Trends
2024 Was The Massacre Year As It Hit Record High Of Global CEO Departures. What Caused This Massive Churn?
Global CEO Departures
If 2024 had a corporate theme song, it might just be “Another One Bites the Dust.” Across the globe, CEOs are stepping down faster than ever, leaving a trail of high-profile departures in their wake. From tech giants like Intel to retail moguls like Nike and Starbucks, it seems no company is immune to this trend. So, what’s causing this CEO massacre, and what does it mean for the business world?
The Numbers Don’t Lie
According to headhunter Russell Reynolds Associates, 2024 saw a whopping 202 CEOs across major global stock indices exit their roles—an increase of 9% from the previous year. Meanwhile, Challenger, Gray & Christmas, an outplacement firm, reported over 1,800 CEO departures by the end of 2024, making it the highest year for CEO turnover since they began tracking these changes in 2002. This represents a 19% rise compared to 2023, which had already set a record.
But it’s not just about the numbers. The reasons behind these departures are as varied as the companies themselves. Some CEOs left due to underperformance, others due to misconduct, and for some, it was simply a career pivot.
The Rise of Activist Investors
One of the most striking reasons for this surge in CEO exits is the growing pressure from activist investors. In fact, 43 CEOs stepped down within just three years of taking on their roles—a rate not seen since 2018. These investors, often pushing for quick returns and major strategic changes, are making CEOs’ lives increasingly difficult. When corporate leaders fail to meet these expectations, they often find themselves out the door.
A Reflection of a Changing Corporate Scene
So, what does this high turnover really mean? According to Nicolas Behbahani, a people analytics and HR data expert, CEO turnover can offer a snapshot of larger trends in the business world. He points out that it is a reflection of companies growing risk appetites and their search for leaders who can steer through a rapidly evolving ecosystems.
Indeed, 2024’s surge in departures illustrates the many challenges facing CEOs today. They’re not just dealing with the usual corporate tasks—setting a vision, managing finances, and strategizing for growth—but they’re also struggling with complex external pressures. From tech disruptions and sustainability issues to geopolitical crises and social unrest, CEOs are under fire from all sides. It’s a tough gig, and the pressure is showing.
The New CEO To-Do List. More Than You Can Handle?
Constantine Alexandrakis, CEO at Russell Reynolds Associates, paints a picture of just how overwhelming the role has become stating that the to-do list for any new CEO is now much larger; on top of steering the company’s strategy and financials, CEOs must also address urgent external risks like economic instability, geopolitical flare-ups, and the ongoing fight for social justice.
But that’s not all. The expectations on CEOs have grown, and they now have to focus on long-term goals, such as driving sustainability, embracing tech transformation, and improving diversity, equity, and inclusion (DE&I). And let’s not forget the need to create a work culture that meets the demands of an ever-evolving workforce. All these factors are making the CEO position increasingly stressful, leading to a mass exodus.
The Pandemic Aftermath
While the challenges facing today’s CEOs are immense, the COVID-19 pandemic likely accelerated many of these departures. The pandemic shook the business world to its core, forcing CEOs to make tough decisions that ultimately led some to question their career paths. With the world still recovering, many leaders are choosing to step away from the chaos, opting for a less stressful future.
Leaving Also Because…
In the fast track world of business, CEO departures are often seen as red flags, signaling trouble ahead. But not all exits spell doom and gloom. Sometimes, a leadership change can breathe new life into a company, bringing fresh ideas and perspectives that can steer it toward success. However, there’s also a growing trend of CEOs quitting while they’re still ahead—before the storm hits. Is this a strategic move, or a sign that something’s seriously wrong behind the scenes?
Sometimes, CEOs bow out before the ship starts to sink. This preemptive move, known as “quitting while you’re ahead,” can be an act of self-preservation. Branding expert Mark de Grasse explains that by resigning on their own terms, a CEO avoids the PR disaster that often comes with being ousted due to poor performance.
In these cases, stepping down isn’t necessarily a failure but a strategic exit. It’s a way for CEOs to avoid the backlash and media frenzy that follows when a company’s performance takes a nosedive. Instead of being remembered as the leader who couldn’t turn things around, they can leave with their reputation intact—at least for the time being.
The Cost of High CEO Turnover
But let’s be real—constant CEO turnover is a sign of instability. When CEOs are constantly coming and going, it’s tough for a company to maintain focus, execute its strategy, and achieve long-term goals. A revolving door at the top can confuse employees, investors, and customers alike, leading to a lack of confidence in the company’s direction.
