CEOs are people (and employees), too. Amid the wave of purported “COVID clarity” that precipitated mass resignations among workers, executives are finding that higher remuneration is not worth the physical and mental costs of the stress endemic to high-level positions. If anything, the pressure is greater at the top.
As Ben Horowitz, former CEO of software company Loudcloud (later called Opsware) and survivor of the dot-com bubble crash, said of dealing with crises like that one: “[I]f you don’t like choosing between horrible and cataclysmic, don’t become CEO.”
Executives in these precipitous times bear a heavy responsibility and that weight is increasingly overwhelming. The pendulum has swung. More executives than non-executives are now giving serious thought to resignation.
In a survey of 2,100 employees and C-level executives across the United States, U.K., Canada, and Australia, Deloitte found that almost 70% of executives wanted to quit their jobs, compared to 57% of employees. Four out of 10 executives described themselves as consistently overwhelmed, 36% reported feeling exhausted, and 76% cited the pandemic as a significant stressor.
Executive outplacement firm Challenger, Gray & Christmas reported that in the first quarter of 2022, 395 CEOs had left their companies, a 29% increase from the first quarter of 2021. At the same time, executive compensation has risen 18.9% since the start of the pandemic.
The Reasons for Leaving
The financial freedom that executives enjoy is not the only factor involved in job satisfaction, and the usual suspects are implicated in the burnout suffered by C-suite executives, business owners, founders, and managers: Poor work-life balance, long hours, and the consequent toll on family life. Executives considering walking away have cited factors such as wanting more time with family, feeling stressed and burnt out, looming health concerns, tanking stock prices, and looking forward to retirement.
Many CEOs have limited time with their spouses, contributing to the average 31% divorce rate among top bosses. Limited time with children can also result in missing significant life events, making it difficult to bond with children as they grow up. As if that wasn’t enough, long-term stress — so common among CEOs — appears to shorten lifespans by 18 months and increases visible signs of aging.
The desire to leave a company for a more balanced lifestyle is not strictly a pandemic-related phenomenon. CEOs reportedly were bailing in droves when turnover reached a 10-year high back in 2019 for reasons generally consistent with those cited in 2022. Older executives were said to dominate a 16% spike in CEO departures in the last quarter of 2021, only in part due to COVID-related stressors.
The pandemic response created a number of financial challenges, and decision-makers are still feeling the ramifications of the long economic shutdown. According to the University of Rochester, supply chain shortages haven’t been this disruptive since 1972, and they are expected to continue for at least another year.
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The Reasons for Staying
Although both the CEO and the small business owner are ultimately responsible for the direction and success (or failure) of their company, as well as their employees, stress has not taken a similar toll. Small business owners who survived the pandemic are not closing their doors. Despite facing similar burnout issues as both CEOs and low-level employees, these entrepreneurs have an optimistic outlook.
Is it because the business is a passion project and it is much harder to walk away from a venture so closely tied to the owner’s identity? Founder CEOs may offer a clue. Although the average tenure for CEOs is 6.9 years, executives who have been with their companies from the beginning and were integral to getting them off the ground stay much longer.
Jeff Bezos left Amazon last year after 27 years. Peloton founder John Foley stepped down this year after nearly 11 years on the job, and Bill Gates was CEO at Microsoft for 25 years. In a study of 3,633 CEOs, Rudiger Fahlenbrach found that the average tenure of a founder-CEO was 16.4 years.
The level of personal investment an executive has in the company is a contributing factor to whether an executive resigns. Smaller companies with many of their original leaders and companies overseen by founder CEOs may be more likely to keep their current leaders in the face of widespread resignations.
Among the CEOs looking for a change, some are retiring but others have new projects to tackle. Many are financially comfortable enough that the compensation is no longer worth the sacrifices endemic to the job, so they are planning extended vacations or leaves, taking a role with reduced responsibility within their companies, or starting a business of their own. Regardless of their plans, the commonality is an improved work-life balance. The Great Re-Evaluation, it seems, is not limited to employees.