Great CEO Resignation invites the Great Agitation
Chief executives are over it. C-suite turnover spiked in the first half of 2021, according to data from recruiter Heidrick & Struggles. With average corporate leaders far older than they were 15 years ago and the job of managing during a pandemic a lot less fun the trend will continue in 2022. The Great CEO Resignation will become an invitation for corporate cage rattlers.
US bosses like American Airlines' Doug Parker and Janus Henderson's Dick Weil are throwing in the towel. Half of Europe's largest banks have replaced CEOs in the past two years. Leaders at some of Asia's biggest firms, including Mizuho Financial's Tatsufumi Sakai and Simon Hu at Ant have recently quit. Some were helped to the door, like the bosses at Barclays and Apollo Global Management . Not even the Las Vegas strip seems to be as much fun: Wynn Resorts' Matt Maddox is cashing in his chips.
Among just over 1,000 large, listed companies, some 76 CEOs in the first half of 2021 left their posts globally, Heidrick tallies, a 23% jump from the previous high of 2018 and almost as many as departed in all of 2020 .
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The trend will continue. Rank and file are restless. From Wall Street to Silicon Valley, workers are demanding higher pay and better benefits. Leaders are not only consumed with staff retention and the difficulty of managing during a pandemic via Zoom or Teams but struggling with supply-chain headaches and other disruptions related to Covid-19. Zero-Covid policies in Hong Kong and elsewhere make the fun part of the job – flying the company jet to see the troops or customers – nearly impossible.
The average CEO is also eight years older at hire now than in 2005, according to data from Crist Kolder Associates, a headhunter. That leaves an opening for activist investors like Dan Loeb and Bill Ackman. As Morgan Stanley's head of mergers Rob Kindler told Breakingviews at the Reuters Next conference, activists like to muscle into companies when leadership is strained, and boards are distracted.
Uppity investors are ready to roll, too. Firms like Paul Singer's Elliott Management deployed just $28.5 billion in the first three quarters of 2021, about half the amount they put to work in the same period in 2018 and less than the two subsequent years, research from Lazard's Capital Markets Advisory Group shows. CEOs may be hitting the beach, but that will make remaining executives' jobs far harder.
