May CEO Departures Hit All-Time High; One Replaced by AI

Companies and Brands

Published: June 22, 2023 11:12 am

Outplacement firm Challenger, Gray & Christmas reported Thursday morning that the number of CEO departures in May reached the highest single-month total since the company began tracking the data in 2002. (These 19 executives pay themselves more than $150 million a year.)

The number of departures in May totaled 224, up from 114 in April and up from 150 in May 2002. Last month’s total displaced January 2020’s previous record total of 219 departures.
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And we all remember what else happened then. Senior Vice President Andrew Challenger commented:

It is certainly significant that so many CEOs are leaving, especially since the last time we saw numbers this high was just prior to Covid-19 lockdowns. Certainly, companies are dealing with some uncertainty heading into the second half of the year surrounding recession concerns, disruptive technology, and high interest rates.

For the year to date, 789 CEOs have left their positions for one reason or another. In 2022, the total for the same five months was 668.

Departures were highest in the government/nonprofit sector, where 58 CEOs left. Twenty-one tech CEOs left their jobs, the second-highest total, while health care and hospital each saw 18 departures.

No reason was given for 84 of May’s departures, 51 CEOs retired, 24 stepped down and 23 resigned. Three were fired, and four left as the result of an acquisition or merger.

Perhaps the most interesting change was one CEO replaced by artificial intelligence. Challenger, Gray does not name the company, but it is worth noting that China-based gaming company NetDragon Websoft appointed an AI robot it calls Tang Yu as its CEO last August. Legal software company Logikcull CEO and co-founder Andy Wilson has said he will replace himself with an AI bot named Andy Woofson by 2024.

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According to a March report in The Hustle, Tang Yu works 24/7 and earns $0 salary. Between August and March, NetDragon’s share price had risen more than 18% in Hong Kong.

CEOs would do well to keep in mind that one average chief executive salary of around $16 million is equal to the average salary of 399 average workers. Overpaid executives like Amazon’s Andy Jassey ($213 million in 2021) make as much as nearly 6,500 average workers.

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