Lonergan SV150 Leadership Team 2.0

Sweeping Changes in Leadership at Companies with new CEOs

Susan Lonergan, February 14th, 2024

In August, we reported on a surge in CEO turnover in the ranks of the Lonergan SV150. Like cascades from a winter snowmelt, leadership changes have continued downstream.

We looked at sixteen companies from our August report with new CEOs appointed from September 2022 to September 2023, and found a jaw-dropping 41% of senior leadership at these companies are new in their roles since the new CEO started.  If we include the new CEO in this percentage as well, this rate increases to 48% of the leadership team is new in role

Is this higher than normal? Clearly yes -  we found published rates of public company officer annual turnover in the S&P 500 have generally been no higher than 18%, including both voluntary and involuntary turnover. To check to see if this published statistic looked meaningful for our companies, we looked a "control" group of eight other LSV150 companies across the revenue spectrum and chosen to be in industries similar to those with the new CEOs. We found that the control group companies saw 18% of leaders were new in their roles in 2023, which matches expectations of 'normal' turnover seen in the S&P 500.

Which roles were most likely to have new incumbents? There were seven new CFOs in this group of 16 companies, for a replacement rate of 44%.  There were 4 new Chief Operating Officers out of total of 6 people in that role (67% new), since not all companies profiled someone with that title on their website. 

The Infographic below summarizes our key findings by role:

Notes on method­ol­o­gy: senior lead­er­ship was defined as those exec­u­tives pro­filed on the com­pa­ny web­site — con­sult­ed in the final week of Jan­u­ary 2024. The num­ber of exec­u­tives shown on the web­sites var­ied wide­ly from 3 (at the small­est two com­pa­ny teams shown) to 14 — the medi­an num­ber of exec­u­tives shown was 9. All com­pa­nies dis­played the role of CEO and CFO. Not all oth­er roles were utilized/​reported on the web­site (for exam­ple, CTOs were at 12 of 16 com­pa­nies; CPOs at 10; CROs at 5; CCOs at 4; COOs were present at only 6).

Com­pa­nies in the August CEO Tran­si­tion Report which qual­i­fied for this study were exclud­ed from the data if they had appoint­ed a co-CEO to join a longer serv­ing incum­bent, or had ceased doing business.