The number of U.S. chief executive officers who lost or left their jobs in July soared by 25% compared to the June total. Last month, 124 CEOs left their jobs, compared to 99 who left in June. Year over year, CEO turnover has increased by 17% from 725 last year to 850 in the first seven months of 2019. The year-to-date total marks the highest since 2002, when outplacement firm Challenger, Gray & Christmas began tracking CEO departures.
The July total was 32% higher than 94 CEOs who left their jobs in July of 2018, and it was the sixth month so far in 2019 when year-over-year departures were higher.
These CEOs are, in many cases, leaving behind multi-million dollar compensation packages. There are dozens of U.S. CEOs who earn more than $10 million in annual compensation. These are the highest paid CEOs at America’s largest companies.
The 2018 fourth-quarter total of 429 departing CEOs was also the highest quarterly total in the history of the report. A total of 1,452 CEOs left their jobs in 2018, the second-highest total ever. In all of 2017, some 1,160 CEOs left their jobs, down 7% from the prior year’s total of 1,248.
Vice President Andrew Challenger said, “The uncertainty surrounding newly announced tariffs and the dive in value of Chinese currency, how the market will react to the Fed’s decision to cut rates, the current softness in the manufacturing sector – all these issues are being felt at companies across the United States.”
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Last week, the firm reported that job cuts through July were 43% higher than in the same period last year and the highest total in five years. The cuts are not evenly distributed among all careers, though. These are the fields with the best and worst job security.
Of the CEOs who left in July, 47 stepped down, 31 retired and 15 took new positions with another company. Challenger noted that no CEO left due to sexual or professional misconduct allegations. No CEOs were involuntarily terminated last month.
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The government/nonprofit sector saw 21 CEO changes again in July, bringing the seven-month total to 188, the most of any Challenger category and a 30% year-over-year increase. Financial sector CEO departures in the first seven months of 2019 increased by seven in July to 71, and the number of tech industry CEOs who have departed this year has risen by 16 to 107. Health care industry CEO departures came to 75 for the year to date and are 2.7% higher than in the first seven months of last year.
The average age of a departing CEO in June was 59.2 years, compared to an average age of 63.0 among July 2018’s departing chiefs. The average tenure of these CEOs was 9.0 years last month, compared with 10.1 years in July 2018.
The following chart from Challenger’s report shows CEO departures by month from January 2010 to July 2019.
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