The AI era is turning Corporate America into a CEO churn machine

Narayen’s exit is a stark reminder that, after years of hyping the technology, CEOs now must turn their AI rhetoric into results—or risk being shown the door. The make-or-break moment for CEOs is contributing to an era of rapid turnover among chief executives. Last year, companies in the S&P 1500 named 168 new CEOs, the highest total in more than 15 years, according to Spencer Stuart, a global executive search and leadership advisory firm. Already this year, the CEOs of several companies including Lululemon, Disney, Target, and Walmart, have left their roles. 

CEO tenures are getting shorter and fewer incoming chief executives have prior CEO experience, the data shows, making the two-time CEO exceedingly rare. All told, corporate America has turned into a CEO meat-grinder; it’s chewing up and spitting out leaders at a pace not seen in a decade and a half.

“What we’re seeing right now is clearly a sign of stress,” says Dirk Jenter, professor of finance at the London School of Economics and Political Science. AI is only one part of the reason why.

AI hype is becoming a career hazard for corporate leaders

CEOs have been quick to blame recent layoffs of rank-and-file employees on AI, but their own departures are rarely explained so simply. Still, there’s little doubt that expectations around AI are factoring into chief executives’ more frequent departures in one way or another. 

There are circumstances like Narayen’s in which shareholders are displeased with a CEO’s ability to deliver on an AI vision. “Investors are not necessarily super patient,” Jenter says. “They see billions being spent on AI investments, and they see sort of very little in short-term return on investment, and that puts a lot of pressure on company leadership.”

But investors are also expecting CEOs to achieve overall growth on par with the extraordinary gains recorded at companies at the center of the AI revolution, the so-called “Magnificent 7.” 

“There’s increasing pressure on all CEOs to be growing at similar kinds of rates,” says Anthony Nyberg, a management professor at the University of South Carolina’s Darla Moore School of Business. “[It’s] not actually sustainable or manageable for those companies.”

A surge in shareholder activism is another sign of investors’ growing impatience. Activist campaigns hit an all-time high of 255 last year, surpassing the 2018 record, according to Barclays. U.S. campaigns rose 23%. 

Activists are increasingly targeting CEOs. “Five or ten years ago, activism was largely about corporate policies,” Jenter says. “Now they’re going directly after the top leadership of companies.” Thirty-two U.S. CEOs resigned within a year of an activist campaign, a 38% increase over the four-year average, Barclays’ data shows. 

And then there are instances in which boards tap fresh (often younger) blood to guide companies through the AI transition. Doug McMillon, Walmart’s highly-respected former CEO who, by all accounts, left on his own terms, cited AI in explaining his decision to step down in January. He said his successor, John Furner, was “uniquely capable of leading the company through this next AI‑driven transformation.”

Another force behind the churn: Today’s board directors are less likely to be current or former CEOs than in the past, studies show. Nyberg argues that these less CEO‑centric boards tend to be less sympathetic to sitting chiefs—and perhaps less attuned to the full scope of the job—making them more inclined to support a leadership change.

Experts also argue that CEO turnover is catching up after a backlog from the COVID era, during which boards favored continuity. 

All told, CEOs are getting less time to deliver on their visions. The average tenure for S&P 1500 CEOs hit 8.5 years last year, down from 9.2 years in 2024—and the shortest since 2019. 

The broader CEO churn trend 

The rapid turnover is requiring boards to fulfill their succession planning responsibilities, and they’re increasingly dipping into their companies’ own ranks to replace chief executives. 

The share of externally hired CEOs hit 60% in 2025, up from 57%, a historic low, in 2024. But there are signs that boards have been caught off-guard by the pace of CEO turnover. Nineteen new CEOs were appointed from their company’s board last year, the most since 2020, according to Spencer Stuart, “suggesting that some companies are not ready for succession.” 

Almost always, internal CEO hires lack prior chief executive experience, a trait that shows up in the data. In 2025, 84% of newly appointed S&P 1500 CEOs in 2025 were serving in their first enterprise CEO role, reversing a multiyear trend toward CEOs with prior public-company experience.

Boards often view experienced CEOs as a safer bet, but Spencer Stuart research shows that, compared to veteran chief executives, rookies led their companies to higher market-adjusted total shareholder returns, with less volatility in the stock price.

As the number of first-time CEOs has increased, the age of new CEOs has dropped, hitting 54.4 in 2025, down from 55.8 in 2024. The share of incoming CEOs 60 and above fell to 18%, after hovering near 30% for the past two years.

Even with higher stakes and higher turnover, today’s CEOs are unlikely to garner much sympathy from the wider public. Median chief executive compensation hit $16.5 million in the S&P 500, according to 2025 proxy filings. (Exorbitant pay may actually be one reason two-time CEOs are so rare; few need the money.) 

Still, rapid CEO churn should raise alarm bells outside the boardroom. CEOs who hold onto the job past year ten beat the S&P 500 over the course of their time in the job, more than those in any other length of tenure, Spencer Stuart research shows. “That’s where the greatest shareholder value creation comes in,” says Jim Citrin, chair of the firm’s global CEO practice. “Longer is better.”