Why is CEO turnover in the US so high?

Change at the top has been impacting many of the world’s biggest companies throughout 2023.

And now, fresh research published by Challenger, Gray & Christmas has revealed the shocking extent of CEO turnover in the US during the first nine months of the year. 

From January to September, 1,425 Chief Executives left their post, up 47% compared to the same period last year and the highest total ever recorded by the executive outplacement specialist since it began tracking this data in 2002.

In September alone, 164 CEOs left their jobs, a dramatic increase (122%) from the 74 who moved on in the same month last year. 

During the third quarter, 518 CEOs departed – the most in a quarter on record and a 166% rise compared to the same period in 2022. 

Number of new female CEOs holds steady

The rate of new female CEOs held steady during the first nine months of 2023.

Women accounted for 29% of newly-appointed chiefs from January to September, up from 26% in the same period last year. 

Female CEOs leaving the top job was 22%, up from 18% last year, but 2023 has seen more new female CEOs than in any previous year where data has been collected by Challenger, Gray and Christmas.

Looking at September, 42% of new female CEOs went into government/non-profit organisations. Almost 10% were appointed at healthcare or product companies, while 7% took up positions at hospitals. 

The traditionally male-dominated fields of finance and technology accounted for 6% and 4% of new appointments respectively. 

CEOs head for the exit door

Researchers found almost a third (31%) of companies whose CEOs departed from January to September were reluctant to provide a reason, up from 24% last year. Retirement was the reason for 22% of all exits.

Almost 50 CEOs found new positions within their existing organisations, usually heading up another division or location within the umbrella company, while 241 (17%) “stepped down” into other C-level, advisory or board roles. 

Government/non-profit was the sector with the most CEO exits in September, with 28. 

Andrew Challenger, a workplace expert and SVP at Challenger, Gray and Christmas, suggests a testing set of social, economic and political circumstances is influencing change. 

“Companies are revving up for economic changes in the coming months,” says Challenger. 

“With the rise of labour costs and interest rates, companies are looking to new leaders.”

Meanwhile, eight leaders left their posts due to allegations of professional misconduct and two departed due to sexual harassment allegations.

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