What is behind the mass exodus of American CEOs?

More US chief executives are stepping down than at any time since the financial crisis, as a combination of concern over the global economy, changes in consumer behaviour and a new corporate culture drive change at the top.

According to job placement firm Challenger, Gray & Christmas, in the last quarter of 2018 a record number of American chief executives (425) left their jobs.

In total more than 1,450 US CEOs stepped down or were fired last year, marking a 25% jump compared to 2017 and the highest annual turnover since the financial crisis a decade ago.

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“Sexual assault allegations. Racial slurs. Company policy violations — and a slew of retirement announcements. There were many reasons several high-profile CEOs have left their jobs this year,” says Fox Business.

The vice-president of the firm Andrew Challenger says the high level of departures is in part because companies are concerned about the outlook for the economy and markets, with CNN Business reporting that while the job market remains very strong, “the stock market is rocky, and many economists predict a recession is around the corner”.

Trade concerns also hang over a number of industries, including the manufacturing and tech sectors, Challenger said, meaning “boards are anticipating a changing environment and putting leadership in place who are capable of succeeding in it”.

Rana Foroohar in the Financial Times suggests it could be a combination of anti-corporate populism “making global business trickier;” a post-recession shift in attitude that means “being a titan of industry doesn’t carry quite the public cachet it once did;” and increased public company oversight that “means your pay and perks are under tremendous scrutiny”.

“The #MeToo movement is another contributing factor to the bump up in 2018’s departures” says Yahoo Finance, with boards facing pressure to actually enforce company policies regarding allegations of misconduct.

However, “despite the #MeToo movement, just 10 of those exits were the result of scandals,” says Fortune, with a majority (358) retiring and a similar number (337) stepping down into other roles within the company.

“In the end, I suspect that the key reason for the departures may be a sense of diminishing returns,” says Foroohar.

“We’re at the end of a very long credit cycle, and more corporate leaders know it can’t last. Most share buybacks are done at the top of the market. Perhaps we should view CEO resignations in the same light. Chief executives tend to like to go out at the top of their game. Perhaps their resignations are telling us something about the market now,” he concludes.