2020 CEO Turnover Puts Highest-Ever Percentage of Women in Top Job

Some 1,314 corporate CEOs left their jobs in 2020, a decline of nearly 20% compared to the number of CEOs who departed in 2019. Even though the total is lower year over year, the percentage of new CEOs who were women replacing men reached a 10-year high of just over 16%.

According to outplacement firm Challenger, Gray & Christmas, companies named 1,172 permanent CEOs last year. Of those replacements, 266 were either women replacing other women (78) or women replacing men (188). In 2019, 119 new women CEOs replaced other women and 189 women replaced men.

The number of U.S. CEOs who lost or left their jobs in December fell by 12.7% month over month, from 110 in November to 96. The December total represents a year-over-year drop for the month of 40%. In December of 2019, 160 CEOs left their positions.

In all of 2019, a total of 1,640 CEOs left their jobs, a rise of nearly 13% from the prior year’s 1,452. Of the 2019 total, three were due to allegations of sexual misconduct. In 2018, 11 CEOs left their jobs following allegations of sexual misconduct.

Last year’s CEO turnover was highest in the government/nonprofit sector with 237 CEO departures, a decline of 30% compared with the 2019 total of 339. Tech sector CEOs experienced the second-highest number of departures with 216 in 2019. CEOs of health care and health product makers posted the third-highest departure total with 130, up by 21% from the 2019 total of 107.

Health care companies (excluding hospitals) experienced the greatest number of CEO changes last month with 17. That brings the total for health care firms to 123 for the year, an increase of 22% from the first 11 months of 2019. Among hospitals, seven CEOs left their jobs in December, bringing the year-to-date total to 97, a decline of nearly 8% year over year.

Andrew Challenger, vice-president of Challenger, Gray, commented: “The Recession created by the pandemic and uncertainty surrounding some of the policies of the current administration kept many companies from making major leadership changes in 2020. This is directly counter to how CEO movement has occurred during Recessions and economic downturns in the past.”

Of the CEOs who departed in December, 20 retired and 11 found new opportunities. According to Challenger data, stepping down into a different role within the company was the most frequent reason for a CEO departure in December. A total of 28 CEOs stepped down last month.

For the full year, 352 CEOs stepped down and 295 retired. A total of eight were terminated and four left following allegations of racism or other issues surrounding race, while three departed following allegations of professional misconduct. One CEO left following allegations of sexual misconduct.

The average age of a departing CEO in December was 55 years, compared to an average age of 57.2 among 2019’s departing chiefs. The average tenure of these CEOs was 9.9 years last month compared with 11.5 years in December 2019.

The number of departing CEOs who were replaced by outsiders in 2020 fell from 784 in 2019 to 636.

California companies saw the highest number of CEO changes last month with 12. For all of 2020, 186 California-based CEOs left their jobs, down from 219 in 2019. Ten companies in Texas and seven in Virginia also saw CEO departures last month.

Earlier this month, Challenger, Gray announced that job losses in December increased by 135% year over year to 77,030 and were 19% higher than the cuts announced in November 2020. In all of last year, more than 2.3 million job cuts were announced, nearly four times the cuts announced in 2019. A total of 1.96 million job cuts were announced in 2019.

On Thursday, the Bureau of Labor Statistics is expected to report 790,000 new claims for unemployment benefits. That is about flat with last week’s 787,000 initial claims for benefits.

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