According to the latest report from Challenger, Gray & Christmas, an employment consulting and training organization, as of October 2024, more than 1,800 CEOs have resigned in the United States, a 19% increase compared with 2023. Andy Challenger, senior vice president of Challenger, Gray & Christmas, pointed out in an interview that the wave of CEO resignations is mainly due to the multiple impacts of the long tail phenomenon of COVID-19 and industry changes. During the epidemic, companies tended to adopt conservative management and avoid changing leadership amid turmoil.
Technology, health care, entertainment and leisure industries have become the "hardest hit areas" for CEO departures. These industries have flourished in the years after the new crown epidemic. However, as the market gradually stabilizes, boards of directors have begun to re-examine leadership. Chanler said the rate at which CEOs are replaced in these industries is "surprisingly fast."
From Intel to Disney, no CEO of a major company is immune
For example, chip giant Intel faced annual losses for the first time since its founding in 1986. Its CEO Pat Gelsinger announced his resignation, and Intel also quickly launched a search plan for a new CEO. Automaker Stellantis also changed its leadership amid falling stock prices and poor financial performance.
Former Starbucks CEO Laxman Narasimhan suddenly resigned after only one year in office. Forbes reported that although Starbucks did not mention the reason for his resignation, it may be due to the long-term decline in sales and pressure from investors that Starbucks will face. related. New CEO Brian Niccol has implemented drastic reforms since taking office, and the market has responded positively to this, indicating that the board of directors has an urgent need for leaders who can deliver results in the short term.
Boeing CEO Dave Calhoun also announced his resignation in 2024. He took over as CEO in response to safety issues with the 737 Max passenger aircraft. Hertz CEO Stephen Scherr was replaced due to mistakes in the electric vehicle strategy, which led to losses for the company, showing that the company has limited risk tolerance for major strategic adjustments.
Disney's Bob Chapek was forced to resign after only two years as CEO due to the company's poor box office performance and controversial internal management style. Eventually, former CEO Robert Chapek was replaced. Robert Iger is at the helm again. This change highlights that when companies face a crisis, they tend to choose leaders who are familiar and stable.
"Short-lived" has become a trend in the tenure of CEOs of S&P 500 companies, with the average tenure being less than 5 years.
In addition to the wave of layoffs, "short-lived CEOs" have also become the latest trend. According to data from Russell Reynolds Associates, eight CEOs left their positions in the third quarter of 2024 after serving for less than three years. This set a new record for the largest number of "short-term" CEOs in the third quarter since 2019.
Data from consulting firm Equilar also pointed out that the average tenure of CEOs of S&P 500 companies has dropped, from 6 years in 2013 to 4.8 years in 2022. "Short-lived CEOs" reflect the increasing challenges and pressures faced by leaders in the current business environment.
In addition, the ability to respond to ESG, supply chain and technological transformation has also become an important indicator to measure the performance of leaders. Many companies are looking to more cautious CEO appointment strategies to ensure new leaders can quickly adapt and make an impact.
Source: Forbes, Challenger, Gray & Christmas, Russell Reynolds
