November CEO Turnover Up Month Over Month, Down From 2019

The number of U.S. CEOs who lost or left their jobs in November increased by 20% month over month, from 92 in October to 110. The November total represents a year-over-year drop for the month of 26%. In November of 2019, 148 CEOs left their positions.

Outplacement firm Challenger, Gray & Christmas released its October report Wednesday morning, noting that for the first 11 months of 2020, 1,218 CEOs have left their positions, down by 18% compared with the same period last year.

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.

Health care companies (excluding hospitals) experienced the greatest number of CEO changes last month with 17. That brings the total for health care firms to 123 for the year, an increase of 22% from the first 11 months of 2019. Among hospitals, seven CEOs left their jobs in November, bringing the year-to-date total to 97, a decline of nearly 8% year over year.

Andrew Challenger, vice president of Challenger, Gray, commented: “The pandemic has impacted every sector, but Health Care companies specifically have had to navigate a shifting landscape, especially as all hands have been needed for COVID and other elective visits and procedures have often been put on hold.”

A total of 14 government/nonprofit sector CEOs departed in November, the second-highest category total for the month. For the year to date, 216 CEOs in this sector have departed, the most of any sector but 30% fewer than in the same period last year.

The third-highest number of monthly changes came in the financial sector where 11 departures were counted. For the year to date, 72 financial sector CEOs have left their jobs, about 36% less than the 112 who left through the first 11 months of last year.

Of the CEOs who departed in November, 26 retired and 12 found new opportunities. According to Challenger data, stepping down into a different role within the company was the most frequent reason for a CEO departure in November. A total of 33 CEOs stepped down last month.

The average age of a departing CEO in November was 60.3 years, compared to an average age of 53.2 among 2019’s departing chiefs. The average tenure of these CEOs was 11.6 years last month, compared with 9.4 years in November 2019.

The number of departing CEOs who were replaced by outsiders in the first 11 months of 2020 rose from 540 in the 10 months through October to 587 through last month. In 2019, the full-year total was 784.

By gender for the year to date, 177 women have replaced men in the top job while 88 men have replaced women and 74 women have replaced other women. Men have replaced men 756 times in the first 11 months of the year, and 22.9% of all new CEOs named in the same period were women. Through November, the percentage of women replacements is higher than the 21.7% total for all of last year.

According to the report, one CEO was terminated in November and two were forced out by scandal. None left due to allegations of sexual misconduct or racism.

Texas companies saw the highest number of CEO changes last month with 12. For the year to date, 105 Texas-based CEOs have left their jobs, down from 125 in the same period last year. Eleven companies in California and 10 in Texas also saw CEO departures last month.

Earlier this month, Challenger, Gray announced that job losses in November decreased by 20% month over month to 80,666 but were still 45% higher than the cuts announced in November 2019. In the first 11 months of this year, nearly 2.23 million jobs have been cut, nearly four times the cuts announced in the same period last year. The total number of jobs lost this year is already higher than the previous record of 1.96 million job cuts announced in 2001.

On Thursday, the Bureau of Labor Statistics is expected to report 724,000 new claims for unemployment benefits. That is about 1.7% above last week’s 712,000 initial claims for benefits.