High-profile CEOs are heading to the exit door. At Boeing, Dave Calhoun, infamous for his entanglement in the 737 Max crisis, will leave the aeronautics giant at the end of the year. Meanwhile, Chairman Larry Kellner will not stand for reelection, and Stan Deal, the CEO of the commercial airplanes division, is out.
Clothing retailer Gap is also freshening up. Its new CEO, Richard Dickson, arrived in 2023. At one of its department store competitors, Macy’s CEO Jeff Gennette handed over the keys to Tony Spring in March.
Those departing executives are not outliers. According to outplacement firm Challenger, Gray & Christmas, 622 CEOs announced during the first quarter of 2024 that they would soon quit. It was the highest quarterly total on record. The number of executives leaving increased by 50% compared to the first quarter of last year, and 2023 was already a record year. The executive search firm Russell Reynolds calculated that 1,914 American CEOs left last year, a 55% increase compared with 2022.
Why are they heading for the exit? Many baby boomers are simply retiring: 21% of all departures are justified by old age. Furthermore, women leave relatively more frequently than their male counterparts. Of the departing CEOs, 20% were women who didn’t feel supported, saying they suffered from a lack of flexibility and not enough resources.
Growing challenges may also explain this executive turnover. During turmoil such as the Covid-19 pandemic, board directors tend to favor a well-known existing CEO. When the crisis diminishes, directors become bolder and more demanding, thus riskier for CEOs, who could lose their position.
Executive search firm Cowen Partners underlines the new challenges. The top honcho must deal with inflation, supply chain disruptions, ever-evolving technology tools, partly remote employees unfamiliar with the corporate culture, customers interested in environmental, social and governance scores and a growing to-do list. CEOs could suffer burnout. According to executive consultancy Equilar, the median tenure among CEOs of S&P 500 companies is shrinking. It was six years in 2013 and 4.8 years in 2022.