Surge in CEO Departures: Median Tenure of CEOs at S&P 500 Companies Decreasing to 4.8 Years

A wave of high-profile CEO departures is sweeping through major companies. Boeing’s Dave Calhoun, who became well-known during the 737 Max crisis, is set to exit the company by the end of the year. Additionally, Chairman Larry Kellner will not seek reelection, and Stan Deal, CEO of Boeing’s commercial airplanes division, is also leaving.

The retail sector is experiencing similar changes. Gap welcomed a new CEO, Richard Dickson, in 2023, while Macy’s saw its CEO, Jeff Gennette, step down in March, handing the reins to Tony Spring.

Executive search firm Cowen Partners highlights the new challenges facing CEOs. They must navigate inflation, supply chain issues, rapidly changing technology, and a workforce that includes remote employees unfamiliar with the corporate culture. Additionally, there is increasing pressure to address environmental, social, and governance (ESG) concerns. These factors contribute to CEO burnout, with the median tenure of CEOs at S&P 500 companies decreasing from six years in 2013 to 4.8 years in 2022, according to executive consultancy Equilar.

These departures are part of a broader trend. Outplacement firm Challenger, Gray & Christmas reported that 622 CEOs announced their resignation in the first quarter of 2024, marking the highest quarterly total on record. This figure represents a 50% increase compared to the first quarter of the previous year, which was already a record-breaking year. According to executive search firm Russell Reynolds, 1,914 American CEOs left their positions in 2023, a 55% increase from 2022.

The evolving business landscape plays a significant role in this turnover. During crises like the Covid-19 pandemic, boards tend to favor familiar leadership. However, as crises subside, boards become more demanding and willing to take risks, increasing the likelihood of CEO replacements.

Also, many baby boomers are retiring, accounting for 21% of all CEO departures. Additionally, female CEOs are leaving at higher rates, with 20% of departing CEOs being women who cited a lack of support, flexibility, and resources as their reasons for stepping down.

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