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Chief executives of U.S. public companies are leaving in record numbers despite historic bonuses, as a booming stock market and worries about 2025 turmoil prompt executives to leave the company. .
According to consultancy Challenger Gray, 327 chief executives of U.S.-listed companies announced their retirement in the year to November, surpassing the previous record high of 312 in 2019. This year, amid falling stock prices, leaders of Boeing (Dave Calhoun), Intel (Pat Gelsinger), and Nike (John Donahoe) resigned, leading to a flurry of CEO departures at blue-chip companies. .
The resignation led to a shortened tenure in the role. Eight CEOs left their companies in the third quarter after less than three years at the company, the highest number of short-term appointments since 2019, according to consultancy Russell Reynolds.
As President-elect Donald Trump promises tariffs and threats to free trade, CEOs overseeing the world’s supply chains say they’re retiring or considering retirement rather than face the looming headaches. Those involved in providing advice said:
“In some (business) sectors, you’re going to have CEOs who say, ‘I’m going to resign before I deal with all this,'” said one executive adviser, who requested anonymity to speak freely.
Rich Fields, head of Russell Reynolds’ board effectiveness practice, said CEOs of public companies are increasingly considering jobs at private companies.
“There are better places to make money than being the CEO of a publicly traded company, and private capital growth is a big part of that,” he said. Private companies are not subject to similar disclosure rules, but are generally more generously paid with capital, he said.
“If a (private) company is in crisis, CEOs stand to benefit more than if they were in a public company and constrained by the actions of their colleagues and shareholders,” Fields said. I can do that.”
In addition, large private equity groups such as Carlyle and KKR often hire former executives in advisory roles, often with significant compensation.
“Being the CEO of a publicly traded company used to be the pinnacle,” said Jason Baumgarten, head of Spencer Stewart’s CEO practice. Currently, “the strict monitoring that accompanies this is becoming an issue.”
It’s not always clear when CEOs will resign or whether by choice, but when business performance is weak, “boards feel more pressure than ever to take action sooner,” he said. said.
Median compensation for S&P 500 CEOs increased by $1 million this year to a record $15.6 million, according to Institutional Shareholder Services. The booming stock market is also fueling this pattern, as most chief executives are paid in company stock rather than cash, the people said.
Chief executives are not the only executives taking flight. Chief financial officers at large publicly traded companies in the U.S. are tenured for just over three years, down from three-and-a-half years two years ago, according to a December report from software company Datarails. Promotion to CEO rarely causes turnover.
Datarails research found that from 2018 to 2023, 152 companies had three different CFOs, including Dollar General, Expedia, and Under Armour.
“The average tenure of CFOs at Fortune 500 companies continues to decline,” said James Stark, director of CFO operations at recruitment firm Egon Zehnder.
“They are regularly approached for new opportunities,” he said, adding that the “tyranny of quarterly profits” is contributing to burnout. “Moving into a private space can take you away from it.”
