Workplace diversity and pay disparity, between men and women, continues to remain a hot button issue for many employers. When it comes to leadership positions, sadly, men still take the cake with only 24% of women holding chief executive officers (CEO) positions. However, there is a silver lining for women looking to pursue CEO roles, a new report is indicating that CEO turnover is at its highest, paving the way for women to take over these positions.
Turnover among CEOs of U.S.-based companies soared in August, as 154 CEOs left their posts during the month. This is the month with the highest number of CEO changes on record, according to a report released by outplacement consultancy and executive coaching firm Challenger, Gray & Christmas, Inc.
August’s departures are 64% higher than the 94 CEOs who left their posts in July and 60% higher than the 96 departing CEOs who left their posts in the same month last year. The next highest month for CEO departures occurred in September 2006 when 152 CEO changes were tracked.
Women Slowly Fill CEO Positions
So far this year, 879 CEO changes have been recorded, 15% more than the 765 CEO departures recorded last year.
Twenty chief executives left for new employment in other companies last month, 24% of all CEOs who have left for that reason this year. This may signal that the tight labor market and demand for high-level talent are drawing CEOs to better opportunities.
PepsiCo’s Indra Nooyi announced her departure last month after 12 years at the helm. She will be replaced by President Ramon Laguarta. So far this year, 152 women have left the CEO role. Of the 716 announced replacements, 161 are women, or 24% according to Challenger tracking. Through August 2017, 18% of replacement CEOs were women, 119 women out of a total of 656 recorded replacement CEOs.
“Companies are battling for talent in the current environment. Those that have taken the tax cuts and expanded operations are finding themselves in need of people to run these organizations. Others are reaping the benefits of strong consumer spending,” says Andrew Challenger, Vice President of Challenger, Gray & Christmas, Inc., in a press release announcing the report findings.
“Meanwhile, some companies are dealing with uncertainty in the markets, disruptions in technology, or fallout from impending tariffs. Regardless of the reason, boards need strong talent with specific skill sets and are looking to make these changes now,” he added.
Additional Findings on CEO Departures
Through August, 249 CEOs have retired from their companies, suggesting they are not moving to leadership positions in other companies. Another 250 stepped down from their roles, typically into a C-level or board member position.
Thirteen CEOs were terminated from their positions, typically due to no confidence from the boards, while 10 CEOs left amid scandal.
The Government/nonprofit sector leads all industries in departures this year with 170 CEOs leaving, 25 of which occurred in August. Computer companies have announced 99 CEO departures through the first 8 months of 2018.
Companies in the Financial sector announced 86 CEO changes so far this year, 16 of which occurred in August. Healthcare/products firms have announced 85 CEO exits in 2018. Hospitals, which are counted separately from healthcare/products firms, have announced 81 CEO departures this year.