2019 will be remembered as a year of political conflict and the third presidential impeachment in U.S. history, but it will also be remembered as record year for corporate strife. More than 1,300 CEOs stepped down in 2019, the highest total CEO churn since tracking of this figure began in 2002.
The reasons for leadership change were varied across companies—career changes, health concerns, and scandals, among others. The industry most affected was tech with 200 CEO changes, up nearly 50% from 2018. Finance had the second highest CEO turnover, despite being down 17% from 2018.
So what gives? Higher executive churn is typical in a recession, but the U.S. has seen record stock market highs and strong corporate returns this year. What can we learn from this churn, is it signaling a recession, and how does it relate to jobs at large?
We took a look at job listings for a number of notable companies who said goodbye to their CEOs this year to learn if there was a connection between hiring activity and executive turnover. We found that nearly all of the companies we looked at saw decreased job listings leading up to and following the CEO announcements. Only McDonalds, and Wells Fargo have seen rebounding job listings. The most severe losses following the CEO departure announcements were seen by WeWork, Cathay Pacific, and HSBC.
Of note, companies appear eager for new blood. 2019 was the first year that external replacements surpassed internal, with 718 new CEOs coming from outside company ranks, while only 545 were internal.
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