Chief Financial Officer turnover among publicly traded companies reached a three-year peak in the first quarter of 2024, according to a study by leadership advisory firm Russell Reynolds Associates. The analysis revealed that 82 new finance chiefs were appointed during this period, matching the record turnover observed in the first quarter of 2021.
This recent figure signifies a substantial rise of about 14% from the first quarter of 2023 and a 24% increase compared to the same period two years prior. In Q1 2021, there were 83 new CFO appointments, highlighting the considerable fluctuation in finance leadership among publicly traded companies.
The recent spike in CFO turnover highlights the shifting dynamics within corporate finance departments. The Russell Reynolds report suggests that as economic uncertainty becomes a persistent challenge for organizations, the reluctance to replace CFOs has diminished. This trend is further influenced by CFOs being increasingly viewed as potential successors for CEO roles, as well as heightened retirement rates among finance chiefs following the COVID-19 pandemic.
The report also notes that more than half (55%) of global incoming CFOs are appointed internally, indicating the effectiveness of CFO succession plans within companies. This internal appointment trend underscores the strategic planning companies are implementing to ensure continuity and stability in their finance leadership.
Recent examples of high-profile CFO appointments include Northrop Grumman, which announced on May 14, 2024, that its space systems CFO, Kenneth B. Crews, will take over the company’s overall finance department effective October 1. Crews is set to replace current CFO Dave Keffer, who plans to retire in 2025 to spend more time with family. This change reflects the broader trend of internal promotions and planned succession within major corporations.
Several other prominent companies have also announced new finance chiefs during the first three months of the year, including Costco, Walgreens, Restaurant Brands International (the parent company of Popeyes), and GameStop. These appointments further illustrate the high turnover rate and the ongoing shifts in corporate finance leadership.
Since 2019, CFO turnover has been on the rise, reaching a five-year high in 2023 with 292 CFOs appointed, compared to 274 in 2022. The technology industry, in particular, has recorded the highest CFO turnover since Q1 2022, with a turnover rate of 6.2%.
The data from Russell Reynolds Associates provides a comprehensive overview of the current state of CFO turnover, highlighting the significant changes and underlying factors driving these shifts. As companies navigate economic uncertainty, the role of the CFO remains crucial, and the trends in turnover reflect broader strategic adjustments within the corporate world.
