CEO Turnover Slowed in August; Down 11% for the Year to Date

CEO Turnover Slowed in August; Down 11% for the Year to Date

September 9, 2020

The number of U.S. chief executive officers who lost or left their jobs in August decreased by 13% month over month, from 125 in July to 109. The August total represents a year-over-year drop for the month of 31%. In August of 2019, 159 CEOs left their positions.

Outplacement firm Challenger, Gray & Christmas released its August report Wednesday morning, noting that for the first eight months of 2020, 897 CEOs have left their positions, down by 11% compared with the same period last year.

In all of 2019, a total of 1,640 CEOs left their jobs, an increase of nearly 13% from the prior year’s total of 1,452. Of the 2019 total, three were due to allegations of sexual misconduct. In 2018, 11 CEOs left their jobs following allegations of sexual misconduct.

The August report noted that one CEO stepped down because of racism. In July, one CEO was replaced due to racism, after three were replaced in June for the same reason. Those four represent all of the racism-related departures for the year to date.

Andrew Challenger, vice president of Challenger, Gray, noted that chief executives currently face critical decisions in highly uncertain times. Some, he commented, “rise to the occasion, … leading companies through turbulence never seen before.” Others find the challenges “incredibly difficult.”

“Many companies have delayed or abandoned planned actions due to these uncertainties,” Challenger added.

A total of 17 government/nonprofit sector CEOs departed in August, more than in any other category. For the year to date, 165 CEOs in this sector have departed, the most of any sector but 24% fewer than in the same period last year.

Of the CEOs who departed in August, 23 retired and seven found new opportunities. According to Challenger data, stepping down into a different role within the company was the most frequent reason for a CEO departure in August. A total of 35 CEOs stepped down last month.

The average age of a departing CEO in August was 52.0 years, compared to an average age of 68.5 among 2019’s departing chiefs. The average tenure of these CEOs was 8.7 years last month, compared with 10.6 years in August 2019.

The number of departing CEOs who were replaced by outsiders in the first eight months of 2020 rose from 381 in the seven months through July to 445 through August. In 2019, the full-year total was 784.

By gender for the year to date, 131 women have replaced men in the top job, while 68 men have replaced women and 60 women have replaced other women. Men have replaced men 544 times in the first eight months of the year, and 23.8% of all new CEOs named in the same period were women.

According to the report, no CEO was terminated in August and four were forced out by scandals.

California companies saw the highest number of CEO changes last month with 17. For the year to date, 135 California-based CEOs have left their jobs, up from 131 in the same period last year. Twelve companies in Texas also saw CEO departures last month.

U.S. employers announced 115,762 job cuts in August, a decline of 56% from July’s total of 262,649 job losses, according to Challenger, Gray’s monthly report on job cuts. In August, COVID-19 was named as the cause of 8,490 job cuts, while another 29,982 were attributed to lack of demand and nearly 45,000 were the result of voluntary severance or buyouts. For the year to date, the coronavirus pandemic is responsible for nearly 1.1 million job losses.

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