CEO Turnover Hits 5-Year High: What Does This Mean for Companies?

When we analyzed the 1,560 companies listed on the world’s leading stock indices, we found a total of 175 CEOs left their positions last year. This is up 32% compared to 2021 and 13% higher than the next highest year, 2018.

But the picture varies around the world:

• FTSE 350 CEO turnover increased by 111%
• S&P 500 CEO turnover increased by 39% 
• ASX 200 CEO turnover increased by 13% 
• Nikkei 225 CEO turnover fell 8%
• EuroNext 100 CEO turnover fell 33%

Two factors are contributing to the rise in CEO turnover.

CEOs around the world have steered their organizations through unprecedented times. From COVID-19 to the war in Ukraine, all businesses have faced exceptional challenges – and many CEOs who might have been planning to step down earlier might now feel they can do so without risking further turmoil for their companies.

Boards are also increasingly looking for new leadership. Having survived the last few difficult years, many are now reexamining their strategic goals – and whether they have the right CEO to address them. As the challenges CEOs must now address have multiplied considerably, boards are considering whether they have the right person at the top.

As these factors persist and develop, we expect annual CEO turnover to remain high in the years to come.

What does this mean for companies?

The rise in CEO turnover is a challenge for companies. When a CEO leaves, it can disrupt the company's operations and create uncertainty for employees and investors. Companies need to be prepared for CEO turnover and have a plan in place to ensure a smooth transition.

To prepare for CEO turnover, boards should have a strong CEO succession plan.

A CEO succession plan should identify which of the organization’s current leaders have the potential, with the right support and development, to become CEO. It should also outline what it will take to prepare each candidate for the role.

The rise in CEO turnover is a challenge for companies, but it’s also an opportunity. When a CEO leaves, it’s a chance for the company to start fresh and bring in new leadership. Companies that can manage CEO turnover effectively can emerge stronger than ever.