Even if the departure is a strategic move, it’s hard to ignore the broader implications of such high turnover rates. It raises questions about the company’s leadership, and no matter how you spin it, instability isn’t something investors like to see.
Under Intense Scrutiny
As if the corporate world wasn’t stressful enough, today’s CEOs are under more scrutiny than ever. A recent study by The Conference Board, in collaboration with Heidrick & Struggles, ESGAUGE, and Semler Brossy, indicates a growing impatience among boards with underperforming CEOs. This has led to more CEOs stepping down or being forced out after failing to meet expectations.
Take Intel’s Pat Gelsinger, for example. Rumor has it he was given an ultimatum: either voluntarily step down, or face being ousted. It’s a tough situation for any CEO, but it’s becoming more common.
The study also found that over 40% of S&P 500 companies that replaced their CEOs this year had a total shareholder return that was below the 25th percentile. That’s a huge jump from just 30% in 2017, signaling a shift toward holding CEOs accountable for lackluster performance.
Deliver Results or Face the Consequences
With the S&P 500 experiencing strong overall performance, underperforming companies stand out like sore thumbs. In this climate, there’s little room for CEOs to slack off. Boards are becoming increasingly aggressive in holding CEOs accountable, and if leaders can’t deliver results, they’re getting replaced faster than ever.
Lyndon Taylor, partner at Heidrick & Struggles, put it bluntly, It’s a clear signal to CEOs-deliver value or face heightened scrutiny. Gone are the days when boards would patiently wait for turnaround strategies to bear fruit. Today’s CEOs are expected to produce tangible results in real-time, adapting to changing market dynamics on the fly.
If they don’t meet these heightened expectations, their jobs are on the line.
The Shifting Dynamics Between Boards and CEOs
This trend also reflects a broader shift in the relationship between boards and CEOs. Where once boards may have been more patient, now they’re proactively taking charge, making changes at the top to maximize shareholder value. As a result, the pressure on CEOs has never been greater. They can no longer afford to sit back and wait for the tides to turn—they have to deliver, and fast.
The Burnout Epidemic
As Aquisha Harris, founder and CEO of Aquisha Harris & Co., puts it, the demands on corporate leaders have never been higher. The relentless pace of change, coupled with the weight of strategic decision-making, has led to increased levels of burnout among top executives.
Today’s CEOs are juggling an ever-growing list of responsibilities—staying ahead of technological advancements, navigating economic turbulence, and managing shifting workforce dynamics. It’s no wonder that many are burning out.
Harris points out that the toll of sustaining effective leadership amid constant pressure has become a key factor in why some CEOs are choosing to step down. Instead of riding out the storm, they’re opting for a quieter exit, seeking respite from the overwhelming demands of the role. When the strain becomes too much to bear, the decision to resign seems like the only viable option.
Misconduct and Ethics in the Spotlight
While performance issues are still a leading cause of CEO turnover, there’s another significant factor at play in 2024: misconduct. A growing number of high-profile CEOs have been forced out due to violations of company policies and ethical lapses. Once seen as untouchable, CEOs are now under intense scrutiny for their personal and professional behavior, both in and out of the workplace.
Take, for example, Alan Shaw, former CEO of Norfolk Southern, who was terminated after an investigation revealed a consensual relationship with the company’s legal chief, a breach of company policy. Or Dan Arnold of LPL Financial Holdings, who was ousted over unspecified comments that violated the company’s commitment to a respectful workplace. These are just a few examples of top executives being held accountable for their actions in a way that hasn’t always been the case in the past.
Challenger, Gray & Christmas reported that by October 2024, seven CEOs had exited their positions due to allegations of professional or sexual misconduct. The accusations ranged from financial mismanagement to inappropriate personal behavior, indicating a growing intolerance for ethical lapses among corporate leaders.
The Growing Demand for Accountability
So what’s driving this shift? Society’s standards are changing, and so are the expectations placed on corporate leaders. Companies are increasingly recognizing the reputational and financial risks associated with unethical leadership. Employees, customers, and investors now demand higher ethical standards, and they’re not afraid to hold leaders accountable when those standards are violated.
This has led to boards taking a firmer stance on misconduct, showing they’re willing to make the tough calls—even when it means removing high-ranking executives. It sends a clear message: unethical behavior, no matter how successful or influential the leader, will not be tolerated.
What Does the Report Say About CEO Turnover in 2024?
