In the fourth quarter of 2021, CEO resignations were up 16% over the prior year, according to executive outplacement firm Challenger, Gray & Christmas. Recent and announced high profile departures include Twitter's Jack Dorsey, Amazon's Jeff Bezos and American Airlines' Doug Parker.
This trend is expected to continue into 2022 as executives swap high-stress positions for more family time. Would your business survive if its CEO or founder suddenly jumped ship?
Large public companies often have deep management structures and succession plans in place. So, they can usually recover from the loss of a C-level executive over time, except in rare instances.
It's more common for smaller businesses to depend heavily on a key person — and the actual, or even the potential, loss of that individual is likely to have a major impact on value. Key person discounts are applied to reflect the reduction in a company's value resulting from such a loss.