There seem to be very few chief executive officers like Warren Buffett who have run their companies for decades. Some founders, like Larry Ellison of Oracle, hang on for decades. However, the tenures of most CEOs last only a decade. When companies hit trouble, they can be replaced quickly. Kevin Johnson of Starbucks found out just how quickly when its board tired of his plans and brought back Howard Schultz, who has been CEO thrice before.
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According to employee benefits company Challenger, Gray & Christmas, CEO exits are at an all-time high. The number of changes at U.S. companies in April was up 3% from March and hit 123. In the first four months of the year, the figure was an all-time high for the period at 518.
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Andrew Challenger, senior vice president of Challenger, Gray & Christmas, said, “Many companies are making changes at the top to address rising costs for both business and consumers.” However, several CEOs retired in April, while some moved on to other companies. Nevertheless, many were just pushed out.
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In the period, the government/nonprofit sector had the most CEO exits at 77. It was followed closely by health care/products at 63 and technology at 42. There was no pattern across sectors. This makes the Challenger Gray observation the best available.
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If Challenger Gray is right, ballooning inflation and a possible recession will drive the CEO exit figures higher.
CEO Exits Hit Record
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