This year, CEOs were retiring, being fired, or being poached.
According to outplacement company Challenger, Gray & Christmas, 327 chief executive changes were disclosed by U.S. public corporations this year through November.
Since the company started keeping track of turnover at least in 2010, that is greater than in any prior year. Additionally, it’s an 8.6% rise over the previous year.
CEOs of American corporations that have long dominated their respective markets, such as Boeing, Nike, and Starbucks, were among those who left. The rate of change indicates that when consumers demonstrated a willingness to spend, those companies’ customers, investors, hedge funds, or boards became impatient with sales declines or strategic blunders in an otherwise robust market.
During the pandemic, when businesses were abruptly faced with lockdowns, remote work, supply chain challenges, shortages, and sheer survival, CEO transitions stalled. Afterwards, they had to deal with rising borrowing rates, inflation, labor shortages, changing consumer tastes, and other difficulties.
With 197 replacements, 2021 has the fewest of the previous 14 years.
According to Clarke Murphy, managing director and former CEO of Russell Reynolds Associates, a leadership consultancy organization, the cost of capital and the rate of change are causing faster turnover.
In an otherwise robust market, Murphy claimed it was simpler to draw attention to subpar performance.
“Any company that is significantly underperforming has been under scrutiny, and boards of directors moved faster than they might have five or seven years ago,” Murphy said, referring to two consecutive years of S&P [500] returns of 20 percent or more.
Compared to industries like oil and gas or utilities, which often have internal and longer-tenured CEOs, consumer-focused businesses typically have more turnover because they are more sensitive to shifting trends and desires.
The current increase in turnover coincides with a decline in the number of publicly traded enterprises.
Some of the most significant changes to U.S. CEOs this year include the following:
Intel
Almost four years after he was hired to turn the chipmaker around and improve its competitiveness, the semiconductor giant fired CEO Pat Gelsinger earlier this month.
As the artificial intelligence wave bolstered chipmaker Nvidia, Intel’s stock price and market share plummeted, and the company found it difficult to break into the market.
No successor has been identified as of yet.
Boeing
As part of a larger managerial reorganization, the aerospace behemoth announced in March that former CEO Dave Calhoun would be leaving. After years of issues with its defense and commercial aerospace business, it was nearly three months after an unsecured door plug blew off midair from a nearly new Boeing 737 Max 9 operated by Alaska Airlines, frustrating the executives of some of its largest airline clients and sending the company back into a safety crisis.
In the latter days of 2019, Calhoun was named to succeed former CEO Dennis Muilenburg, who had been fired for his management of the aftermath of two deadly Boeing 737 Max crashes in 2018 and 2019.
Kelly Ortberg, a three-decade aerospace veteran and former CEO of Rockwell Collins, succeeded Calhoun in August after Boeing recruited him out of retirement in Florida to stabilize the business.
As Boeing attempts to stabilize production, Ortberg announced hundreds of layoffs and cut expenditures elsewhere to save money during a labor strike that ended last month.
Starbucks
Starbucks replaced Laxman Narasimhan as CEO of Chipotle Mexican Grill and hired Brian Niccol to turn around the coffee chain’s fortunes after sales in its largest markets declined. The announcement of Niccol’s hiring in August caused the company’s shares to jump by almost 25%.
He has made plans to return the business to Starbucks and concentrate on what first drew customers to the coffee giant in the 100 days since his appointment. Making its coffee shops friendlier, reducing its extensive menu, and expediting service are all early phases of the plan.
In contrast, Chipotle appointed industry veteran and insider Scott Boatwright to lead the Mexican restaurant brand in November.
Nike
Elliott Hill, a seasoned businessman who began his career at Nike as an intern in the 1980s, took over as CEO of the shoemaker in September, replacing John Donahoein.
Since taking over, Donahue has helped Nike increase revenues from $39.1 billion in fiscal 2019 to $51.4 billion in fiscal 2024. However, growth eventually stalled as he lost sight of innovation and moved away from wholesale partners like Foot Locker and Macy’s.
Peloton
The home fitness equipment company, which was a pandemic darling, had been having trouble ever since demands to return to work began to come in.
Peloton hired former Spotify and Netflix executive Barry McCarthy in 2022 to succeed founder John Foley, but he resigned in May following the company’s announcement of yet another reorganization.
Peter Stern, a former Ford executive and co-founder of AppleFitness+, was named Peloton’s third CEO in October. Wall Street is optimistic that Stern, who has experience expanding subscription-based services, will turn Peloton around by reducing expenses and concentrating on its lucrative subscription income.
Kohl’s
Late last month, the off-mall department retailer Kohl’s announced that its CEO, Tom Kingsbury, would be leaving on January 15. Ashley Buchanan from Michaels, a craft store, will take over as Kohl’s CEO.
In each of the last 11 quarters, Kohl’s comparable store sales—a crucial indicator for retailers—have decreased, and the company’s stock price has also fallen.
WW International
Sima Sistani, the CEO of the weight loss company that was once known as Weight Watchers, said in September that he would be leaving the position immediately.
Shares of WW International have dropped more than 80% this year due to the company’s difficulties. Under Sistani’s leadership, it made an effort to refocus and add a platform that connects users with well-known weight-loss medications.
This report was contributed to by Gabrielle Fonrouge and Amelia Lucas of CNBC.
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