more found the tremendous advances in technology and shifts in consumer behavior called for new leadership.”
The number of departing CEOs who were replaced by outsiders rose from 564 in 2018 to 784 in 2019. The last time outside replacements outnumbered insiders was 2013. A total of 620 insiders took over the CEO job in 2019, down from 630 in 2018.
The government/nonprofit sector experienced 339 CEO changes in 2019, of which 29 occurred in December. The total represents a 22.8% year-over-year increase.
In the technology industry, 216 CEOs left their positions last year, including 16 in the month of December. For the full year, CEO departures in the industry are up 42% compared to 2018.
According to Challenger, two CEOs were terminated from their positions in December, bringing the full-year total to 24, down from 23 in 2018. Scandals forced out 20 CEOs in 2019, up from 14 in the prior year.
By state, California companies saw the highest number of CEO changes last year with 219, 18 of which occurred in December. Companies in Texas saw nine departures last month and 134 for the year, while New York reported 14 changes in December and 101 for the full year.
Departures by Quarter
Source: Challenger, Gray & Christmas