Why 2025 is on Track for a Record Number of CEO Departures

This year, the CEO’s chair has become the hottest seat in the boardroom – and the most frequently vacated.

So much so, that according to Bloomberg reporter Matthew Boyle, 2025 is on pace for a record number of CEO departures. The financial costs for these events can be astronomical, which don’t even include the significant disruption and culture hit that sends shockwaves through the entire organization.

But just because they’re no longer at their previous companies doesn’t necessarily mean they failed. A big factor in turnover is CEOs are often hired for a specific phase the companies are in at the moment or aspire to be in the future. Leaders can succeed in their goals, resulting in companies and chief executives agreeing that it’s time to move on as priorities shift again.

Why is this happening now?

There’s no single definitive answer, but there are multiple factors that have contributed to the high CEO churn:

1. Turnover was suppressed in the first couple years of the pandemic. Companies and their CEOs weren’t inclined in 2020 or much of 2021 to change their leadership at the top, in fact, turnover declined about 10% in this period. This followed a spike in leadership changes in 2022 that have sustained ever since.
   
   
2. Changing company priorities. As previously mentioned, companies shifted to a post-pandemic world, and many boards and private equity firms sought leadership who were better equipped to navigate that volatility. Manufacturers in particular had to solve tremendous supply chain challenges.
   
   The pre- and early-pandemic economy experienced low interest rates and increased M&A activity, but shifted to high inflation and interest rates, infrequent exits and a focus on organic growth once societies started opening back up. This resulted in companies formerly needing CEOs with backgrounds to oversee acquisitions to ones who were more experienced in growing companies without higher-priced loans and acquisitions.
   
   
3. Burnout. CEOs were simply exhausted and emotionally drained from seeing their companies through the pandemic and its immediate aftermath.

How this impacts hiring managers

For those currently involved in a CEO search, it means now’s a great time as the top candidates are actively taking recruiters’ phone calls. CEOs already understand the hiring process and their need to be flexible about location.

High turnover also means the demand is high, which makes the competition fierce for the A-players.

The effect on the C-suite and senior leadership

A new CEO often wants their own leadership teams in place, compounding the turnover to include another handful of highly compensated individuals who will then want some of their own people in place and on and on it goes.

Before you’ve had a chance to catch your breath, one CEO departure can result in a mass exodus that’ll cause disruption far beyond the corporate office.

Conclusion

The cost of CEO turnover, both financial and cultural, is high and frequently underestimated. That’s why it’s essential to proactively plan for succession and minimize disruption. Getting the next CEO hire right isn’t just about filling a vacancy, it’s about setting the stage for sustainable success in a rapidly changing business landscape.

Right now, chief executives have higher-than-normal availability and a willingness to entertain new opportunities. However, the key isn’t simply plucking one out of the group and hoping it works out, it’s finding the right CEO who suits the needs of the company for both the short and long term.