The Economy

Pace of CEO Departures Spikes in 2018

The last time so many U.S. chief executives left their posts, the country was sliding into a historic recession.
David McCannDecember 12, 2018

A boiling cocktail of business turmoil and uncertainty has contributed to more U.S. CEOs leaving their posts in 2018 than in any year since 2008, when the Great Recession dawned.

And by year-end, the number of such departures is virtually certain to surpass the 1,361 chief executives who left their jobs a decade ago. Through November of this year there were at least 1,323 exits, and the annual December toll invariably exceeds 80. In fact, the 11-month total for 2018 was 14% greater than the full-year count for 2017.

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The numbers are courtesy of executive outplacement and career-transition firm Challenger, Gray & Christmas, which released the data on Wednesday. The firm tracks turnover of all types of U.S. CEOs — at public and private companies of all sizes from the Fortune 100 to startups, as well as government and nonprofit organizations — that is reported in public filings and media announcements.

Most of this year’s CEO departures have been of the usual types: retirements (27%); transitions to other positions in the organization, often board chair (26%); resignations (19%); moves to other organizations (10%); and interim-period endings (6%). In 4% of cases, no reason was given.

But it’s the sheer number of transitions that’s eye-opening. The trend is very unlikely to be a mere statistical oddity.

“While current economic conditions are quite different from those in 2008, the fluctuating markets, uncertainty with trade, and investor concerns may have companies putting new leadership in place to head off a coming downturn,” said Challenger, Gray & Christmas vice president Andrew Challenger.

“A number of industries are undergoing serious disruptions due to shifting consumer behavior,” he added. “Companies in finance, technology, retail, and manufacturing are finding that in order to respond fully to those shifts, changes need to be made at the top.”

Twenty-one CEOs have been terminated by their boards this year, and 27 have left following allegations of sexual misconduct, professional misconduct, other scandals, or legal trouble.

“In light of the #MeToo movement, companies are not taking any chances with leaders who engage in inappropriate behavior or conduct in violation of companies’ codes of ethics,” Challenger noted. “It not only harms companies brands and reputations, it very much impacts current and future employees, productivity, the work environment, and company culture.”

The pace of CEO departures this year was actually on track with most other recent years through July. But then, in each month from August through November, there were from 147 to 154 exits. Those were historically high numbers: In no other month from 2011 through mid-2018 was there more than 132 such events.

Other reasons for CEOs leaving their posts included company acquisitions/mergers (16 CEOs), “pursuing other opportunities” (12), health (7), financial trouble (7), contract expiration (6), and death (4).

The greatest number of CEO departures (258) was in the government and nonprofit sectors. Among industries, what Challenger, Gray & Christmas calls “computers” led the field (138 departures), followed by financial services (135), hospitals (124), health care (119), and services (84).