More U.S. CEOs exited their companies in 2024 than in any year in more than two decades, with economic and technological factors contributing to the trend, according to a recent report from global outplacement company Challenger, Gray & Christmas, Inc.
Last year, 2,221 CEOs quit their jobs, according to the company’s Jan. 30 report. The number is 16 percent higher than the previous record, which was set in 2023 with 1,914 CEO exits. The company began tracking CEO changes in 2002.
Also in 2024, 143 founders left their CEO roles, far higher than the 29 in the previous year.
The government/nonprofit sector led 2024 in terms of CEO departures, with 493 executives leaving their posts. Health care and technology sectors saw more than 200 CEO exits each, followed by the entertainment/leisure, financial, and services industries sectors, each with more than 100 executives exiting.
“The environment of economic, political, and regulatory uncertainty that prevailed in 2024 certainly led to many CEO exits,” Senior Vice President Andrew Challenger said.
“With that as a backdrop, we also saw rapid technological advancement and boards that were laser focused on efficiency and productivity. If CEOs were perceived to be lacking, they were not tolerated.”
The rapid development and adoption of artificial intelligence and automation contributed to new leadership at many businesses, according to the report.
Some of the major reasons for CEO exits also include retirement, pursuing new opportunities, and resignations.
In September 2024, Challenger called economic changes a key factor for the rising number of CEO exits.
“Companies are cutting costs across the board, as well as pivoting to new procedures, operations, and in some cases products, in light of new technologies. It’s an ideal time for new leaders to ascend,” he said.
The appointment of interim leaders was found to have almost doubled in 2024 compared with the previous year, according to the report, which suggested that this was an indication that companies may not have proper succession plans in place to deal with the exit of their leaders.
Major CEO Exits
The CEOs of several big name brands exited their companies last year. Prominent among them was Boeing CEO Dave Calhoun, who stepped down following intense regulatory scrutiny over the quality of the aircraft manufacturer’s offerings. The door panel of a Boeing 737-9 Max blew off in January 2024, triggering safety concerns.
In December 2024, Pat Gelsinger retired from the post of Intel CEO. His exit came after the company’s revenues saw a steady decline.
Nike CEO John Donahoe stepped down last year after the company faced a turbulent 2024 that saw sales dipping and shares falling. At Starbucks, Laxman Narasimhan exited as CEO after just one year at his job.
Despite the highest CEO exits last year, most executives have an optimistic view of the U.S. economy, according to multiple surveys.
A Jan. 15 survey from executive coaching organization Vistage found that its CEO Confidence Index surged by more than 15 points, signaling an impending growth cycle.
The poll was conducted among 9,811 individuals who are part of chief executive and small business groups in the United States.
Among the respondents, 55 percent said they expect the economy to improve in the year ahead, up from 32 percent in the third quarter of 2024. “CEOs’ optimism about the new administration is key to this change,” the survey report stated.
“Of those expecting conditions to improve, a majority identified the change in the country’s leadership as a driving factor. CEOs expect that pro-business policies, reduced regulations, decreased inflation, and lower borrowing costs will stimulate investments and economic growth among small and midsize businesses.”
A Jan. 7 report from JP Morgan found that almost two-thirds of middle market executives in a survey were optimistic about the U.S. economy this year, which it said was “an extraordinary shift in business sentiment.”
“Almost three-quarters (74 percent) of leaders expect revenues to increase in the coming year, while 65 percent project higher profits. About half (51 percent) plan to expand their workforce, even as 77 percent of businesses report rising costs.”
