THE OUTLOOK FOR HEALTH CARE IN 2023:

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July 25, 2022

Why hospital CEOs are leaving (and where they're going)

Daily Briefing

    In the first half of 2022, 62 hospital CEOs left their roles, marking a 48% increase from the same period in 2021, according to a CEO Turnover Report from executive outplacement firm Challenger, Gray & Christmas.

    Ensure seamless leadership transitions

    CEO departures are up, especially in hospitals

    The report found that 774 CEOs of U.S. companies have left their roles this year—the highest number of CEOs to depart during the first half of the year since the firm started tracking monthly CEO changes 20 years ago.

    Across all industries, CEO departures increased 20% from the 591 CEO departures announced in the first half of last year and increased 6% from the former high of 728 departures during the first six months of 2006. However, the number of CEO exits in June fell to 106—a 29% decrease from 150 reported departures in May. Still, June departures in 2022 were 2% higher than the 104 CEO exits announced in June 2021.

    So far, government and nonprofit organizations have seen the highest rates of CEO turnover in 2022, with 174 in the first half of the year, followed by technology companies with 80 exits. In June, government and nonprofit organizations reported 20 CEO departures, followed by technology companies with a reported 17 departures.

    According to the report, 62 hospital CEOs have left their roles in 2022, marking a 48% increase from 42 exits during the first half of 2021. Of the 62 CEOs who have exited their roles this year, 15 left during the month of June.

    Why CEOs are leaving (and where they're going)

    In June, 16 CEOs across all industries stepped down to fill other high-level roles within their organizations, bringing the 2022 total to 199. Typically, these CEOs serve as a chair or advisor to the organization's new CEO.

    "Generally, new leaders are brought in during a period of uncertainty. Former leaders often remain with the company for a period of time, either as a consultant or continue as a Board Member or Chair to maintain institutional knowledge and have the appearance of a seamless transition," said Andrew Challenger, SVP of Challenger, Gray & Christmas, in a previous report released last month.

    Notably, 53 CEOs left their roles to pursue new opportunities in 2022, with 14 exits in June.

    "The labor market is still tight at the moment, despite increasing layoffs and a likely recession on the horizon," Challenger said. "The skills CEOs implemented, as well as acquired, during the pandemic are extremely valuable and many of them are finding new opportunities both within the organization and at new companies."

    "Meanwhile, a large swath of CEOs are choosing this challenging economic time to retire after serving the last few years during the pandemic," Challenger added.

    185 CEOs retired during the first half of 2022, making up 23.9% of all CEO departures this year. In comparison, 159 CEOs retired during the same period in 2021, making up 24.7% of all departures at that time. (Ellison, Becker's Hospital Review, 7/20; Blackman, HealthLeaders Media, 7/21; Challenger, Gray & Christmas news release, 7/20; June 2022 CEO Turnover Report, 7/20)

    Learn more: 16 things CEOs need to know in 2022

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