Even as the year 2024 has been a record-breaking year for CEO turnover, with a staggering 202 CEO departures globally, surpassing the six-year average of 186. The trends in CEO turnover reflect larger economic shifts and changing expectations in leadership, from the impact of market volatility to the evolving pathway into the role.
Let’s break down the key points from the report and look into the factors driving these changes.
The increase in turnover is largely attributed to two major factors: market volatility and the heightened scrutiny on corporate leaders today.
The data also reveals an interesting trend, fewer CEOs are willing to take on multiple tenures. More and more executives are opting to retire from executive life after stepping down, signaling the growing pressures associated with leading major corporations. Instead, we’re seeing a rise in “step-up” first-time CEOs, many of whom are appointed through planned succession processes. These CEOs are often internal candidates, although external candidates are also taking up the mantle in some cases.
This shift in leadership dynamics speaks to a changing corporate ecosystem, where the demands placed on CEOs are reshaping who is suited for the role and how succession is planned.
Tech Sector
One of the most striking developments in 2024 is the substantial rise in CEO turnover within the tech sector. CEO turnover in this industry has surged by 90%, largely due to the boom in investments related to artificial intelligence (AI), digital infrastructure, and software development. These rapidly growing fields are triggering the creation of new companies and a demand for fresh leadership talent.
However, the tech sector is also notable for recording the lowest proportion of incoming CEOs with prior CEO experience—only 8%.
This is indicative of a shift in how companies in emerging fields are seeking leadership: while experience in leadership remains valuable, the fast-paced nature of industries like AI and software development is fostering opportunities for leaders who bring fresh perspectives, often from within the companies themselves.
Internal CEO Appointments Hit Record Levels
In 2024, the number of internal CEO appointments reached an all-time high, with 73% of incoming CEOs promoted from within their organizations. This is a significant increase over the six-year average of 69%. The trend indicates that companies are placing a stronger emphasis on long-term succession planning and leadership continuity.
Importantly, 22% of all CEO departures in 2024 occurred as part of a planned succession process, which is also the highest level recorded in recent years. This speaks to the increasing recognition of the value of a well-thought-out leadership transition process that ensures stability and the continued success of the organization.
CEO Turnover as an Economic Indicator
CEO turnover is often seen as a barometer of broader market conditions. High turnover can signal a company’s willingness to take risks and innovate, while low turnover may indicate a preference for stability in uncertain times. The rise in turnover in 2024 reflects both market volatility and a growing willingness among organizations to make bold strategic changes in response to shifting economic scene.
The turnover in publicly listed companies has also followed this trend, with 220 CEO appointments globally in 2024, representing a notable increase in corporate shifts. The turnover in public firms has been particularly high since 2018, with 2024 marking the highest rate in six years.
Regional Variations in CEO Turnover
CEO turnover in different regions reveals interesting patterns. For instance, in 2024, the S&P 500 saw 60 CEO appointments and 58 CEO departures, while the ASX 200 recorded 27 appointments and 27 departures, and the FTSE 100 had 14 CEO appointments with 12 departures.
These numbers show that turnover rates are not uniform across the globe, with some regions seeing more stability than others. However, the broader trend points to an increasing pace of leadership changes as companies face mounting pressures and evolving market conditions.
Women in Leadership
Despite growing attention on diversity and inclusion, women remain underrepresented in the CEO role across the world. In 2024, women accounted for just 11% of CEO appointments globally, with only 24 women appointed to the role compared to 196 men. However, regional variations paint a somewhat more optimistic picture.
For example:
—In the S&P 500, 15% of CEO appointments were women (9 women).
—In the ASX 200, women accounted for 7% of CEO appointments (2 women).
—In the FTSE 100, 14% of CEO appointments were women (2 women).
While these numbers are still far from parity, they indicate some progress, especially in larger, more competitive markets like the S&P 500.
The Rise of First-Time CEOs
In 2024, a remarkable 85% of CEO appointments at public companies were for first-time CEOs—individuals who had never held a CEO position at a publicly listed company before. This indicates that many organizations are looking to new leadership with fresh ideas and perspectives to guide them through periods of change. This trend is particularly evident in the technology sector, where innovation and disruption are the driving forces.
Interestingly, first-time CEOs tend to have longer tenures compared to seasoned leaders. On average, first-time CEOs at public companies in 2024 held the position for 1.8 years longer than those with prior CEO experience, which could point to the potential for long-term stability when companies take a chance on fresh talent.
The Last Bit
