Analysis by Nicole Goodkind, CNN
Published 8:26 AM EDT, Wed September 13, 2023
CNN New York
Chief executives have left their posts at an alarming rate this year.
It’s been a bad year for CEOs.
Chief executives have left their posts at an alarming rate as their performance — and their behavior — come under increased scrutiny by corporate boards.
What’s happening: Well over 1,000 CEOs have left their companies this year, according to a Challenger, Gray & Christmas report. That’s 33% more than last year and the highest total in the first seven months of the year since the staffing research company began tracking exits in 2002.
The average CEO tenure has significantly decreased from an average of 12 years to between 5 and 7 years now, according to analysts who focus on CEO succession for talent management company Ferguson Partners.
“While specific details regarding these exits are typically undisclosed, it is evident that more CEOs are exiting due to the new pressures of their roles, the relentless pace of change, and, in some cases, their own actions,” they wrote.
The role of the CEO is changing rapidly, they said, and executive boards have been struggling to keep shareholders happy.
September’s exits: At least three major CEOs have stepped down in the first two weeks of September alone.
BP CEO Bernard Looney resigned on Tuesday “effective immediately” after admitting that he had not been “fully transparent” about “historical relationships with colleagues,” according to a statement from the oil giant.
Looney had spent less than four years on the job but was a company man through and through — he was a BP lifer, joining the company in 1991 at the age of 21 as a drilling engineer and working his way up to the top position.
But ethical infractions aside, investors were disappointed with his performance well before his resignation.
On Looney’s watch, BP became the only major oil company with goals to reduce oil and gas output this decade. Shareholders weren’t too happy with the decision -— or with BP’s share price (BP), which has lagged that of its competitors.
Looney recently trimmed BP’s emission reduction goals and increased spending on crude oil and natural gas. Still, BP missed profit expectations last quarter. Shares of the company fell 1.3% on Tuesday.
Meanwhile, clothing company Express announced on Saturday that former Tyson Foods executive Stewart Glendinning would become its next CEO, replacing Timothy Baxter, effective September 15.
Baxter’s resignation was announced just one day after the company released its second-quarter results, with net sales of its Express brand and its lifestyle line UpWest decreasing 15% compared to last year. The company’s sales in retail stores were down 21%, and its e-commerce sales were down 1%. Express reported a net loss of $44.1 million, compared to a net income of $7 million in the same quarter of 2022.
Express said Baxter’s departure was not related to the company’s financial performance. Still, shares of the company are down by about 85% since Baxter joined Express in June 2019 after spending 11 years with Macy’s.
Earlier in September, Walgreens Boots Alliance said that CEO Rosalind Brewer stepped down less than three years after taking the helm at the pharmacy chain.
Brewer’s expertise is in retail, and her exit comes as Walgreens aims to focus more on health care, said Neil Saunders, managing director of GlobalData. Retail, he said, hasn’t been a driver of growth for the company.
Shares of Walgreens are down 32% so far this year. Walgreens slashed its full-year profit guidance in June, warning of softening consumer spending and a pullback in demand for Covid vaccines.
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Typically, companies don’t provide detailed reasons for why a CEO exits. Of the leaders tracked by Challenger, Gray & Christmas this year, 266 CEOs have left this year without reason. Another 182 retired, 168 either stepped down or resigned, 40 took a new opportunity, 37 had their interim positions come to an end, 32 took new positions within their companies, and 17 left for personal reasons. Economic uncertainties and “a much faster rate of change in the business environment are causing companies to desire new approaches, new innovations, and new strategies to compete more vigorously.