CEO Turnover Plunges to 16-Year Low
The number of U.S. chief executive officers who lost or left their jobs in April tumbled by 49% month over month, from 94 to 48. The April total is 51% lower than a year ago and the lowest monthly total since November 2004.
For the first four months of 2020, 489 CEOs have left their positions, down by nearly 5% compared with the same period of last year. In the fourth quarter of 2019, CEO departures posted an all-time high of 480.
In all of 2019, 1,640 CEOs left their jobs, a jump of nearly 13% from the prior year’s total of 1,452. Of the 2019 total, three were due to allegations of sexual misconduct. In 2018, 11 CEOs left their jobs following allegations of sexual misconduct.
Vice President Andrew Challenger noted: “The COVID-19 outbreak has put the brakes on the economy in many ways. As millions file for unemployment, companies grapple with conducting permanent layoffs or furloughs and some are considering shutting down operations temporarily or even closing entirely.”
Challenger added: “The Tech sector is not immune to the current crisis, but it does continue to see strong hiring prospects, especially for the more established companies. Start-ups are having a more difficult time securing funding, and new leadership may be needed during this uncertain time.”
Nine tech sector CEOs departed in April, more than in any other category. For the year to date, 67 tech CEOs have departed, the most of any sector, and 45% more than in the same four months of 2019.
Of the CEOs who departed in April, nine retired and five found new opportunities. According to Challenger data, the most frequent reason for a CEO departure in April was stepping down into a different role within the company. A total of 15 CEOs stepped down last month.
The average age of a departing CEO in April was 53.4 years, compared to an average age of 30.0 among 2019’s departing chiefs. The average tenure of these CEOs was 6.8 years last month, compared with 8.8 years in April 2019.
The number of departing CEOs who were replaced by outsiders in the first four months of 2020 totaled 238. In 2019, the full-year total was 784. By gender for the year to date, 69 women have replaced men in the top job, while 40 men have replaced women and 35 women have replaced other women. Men have replaced men 291 times in the first four months of the year and 23.9% of all new CEOs named in the four-month period were women.
The government/nonprofit sector experienced six CEO changes in April, down from 19 in the same month a year ago. So far this year, 78 CEOs in the sector have left their jobs.
According to the report, just one CEO was terminated in April, while none were forced out by scandals or allegations of misconduct.
California companies saw the highest number of CEO changes last month with 12. For the year to date, 77 California CEOs have left their jobs, up from 62 in the same period last year. Five companies in Florida and Texas saw CEO departures last month.
Not all CEOs are job-hunting, retiring or playing musical chairs. Some are happily making a king’s ransom.