CEO turnover in US companies rose by 14 percent in January compared to 2024.
While the 222 CEOs to leave in January was a 3% drop compared to the 230 in December, there is still a substantial year-on-year rise, according to a report by Challenger, Gray & Christmas.
January’s total marks the highest CEO turnover for the month since the firm began tracking data in 2002. The previous January record was set in 2020 with 219 CEO departures.
Andrew Challenger, Senior Vice President at Challenger, Gray & Christmas, said:
“Due to ongoing political and economic uncertainty, many companies may find now to be a prudent time to change leadership.”
Women in CEO Roles Declining
- The percentage of new CEOs who are women dropped to 26% in January, down from 28% in 2024.
- Women accounted for 28% of outgoing CEOs in January, and 55% of them were replaced by men.
- Of the 160 men who exited CEO positions, 18% were succeeded by women.
- Interim leadership appointments rose significantly, with 19% of new CEOs named on an interim basis, compared to just 6% in January 2024.
Challenger said:
“Companies are grappling with the actions of a new administration that is cutting federal spending and eliminating contracts while market fluctuations and new technologies continue to roil company plans.
“It makes sense to name someone on a temporary basis, but that comes with steep costs.”
Industries Experiencing the Most Turnover
- Government/Non-Profit: 51 CEO exits in January, down from 55 in December but up from 48 in January 2024.
- Healthcare/Products: 18 CEO departures, a sharp drop from 47 in December.
- Hospitals, however, saw an increase, with 10 exits compared to 3 in December.
- Technology: 25 CEO exits, up from 18 in December, reflecting continued volatility in the sector.
- Entertainment/Leisure: 16 CEO departures, the same as December, but double the 8 exits from January 2024.
- Financial Sector: 15 CEO departures, up from 8 in December and 9 in January 2024.
- Construction: 9 CEO changes, marking a 125% rise from January 2024.
- Energy: 4 CEO exits, down from 6 in December but double the 2 recorded a year ago.
- Retail: 5 CEO departures, up from 3 in December but lower than the 6 exits recorded in January 2024.
- Other notable trends:
- Automotive: 3 CEO exits, up from 2 in December and none in January 2024.
- Pharmaceutical: 6 CEO departures, unchanged from December but down from 9 a year ago.
- Real Estate: 5 exits, slightly down from 6 in December but significantly higher than the 1 reported in January 2024.
- Services: 11 CEO changes, down from 14 in December but up from 10 in January 2024.
Regional Trends in CEO Departures
- West Region: 72 CEO exits, up 12.5% from 64 a year ago.
- California led with 23 exits, up 15% from 2024.
- Texas saw 21 transitions, a 31.3% rise from the previous year.
- South Region: 48 CEO departures, a 2.1% increase from January 2024.
- Florida led with 13 exits but saw an 18.8% decline from the prior year.
- East Region: 57 CEO changes, a 21.3% increase from January 2024.
- Pennsylvania saw the biggest increase, doubling from 8 to 16 CEO departures.
- Midwest Region: 47 CEO exits, a 30.6% rise from January 2024.
- Illinois led the region with 8 CEO changes, up 33.3%.
Why Are CEOs Leaving?
- Stepping Down: 90 CEOs left their positions, a 32.4% increase from December.
- Retirement: 62 CEOs exited due to retirement, unchanged from December.
- No Reason Given: 22 CEO departures, a sharp 46.3% decline from December.
- New Opportunities: 17 exits, down from 22 in December.
- Resignation: 16 departures, a slight decrease from 19 in the previous month.
- Interim Period Over: 6 CEOs left their posts after serving temporarily.
- Other reasons:
- Acquisition/Merger: 2 exits (-50%).
- Personal Reasons: 1 exit (unchanged).
- Death: 1 exit (-66.7%).
- Allegations of Misconduct: 1 exit (unchanged).
- Differences With Board: 1 exit (newly reported).
- Terminated: 1 exit (-50%).
- Loss of Contract: 1 exit (newly reported).
- Relocation: 1 exit (newly reported).
A Changing Leadership Landscape
With economic uncertainty, shifting policies, and new technologies disrupting industries, companies are making strategic leadership changes.
The rise in interim appointments and the decline in female CEO placements highlight key challenges ahead. Organizations are urged to refine succession plans to ensure stability in the evolving corporate landscape.
FAQs
US CEOs are often criticized for being overpaid, with compensation packages that far exceed those of average workers.
In 2023, the median pay for S&P 500 CEOs was around $14.5 million, while the median worker salary was roughly $77,000.
This disparity has widened over decades, with CEO pay growing at a much faster rate than wages for regular employees.
Defenders argue that high salaries reflect performance, responsibility, and shareholder value, but critics say executive pay is often detached from actual company success.
Stock options and bonuses, which form a large part of CEO compensation, sometimes encourage short-term decision-making rather than long-term stability.
Government intervention, such as tax penalties or pay ratio disclosure rules, has attempted to address the issue, but executive pay remains largely unchecked.
While CEOs play a crucial role, their pay often raises ethical and economic concerns about corporate inequality and income distribution in the US.
In 2024, CEO turnover in the United States reached unprecedented levels.
According to data from Challenger, Gray & Christmas, 1,991 CEOs stepped down by November, surpassing the previous record of 1,914 set in 2023. This surge represents a 16% increase compared to the same period in 2023.
The government and non-profit sector experienced the highest number of departures, totaling 438, followed by the medical products, technology, entertainment and leisure, and finance industries.
Geographically, California led with 223 CEO resignations, followed by New York, Texas, and Florida. Common reasons for these exits include retirement, pursuit of new opportunities, and internal role changes.
Notable departures include leaders from major corporations such as Intel, Boeing, and Nike.
This trend reflects the increasing pressures and evolving challenges faced by top executives in today’s dynamic business environment.
The record-breaking number of CEO resignations in 2024 was driven by several key factors.
One major reason is the increasing pressure from stakeholders, including investors and board members, who expect strong financial performance amid economic uncertainty.
Many CEOs are struggling to navigate high interest rates, inflation, and shifting consumer behavior, leading some to step aside rather than risk a prolonged downturn.
Another factor is the growing emphasis on corporate accountability and ethical leadership. Scandals, governance failures, and ESG (Environmental, Social, and Governance) expectations have placed leaders under intense scrutiny, making the job more stressful than ever.
Additionally, many long-serving CEOs are retiring after the pandemic delayed their departure plans. Leadership transitions are also being influenced by technological disruption, with boards seeking fresh perspectives to handle AI, automation, and digital transformation.
With these challenges mounting, CEO turnover is expected to remain high as companies look for new leadership strategies.
US CEOs receive high compensation due to a mix of competitive market forces, corporate governance structures, and performance-based incentives.
Boards justify these massive pay packages by arguing that top executives must attract investment, drive innovation, and manage complex global operations.
Many CEO salaries are tied to stock performance, with bonuses and equity incentives making up the bulk of their earnings.
This aligns their interests with shareholders but also encourages short-term stock price boosts rather than long-term stability.
Another factor is the influence of compensation consultants, who benchmark pay against other executives, creating a cycle of ever-increasing salaries.
Additionally, CEOs often negotiate golden parachutes and lucrative severance deals, ensuring massive payouts even if they fail.
Unlike in many other countries, US corporate governance structures grant boards significant discretion in setting CEO pay, often with limited shareholder intervention.
Without stricter regulation, executive pay will likely remain at these elevated levels.
