Annabelle Chih / Bloomberg / Getty Images
The Key Takeaways
- Intel, Starbucks and Nike have all changed the leadership of their companies this year.
- According to a new study, more than 40 percent of the people who failed to improve their failing companies were replaced.
- This year, CEOs are leaving their jobs for many reasons. These range from poor performance to wanting to change careers to even misconduct.
Does it feel like a storied company’s chief executive officer is leaving their job every day? Not far from the truth.
Intel (INTC), Nike (NKE) and Starbucks (SBUX) are just some of the companies whose leaders have departed this year for reasons from underperformance to misconduct to—as with the CEO of soup and snacks giant Campbell’s (CPB)—a career pivot. The National Football League was the destination in his case.
The number of CEOs leaving the top position has reached a new record. So far in 2024, more than 1,800 CEOs have announced departures, the highest year-to-date total on record since Challenger, Gray & Christmas began tracking such changes in 2002, the outplacement firm said last month.
It’s an increase of 19% compared to the 1,500+ exits made in the same quarter last year.
Boards lose patience with underperformance
The Conference Board reports that boards have become increasingly impatient with CEOs who fail to turn around struggling businesses.
More than 40% of the S&P 500 companies that changed their CEOs this year performed poorly, The Conference Board found in an early November report done in conjunction with recruiting firm Heidrick & Struggles, ESG data analytics firm ESGAUGE, and compensation advisory firm Semler Brossy.
To be exact, 42% of those companies had a total shareholder return that fell below the 25th percentile—up from 30% in 2017. The S&P 500 has also had a strong year, likely casting a brighter light on lagging companies' underperformance.
“It's a clear signal to CEOs: Deliver value or face heightened scrutiny,” Lyndon Taylor, partner at Heidrick & Struggles, said in a statement.
From Intel's Gelsinger to Kohl's Kingsbury, a Long List of CEOs Let Go
It is a long list of CEOs who have been ousted for failing to bring their company back to its former glory.
Intel’s Pat Gelsinger is one of them, because the chipmaker has failed to grasp the AI wave. Dave Calhoun from Boeing (BA), who was unable to save the struggling plane manufacturer, also makes the list.
Retailers who were struggling to compete with online competitors and consumers on a tight budget have been replaced. These include Tom Kingsbury of Kohl’s, Joel Anderson at Five Below (FIVE), and Rick Dreiling from Dollar Tree (DLTR). Dreiling said he would be stepping down because of health concerns.
John Donahoe, the former sneaker king of Nike, could attest that a decline in sales can be due to a lack of cool. Brian Niccol was his replacement. He came from Chipotle, whose successor also came from within the company.
Gelsinger has noted that it can be an a “bittersweet” Experience is important, particularly for those like former Intel Chief, who spent the majority of his career at the chip manufacturer.
Conduct issues affect some CEOs
In the past year, several CEOs have lost their positions due to issues relating to personal relationships and other matters that went against company policy.
Alan Shaw, the CEO of Norfolk Southern (NSC) was terminated in September after an internal investigation found that the executive had violated the company’s policies. “violated company policies by engaging in a consensual relationship” With the legal director of your company.
Dan Arnold, a broker at LPL Financial Holdings (LPLA), was terminated for making unspecified remarks to his employees in violation of the Broker’s Code. “commitment to a respectful workplace.”
According to tracking from Challenger, in 2024 through October, seven CEOs left due to allegations of professional and sexual misconduct, which Challenger, Gray & Christmas said could include mismanaging funds or personal conduct.
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