Nearly 2,000 American CEOs Quit in 2024, Setting New Record

Patrick Gelsinger, chief executive officer of Intel Corp., speaks during a panel session on day three of the World Economic Forum (WEF) in Davos, Switzerland, on Wednesday, May 25, 2022. The annual Davos gathering of political leaders, top executives and celebrities runs from May 22 to 26. Photographer: Hollie Adams/Bloomberg via Getty Images

Chief executive officers have exited from U.S. companies in 2024 at a greater pace than ever before, with businesses increasingly opting to appoint interim leaders as replacements, according to global outplacement company Challenger, Gray & Christmas, Inc.

As of November, 1,991 CEOs have departed from their companies, “the highest total on record,” according to a Dec. 20 report from the company. “It has surpassed the previous record of 1,914 CEO exits that occurred in all of 2023. It is up 16% from the 1,710 exits that occurred during the same period last year.”

Amid a jump in executive departures, companies were found to be appointing more interim leaders. Last year, interim replacements for CEOs were at seven percent, this year it has gone up to 13 percent.

“The current landscape has a lot of uncertainty baked in, and companies are responding by putting temporary leaders in place. This can act as a trial run to see how the leader navigates current challenges,” Challenger, Gray & Christmas Senior Vice President Andrew Challenger said. “It’s much less disruptive to replace an interim head if things do not appear to be working out, not only the company and its employees, but also to analysts and shareholders.”

Entities in the government/non-profit sector saw the highest number of exits year-to-date at 438 departures, followed by health care/products, technology, entertainment/leisure, financial, services, and hospitals.

State-wise, California topped the list with 223 CEOs departing, followed by New York, Texas, and Florida.

Besides stepping down, some of the top reasons executives gave for leaving their positions included retirement, pursuing new opportunities, or transitioning to a different position within the company.

Back in September, Andrew Challenger suggested that economic changes were a key factor for the rising number of exits.

“Economic uncertainty tends to drive leadership decisions and several indicators suggest not only is the labor marketing softening, but the market overall may be heading for a downturn,” he said. “Companies are cutting costs across the board, as well as pivoting to new procedures, operations, and in some cases products, in light of new technologies. It’s an ideal time for new leaders to ascend.”

Resignations, Internal Appointments

The Challenger report comes as Pat Gelsinger, the chief executive of Intel, resigned from his post earlier this month after leading the tech giant for four years.

Under his tenure, the company saw several quarters of revenue declines as well as net losses. Intel also failed to create any significant impact in the AI chip space during these years. Following Gelsinger’s exit from the company, Intel’s shares surged.

Earlier in March, Boeing CEO Dave Calhoun stepped down after the company got entangled in a scandal over quality issues.

A door panel of a Boeing plane blew off mid-air during a flight in January, triggering concerns about safety regulations followed by the company. This also attracted increased government scrutiny. In addition to Calhoun, two more senior Boeing executives resigned from their posts at the time.

In January, Stellantis CEO Carlos Tavares left his post following disappointing sales numbers in North America.

According to a report by leadership advisory company Russell Reynolds Associates, more companies are appointing CEOs from within their business than from outside. The report analyzed data from leading global stock indexes.

“Globally, of the 178 CEOs appointed in 2023, 77 percent were internal hires,” it said while adding that such appointments had hit an “all-time high” last year.

The trend is driven by several factors, including views that an internal candidate is lower risk and lower cost and that such promotions are “more likely to inspire and encourage current staff.”

“Additionally, boards want to send a message that they have been doing their job by constantly and effectively planning for successions. This means unplanned emergencies as well as systemic future planning have been effectively prepared for.”

Internally appointed executives were found to have served 1.4 years longer on average. In addition, external hires were more likely to be fired from their posts, the report said.