CEO Turnover on Pace for a Record Year

A record number of chief executive officers have left their jobs in the first eight months of 2023. Included in that group are Howard Schultz of Starbucks, Susan Wojcicki of YouTube and Steve Rendle of VFC.

Those are just three of the 1,261 CEOs who have departed for one reason or another this year according to the latest CEO turnover report from outplacement firm Challenger, Gray & Christmas. In its August report, released Tuesday morning, the firm said that 157 CEOS stepped down last month. The year-to-date total is up 41% compared to the first eight months of last year and up 149% compared to the August 2022 total. (These American CEOs are paid 1,000 times more than their employees.)

Challenger Gray Senior Vice President Andrew Challenger commented, “Some indicators suggest the economy might be slowing somewhat, and with the rise in labor costs and potential uncertainty, companies might be looking for new leadership.”

Turnover has been highest in the government/nonprofit sector. So far this year, 325 CEOs have stepped down, compared to 176 at the same point last year. Challenger noted, “During economic uncertainty, fundraising can dry up and Boards may look to new leaders to attract new donors.”

Technology company CEOs were the second most-replaced group, both for the year and for August, with 129 CEO departures for the year and 17 in August.

Nearly half of all replacement CEOs have been hired from outside the company. The number of women replacing men is up from 136 last year to 201 this year, and the number of women replacing women is up from 78 to 129. Overall, nearly 29% of all new CEOs this year are women, up from about 26% last year.

Challenger Gray also tracks the reasons that CEOs leave their jobs. In most cases (404 this year), alas, no reason is given. The most commonly stated reason is retirement (288). Resignations have accounted for 78 CEO departures so far in 2023, and 17 were terminated. Six have been charged with allegations of professional misconduct, four are having legal troubles and two have been involved in scandals.

So far in 2023, artificial intelligence has replaced just one CEO. In late August, legal software maker Reveal acquired two competing AI-powered e-discovery companies, Logikcull and IPRO. Logickcull founder and CEO Andy Wilson said earlier this year that he intended to replace himself with artificial intelligence within a year. Now‌ we don’t have that to look forward to any longer.

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