When the CEO Quits: CEO Resignations Hit a Record High

When the CEO Quits: CEO Resignations Hit a Record High

CEO resignations for the first nine months of 2023 hit 1,425, the highest number since search firm Challenger Gray and Christmas began tracking the data in 2002. That figure is up a whopping 47% from the 969 CEOs who left their jobs in the first nine months of 2022.

That means companies across the US are scrambling to fill a leadership void. And, if the trend continues, it means that every company should be preparing for the sudden need to find a new chief executive.

Here, we look at the most important steps a company should take when there is a vacancy at the top of the leadership team.

1. Ensure Continuity of Leadership

Everyone from the board of directors to the customers to the employees is going to be wondering what the leadership vacuum will mean for them.

Finding the right interim CEO or acting CEO who can step in quickly and take charge of the day-to-day running of the company is a critical first step in righting the listing ship.

While it might be tempting to appoint a senior vice president or some other exec who knows the company, this is no time to test a first-time executive. It is far better to bring in an experienced CEO who knows how to take charge.

That’s why so many companies contract with InterimExecs to have one of our vetted, experienced CEOs step into the job. We can have the right leader onsite in as little as 48 hours. Don’t be fooled by fake interims. You need an accomplished executive who can develop a plan, get buy-in from all of the stakeholders and then get to work implementing that plan.

2. Begin the Search for a Permanent Replacement

Once an interim CEO is in place, the company can begin the process of finding a permanent replacement. Our interim executives often serve in an advisory role, helping identify the right executive. In recent years, many have been asked to stay on over the short term to help the new permanent CEO get quickly up to speed.

3. Communicate, Communicate, Communicate

Employees, customers, suppliers, lenders, and other partners need to hear from the board of directors and the interim chief executive. The communication can take many forms, from in-person meetings to general emails to social media posts. Be prepared to answer questions as openly and honestly as possible, without making promises you can’t keep.

It is particularly important to be transparent with employees. They will be worried and anxious about the future of the company and their paycheck. You don’t want valuable employees to start job hunting while you’re getting operations back on track.

This is the speech all new CEOs should give.

4. Focus on the Future

The CEO’s resignation is a setback, but it’s important to remind all of the stakeholders — from employees to lenders — that the company has a bright future. Focus on the company’s goals and objectives and continue to work hard to achieve them.

5. Review the Company Succession Plan

Succession planning is important for small companies with one or more co-founders and it’s just as important for large corporations. Ideally, you’ll have a plan in place before your CEO quits. But if not, now is better than never. Use this experience to inform the succession plan you create for the future.

Why Are CEOs Quitting in Record Numbers?

In the third quarter of 2023, 518 CEOs left their posts, a record number. That’s up 166% from the 195 CEOs who left in the third quarter last year, and up 5.9% from Q2 2023. The greatest number of CEO exits happened in the government/nonprofit and hospital sectors, where post-pandemic burnout has taken a toll.

The search firm said companies did not always give a reason for the CEO’s exit. Of those that did give a reason:

  • 318 CEOs retired this year or 22% of all exits, down slightly from the 24% of CEOs who retired last year.
  • 45 CEOs found new positions within their companies, usually heading up another division or location within the umbrella company.
  • 241 (17%) of CEOs “stepped down” into other C-level, advisory, or Board roles.
  • 2 CEOs left their posts last month due to allegations of professional misconduct for a total of 8 this year.
  • 2 CEOs left due to sexual harassment allegations, one of which occurred last month.

What Are Some Signs the CEO is in Trouble?

There are a number of signs that a CEO may be in trouble. Some of the most common signs include:

  • The company is underperforming. If the company is not meeting its financial goals or is losing market share, this could be a sign that the CEO is not doing a good job.
  • The CEO is making poor decisions. If the CEO is making decisions that are not in the best interests of the company, this could be a sign that they are not fit to lead the company.
  • The CEO is losing the support of the board of directors. If the board of directors is no longer confident in the CEO’s ability to lead the company, this could be a sign that they are about to be fired.
  • The CEO is facing personal problems. If the CEO is facing personal problems, such as a divorce or a health issue, this could be a distraction that is making it difficult for them to do their job.
  • The CEO is simply not a good fit for the company. Sometimes, a CEO is simply not a good fit for the company. This could be due to a difference in values, a lack of experience, or a personality clash.

Which CEOs Resigned This Year?

Among the high-profile CEO resignations this year:

  • CNN CEO Chris Licht: Licht resigned as CEO of CNN in June after less than a year in the role. He faced criticism from staffers and outsiders over accusations of being too aloof and self-absorbed. A four-person interim leadership team was appointed to serve during the search for a new permanent CEO.
  • Cboe Global Markets CEO Edward Tilly: Tilly resigned as CEO of Cboe Global Markets in September after the company disclosed that he had an undisclosed personal relationship with an employee. Board member Fredric Tomczyk replaced him.
  • BP CEO Bernard Looney: Looney resigned as CEO of BP in September after the company disclosed that he had an undisclosed personal relationship with a subordinate. CFO Murray Auchincloss took over as top boss on an interim basis.
  • X CEO Elon Musk: Musk resigned as CEO of X (formerly Twitter) in October after completing his acquisition of the company. He appointed ex-NBCUniversal veteran Linda Yaccarino to the position.
  • YouTube CEO Susan Wojcicki: Wojcicki stepped down as head of YouTube in February after nearly 25 years at Google. In a blog post announcing her decision, she said that she was “starting a new chapter focused on my family, health, and personal projects I’m passionate about.” Neal Mohan, formerly YouTube’s chief product officer, took over the job.
  • Amazon CEO Jeff Bezos: Bezos stepped down in 2022, telling employees in an email that he intends “to focus my energies and attention on new products and early initiatives.” He was replaced by Andy Jazzy, chief executive of Amazon’s cloud computing division.