CEO Departures at U.S. Companies Hit a Record This Year

CEO Turnover Reaches Record High in 2024

U.S. public companies announced 327 chief executive changes this year through November, according to outplacement firm Challenger, Gray & Christmas. This marks more than in any other year since at least 2010, when the firm first started tracking the turnover. It’s also an 8.6% increase from last year.

Turnover included CEOs at U.S. companies that have long dominated their industries — like Boeing, Nike, and Starbucks. The pace of change points to those companies’ customers, investors, hedge funds or boards growing impatient with sales slumps or strategic missteps in an otherwise strong economy when consumers proved they were willing to spend.

CEO Changes: A Sign of Impatience

The cost of capital, the speed of transformation, is creating faster turnover, said Clarke Murphy, managing director and former chief executive of Russell Reynolds Associates, a leadership advisory firm. Murphy said it was easier to stand out for poor performance in an otherwise strong market.

"In years of 20-plus-percent S&P [500] returns two years in a row, any company that’s significantly underperforming, the spotlight has been on, and boards of directors moved faster than they might have moved five or seven years ago," Murphy said.

Major U.S. CEO Changes

Here are some of the major U.S. CEO changes so far this year:

Intel

The semiconductor company ousted CEO Pat Gelsinger earlier this month, nearly four years after he was appointed to turn the chipmaker around and better compete with rivals. Intel’s stock price and market share had collapsed as the artificial intelligence wave boosted chipmaker Nvidia while Intel struggled to crack into the business. A successor hasn’t yet been named.

Boeing

The aerospace giant announced former CEO Dave Calhoun’s departure in March, part of a broad executive shake-up. It came nearly three months after an unsecured door plug blew off midair from a nearly new Boeing 737 Max 9 operated by Alaska Airlines, plunging the company back into a safety crisis after years of problems across its defense and commercial aerospace business, frustrating the leaders of some of its biggest airline customers. Calhoun himself was appointed in the last days of 2019 to succeed ex-CEO Dennis Muilenburg, who was ousted for his handling of the aftermath of two fatal crashes of Boeing’s 737 Max in 2018 and 2019.

Starbucks

With sales shrinking in its biggest markets, Starbucks poached Chipotle Mexican Grill star CEO Brian Niccol to turn around the coffee chain’s fortunes, replacing Laxman Narasimhan. The company’s shares soared nearly 25% when Niccol’s appointment was announced in August.

Nike

The shoemaker replaced CEO John Donahoe in September with Elliott Hill, a company veteran who started as an intern at Nike in the 1980s. Donahue had helped Nike grow sales since he took the helm, from $39.1 billion in fiscal 2019 to $51.4 billion in fiscal 2024, but growth eventually stagnated after he moved away from wholesale partners like Foot Locker and Macy’s and lost sight of innovation.

Peloton

A darling of the pandemic, the home fitness equipment company had struggled since return-to-office mandates started rolling in. In 2022, Peloton brought in former Spotify and Netflix executive Barry McCarthy to take over for founder John Foley, but he stepped down in May after the company announced yet another restructuring. In October, Peloton announced Peter Stern, a former Ford executive and Apple Fitness+ co-founder as its third CEO. Stern has a background in growing subscription-based services, and Wall Street is hopeful he’ll bring Peloton to profitability by cutting costs and focusing on its high-margin subscription revenue.

Kohl’s

Kohl’s CEO Tom Kingsbury is stepping down on Jan. 15, the off-mall department store said late last month, and he will be succeeded by Ashley Buchanan from crafting mecca Michaels. Kohl’s has seen its comparable store sales, a key metric for retailers, drop in each of the past 11 quarters, and its stock price slumped.

WW International

The weight loss company formerly known as Weight Watchers announced in September that CEO Sima Sistani would step down immediately. WW International has struggled, with shares falling more than 80% this year. It tired to reorient itself under Sistani’s tenure to include a platform that links customers with popular weight loss drugs.

Conclusion

The pace of CEO turnover is accelerating, driven by the cost of capital, the speed of transformation, and the pressure to deliver results in an otherwise strong economy. As companies face challenges in an increasingly competitive landscape, boards of directors are holding CEOs accountable for underperformance.

FAQs

Q: Why is CEO turnover increasing?
A: CEO turnover is increasing due to the cost of capital, the speed of transformation, and the pressure to deliver results in an otherwise strong economy.

Q: Which industries are most affected by CEO turnover?
A: Consumer-focused companies, which are more susceptible to changing tastes and trends, are generally more affected by CEO turnover than industries like oil and gas or utilities, which tend to have internal and longer-tenured CEOs.

Q: What are the consequences of CEO turnover?
A: CEO turnover can have significant consequences, including disruption to the company’s strategy, loss of key talent, and a potential impact on the company’s stock price.