CEO Departures Have Reached a Record High with Almost 2,000

The Daily Upside ^ | 12/23/2024 | Griffin Kelly

[T.B. Yoits]

The nameplates on CEO offices are changing at what appears to be an historic pace.

In the first 11 months of the year, 1,991 CEOs announced their departures, according to a report from outplacement firm Challenger, Gray & Christmas. That’s up 16% compared with the same timeframe last year and the highest tally on record since the firm began tracking CEO changes in 2002.

This year’s high-profile breakups included Nike and John Donahoe, Intel and Pat Gelsinger, and Boeing and Dave Calhoun. With the economy going strong, the stock market on a two-year bull run, and consumer spending trending upward, corporate boards are demanding more from their CEOs and — in some cases — ditching them faster than ever. “The spotlight has been on, and boards of directors moved faster than they might have moved five or seven years ago,” Clarke Murphy, of Russell Reynolds Associates, told CNBC.

However, not every departure was the result of boards and investors at their wits’ end:

-Retirement, the third most common reason for CEO departures, accounts for 445 exits, according to the firm. Leaving for new opportunities accounted for 148 CEO departures.

-Companies in the government/non-profit sector led in CEO transitions with 438 exits, while retail was at the lower end of the spectrum with just 37 CEO exits.

Temporary Solution: The strategy of appointing an interim CEO has become a little more popular in 2024. This year, 13% of all replacements were named on an interim basis, compared with 7% of all incoming CEOs in 2023, the study found.

“It’s much less disruptive to replace an interim head if things do not appear to be working out, not only to the company and its employees, but also to analysts and shareholders,” said Andrew Challenger, Senior Vice President for Challenger, Gray & Christmas.

[mewzilla]

The top executives are bad.

The boards are worse.

And the people who put those boards in place...

Funny we never hear any complaints about the last two.

[Leaning Right]

You’re right. A CEO cannot loot a company without the board’s permission. I guess that’s a case of one hand washing the other.

As to who puts the boards in place… that’s a lost cause. I hold a few shares in a few companies. And I used to vote in the board elections.

Then I realized I was voting my 20 shares along with mutual fund companies that were voting in 1,000,000 share blocks. And the current boards always got 95%+ approval.

So eh, what’s the use?

[FreedomPoster]

Speaking of the government, diversity.defense.gov is GONE, redirects to a general military HR page.

It was alive a month ago.

https://web.archive.org/web/20241119201127/https://diversity.defense.gov/

Gee, what changed?

[DoodleBob]

Across my career I’ve worked for a number of CEOs and C-suite leaders, sometimes up close and personal.

In my own job I’ve interacted with them.

To be sure, some of them were zeros, to the point where other execs would openly but subtly call out their idiocy. That lot rarely lasted 2 years.

The really solid CEOs that I saw in person, and in action, earned their millions. They go in TV, often Fox Business and answer questions from the press, have countless internal meetings (often where the committee distributes pointless PowerPoint decks of 217 pages of CYA) where they zero in on the problems and opportunities and challenge the businesses and staff - and are often right - absorb feedback, travel the footprint and meet employees, deal with regulators/the govt, chair investor calls, so on.

Yeah, they’re not doing gritty jobs. But they also aren’t losers. Usually.

It’s easy to make fun of them, call them stupid, and so on, like you often hear from left-wingers, since that lot doesn’t get basic economics, finance, capitalism, or life. However, I’ve seen a bit of that class envy and hatred creep into Conservative, Inc. over the years….I think it started with Willard becoming the Prez candidate, but it accelerated with corporations becoming quasi-social justice enterprises.

And I get it….cronyism isn’t capitalism. And corporations aren’t ipso facto capitalist. But the free market is preferable to the alternatives.

The trough of this cesspool of envy was the delight expressed at the assassination of US Healthcare’s CEO. Even a few on FR cheered. Marx and Engles are laughing in hell.

Again, some firms are run by dolts. But most folks who joke about CEOs would collapse into a puddle of tears if they shouldered the burdens of these leaders.

