The Year of CEO Ousters

A CEO fired for a run of slow sales. Another forced out due to their inability to regain the confidence of customers and other stakeholders. A third who resigned because his cost-cutting strategy failed to improve profitability.

It appears that 2024 is a year in which many boards have lost patience with CEOs. Of the 191 Russell 3000 Index company heads who have left this year, 74—or nearly 40%—were reportedly fired or forced out, according to data compiled by exechange.com, a research provider that analyzes public sources to track executive changes. That’s the most at this time of year since the firm began tracking CEO departures in 2017.

Regardless of the reason, a CEO departure is always a shock to the system, says Alan Guarino, vice chairman in Korn Ferry’s Board and CEO Services practice. “When a CEO transitions, all types of dynamics surface calling the success of the company's future into question,” he says. 

But it’s not just the sheer number of CEOs being forced out that is intriguing experts; it’s the various strategies boards have used to hire the next boss. Some firms have—without the existing CEO’s knowledge—searched and lined up an outsider to take over. This isn’t a common tactic, though, because many boards don’t maintain a list of external prospects, says Joe Griesedieck, vice chairman and managing director in Korn Ferry’s Board and CEO Services practice. “Boards should always be prepared for an unexpected CEO transition,” he says.

Going this route also means boards must be extremely tight-lipped. Leaks can occur even amid the most well-intentioned processes, says Radhika Papandreou, president of Korn Ferry North America. “A leak could be more disruptive to a company than a prolonged public search,” she notes.

This year, many companies have relied on a more conventional route: firing the CEO and installing an interim replacement. The interim boss is often a member of the board or executive leadership team, Papandreou says. This temporary appointment bridges the transition, enabling the company to conduct a thorough search (experts caution against taking too long to name a new boss, though; this can leave a company and its stakeholders in limbo).

Other boards have announced the imminent departure of the outgoing CEO and the start date of the new one. Some companies have named the successor publicly; others have waited until that person officially takes over. Companies will often use the second approach when they’ve selected an outsider who, for whatever reason, cannot assume leadership right away.

Guarino cautions that thinking about the next CEO should be an ongoing project. “It should not be something that’s done only when a CEO transition is imminent.” 

Learn more about Korn Ferry’s Board and CEO Services capabilities. 

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