April 2020 CEO Turnover Report: CEO Movement Plummets During COVID Uncertainty
Chief Executive Officer turnover plunged to 48 exits in April, the lowest monthly total since 46 departures were recorded in November 2004, according to a report released Wednesday by global outplacement and business and executive coaching firm Challenger, Gray & Christmas, Inc.
April's total is 51% lower than the 97 CEO exits that were tracked in April 2019 and 49% lower than the 94 who left their posts in March. So far this year, 489 chief executives have left their posts, 4.7% lower than the 513 CEO changes tracked between January 2019 and April 2019.
"CEO turnover was at record highs last year, and January saw the most CEO exits in a single month ever recorded. The volatility in CEO movement reflects the volatility we are seeing in the job market overall," said Andrew Challenger, Senior Vice President of Challenger, Gray & Christmas, Inc.
Last month's total was led by the Technology sector, which saw nine chief executive replacements in April for a total of 67 for the year, leading all sectors in CEO turnover. That is 49% higher than the 45 CEO changes tracked through the same period last year.
"The Tech sector is not immune to the current crisis, but it does continue to see strong hiring prospects, especially for the more established companies. Start-ups are having a more difficult time securing funding, and new leadership may be needed during this uncertain time," said Challenger.
Another six CEOs left Government/Non-Profit entities in April for a total of 78 in 2020. These include charities, foundations, and government-run entities such as transportation authorities or public education. That is 32% lower than the 114 CEO exits recorded in this sector through April last year.
Four CEOs left Entertainment/Leisure companies, which have been the hardest hit by COVID-19 thus far. Thirty-two CEOs have left companies in this industry, 78% higher than the 18 who left Entertainment/Leisure companies through April 2019.
"The damage COVID-19 is doing to the economy has begun to spread beyond the initial shock due to the shutdowns. We'll likely see a second wave of layoffs, but it is far from certain how the economy will react. Companies appear to be holding on to their leaders right now to weather the current storm, at least for the short term," said Challenger.
While CEOs are retaining their jobs, many high-profile CEOs are reportedly taking no or reduced salaries during this time. These include the leaders of Airbnb, which recently announced it would lay off 1,900 workers. The CEOs of General Electric and GE Aviation also took reduced pay amid furloughs and layoffs.
"This move is largely symbolic, but is an effort to show solidarity with rank-and-file employees who may be currently furloughed or laid off," said Challenger.
The majority of CEOs (120) "stepped down" this year, meaning they will stay with the company in some capacity, usually as a Board Member or Chairperson. Another 105 retired from their positions. Seventy reportedly resigned from their positions, while 55 saw their interim periods end.
After three months of ten-plus years of average tenure for exiting CEOs, April's tenure fell to 6.8 years. That equals the previous lowest average tenure recorded in July 2012.
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