[The Louiswu]

Going Galt

[T.B. Yoits]

As you point out, some terrible CEOs last two years in the job. That sends a clear message to those in the reporting chain that maybe it’s not worth climbing a ladder and getting closer to a board that would keep an incompetent CEO in place because they are unwilling or unable to replace them.

[MulberryDraw]

How many were seen at diddy-type parties and now trying to get out?

[rb22982]

If index and ETFs funds were required to let the owners vote instead of allowing the management firm (Vanguard, blackrock, state street, etc), retail investors would control nearly 50% of the vote.

[rb22982]

For some that was the lesson, but the stimulus $ actually caused a ton of people to go wild on spending, hence why GDP is up quite a bit from pre-pandemic.

That said, what you said is the right way to do it - the rub is getting to $2M for most folks. Hard to do if you make less than $100K a year - not impossible by any stretch but hard and will take a long while.

[Lazamataz]

I don’t disagree. A good CEO is worth every penny of the millions.

[rb22982]

Yes, as someone who deals with the BoD a lot, they deserve a lot of the blame. Frankly, smaller boards (5-6 people) with more direct oversight and accountability would be better for most companies. When you have 10-14 Board members, its easy to have no accountability and end up with 15 opinions about strategy.

[SaxxonWoods]

“But most folks who joke about CEOs would collapse into a puddle of tears if they shouldered the burdens of these leaders.”

People who could never do those jobs, who will never get close to those jobs will insist the people doing them are idiots. The oldest story in business.

[Leaning Right]

I won’t disagree with anything you said there. And I’m about as pro-business as you can get. But I must add a bit of balance here.

For decades the average CEO made something like 30 or 40 times the salary of the average worker in the company. Fair enough, as the CEO’s responsibilities are much greater.

But now that multiple is around 300. Sure, today’s CEO has even more responsibilities than before. I can’t help but to feel that there’s a bit of greed going on here - greed that wasn’t present in a more responsible past.

I’m not calling for a revolution, or anything like that. I’m just making an observation. Companies can pay their CEOs whatever they want.

[FrankRizzo890]

CEOs might leave the job somewhere, but they usually land in the same or similar job somewhere else. We used to call it the CEO mortgage protection game.

[Ikeon]

The stimulus sold a lot of cars people would not have bought before.

The big 3 were to blinded to see what was on the other side. Cars lots full of cars that aren't selling..

used car prices are slowly coming down, but it seems a lot of people still want top dollar for their car they can't afford or realize that they now need money because the govt ain't giving it away anymore.

[T.B. Yoits]

People who could never do those jobs, who will never get close to those jobs will insist the people doing them are idiots. The oldest story in business.

Or that they're simply criminals.

-Allen Stanford (Stanford International Bank)
-Bernard Ebbers (WorldCom)
-Bernard Madoff (Bernard L. Madoff Investment Securities)
-Dennis Kozlowski (Tyco)
-Eddie Antar (Crazy Eddie)
-Elizabeth Holmes (Theranos)
-Jeffrey Skilling (Enron)
-Jonathan Rigas (Adelphia)
-Joseph Nacchio (Qwest)
-Martha Stewart (Martha Stewart Living Omnimedia)
-Martin L. Grass (Rite-Aid)
-Martin Shkreli (MSMB Healthcare)
-Rajat Gupta (McKinsey & Company)
-Rebekah Brooks (News International)
-Richard Scrushy (HealthSouth)
-Samuel Bankman-Fried (FTX)
-Samuel D. Waksal (ImClone Systems)
-Sanjay Kumar (Computer Associates)
-Walter Forbes (Cendant)

[rbg81]

Their current CEO of Starbucks coffee is commuting by corporate jet from Newport Beach California to Seattle. Such a remote trend is increasing as talented individuals have more options.

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Even with a “corporate jet”, its still a commute. You avoid most the airport hassle, but you’re still in the air for 2 hours one way.