The Troubling Reason Why Many Major Companies Will Soon Be Without CEOs
This article is more than 2 years old
Everyone knows how hard this year has been on the American economy and the global economy. Fortune 500 companies and top executives are feeling the pinch of the looming recession as much as small independent shops, as CEOs are leaving their jobs at an alarming rate. For many of these companies, things are about to change as they plan not to fill the position.
2022 will be known as “The Great CEO Reshuffle” as several major companies, including Disney, Meta, Twitter, Bed, Bath and Beyond, Kohl’s, and CNN, have seen their chief executive leave this year. Most of these exits are due to high losses in the stock market and a recession on the way, with Fortune 500 companies collectively losing 18% in 2022.
It has been reported that 774 CEOs left their jobs in the first half of this year alone. This is the highest number of exits in the last ten years. While the resignations slowed down in the second half of this year, in the last month, they have increased once again.
But what really happens when a CEO leaves? In recent years, a CEO’s vision has been tied to how a company will perform in the future. Finding a replacement for someone who deems themselves irreplaceable is a difficult task, and it is not a position that can be filled quickly. Since investors do not like change or the unknown, it can affect how the company is doing. The resignation of the Salesforce CEO overshadowed the company’s increase in profits, and their share prices still dropped.
Board members have revealed that better succession management is needed, as close to $1 trillion yearly is lost in market value when these transitions are poorly handled. Some are mismanaged so severely that companies are not considering replacing CEOs at all and delegating the chief executive’s tasks through senior management instead.
Along with CEOs leaving rapidly, it may be time to declare that meme stock media is over. Companies that flourished in the pandemic and its various lockdowns are now showing signs of failure in the post-pandemic volatile economy and looming recession. Bed, Bath and Beyond are a perfect example as they are struggling to stay open, and their stock fell an eye-watering 75% this year.
Also, another service taken down by the pandemic is the Boeing 747. It has been revealed that the company is not manufacturing any more of their famous aircraft. Only 44 of the plane are still in service, as domestic travel was limited during the pandemic, and international travel was nearly non-existent. This is a massive reduction from the 130 747 planes in operation in 2019, just before the pandemic hit. Most of these planes were unused throughout the pandemic and never returned to service.
2022 has not been a great year for business. In the history books, it will be known as a terrible year for the global economy and consumers alike. It is not surprising that many CEOs have left their post as it seems impossible to keep businesses open, let alone make them profitable. With a possible recession on the way, it is not going to get easier.
