Senior executives head for the exit. At Boeing, Dave Calhoun, infamous for his role in the 737 Max crisis, will leave the aviation giant at the end of the year. Meanwhile, Chairman Larry Kellner will not stand for re-election and Stan Deal, CEO of the company’s commercial aircraft division, has been fired.
Clothing retailer Gap is also reinventing itself. Its new CEO, Richard Dixon, arrived at the company in 2023. At one of Macy’s rival department stores in March, Macy’s CEO Jeff Gennette handed over the keys to Tony Spring.
These departing executives are no exception. In the first quarter of 2024, 622 CEOs announced they were leaving soon, according to recruiting firm Challenger, Gray & Christmas. This was the highest quarterly figure ever. The number of executive departures is up 50% from the first quarter of last year, and 2023 is already a record year. Executive search firm Russell Reynolds estimates that 1,914 U.S. executives left last year, up 55% from 2022.
Why are they heading towards the exit? Many baby boomers are simply retiring: 21% of all retirements are justified by old age. In addition, women leave comparatively more often than their male counterparts. Of the departing CEOs, 20% were women who felt unsupported, saying they suffered from a lack of flexibility and resources.
Growing problems may also explain this change in leadership. During times of disruption such as the Covid-19 pandemic, boards tend to favor a well-known incumbent CEO. As the crisis eases, directors become bolder and more demanding, and therefore riskier for managers to lose their positions.
Executive search firm Cowen Partners highlights new challenges. The C-suite must deal with inflation, supply chain disruptions, ever-evolving technology tools, partially remote employees unfamiliar with the corporate culture, clients interested in environmental, social and governance performance, and a growing to-do list. Leaders can suffer from burnout. According to consulting firm Equilar, the average tenure of CEOs of S&P 500 companies is shortening. In 2013 it was six years, and in 2022 it is 4.8 years.