Why CEOs Leave — and What Boards Can Do About It

October 15, 2026 – CEO turnover is placing greater pressure on boards to think about leadership retention long before a search becomes necessary. For executive search firms, that means helping clients look beyond succession planning to understand the factors that influence whether a high-performing leader stays, disengages, or ultimately decides to leave.

“Over the past two decades of placing executive leadership, I’ve watched boards spend enormous energy debating compensation packages and search timelines, while underinvesting in the harder question: why do CEOs actually leave, and what could have kept them,” said Chris Miclot, partner and general manager at Legacy MEDSearch, in a recent report.

The data tells a clear story. In 2025, the S&P SmallCap 600 named 70 new CEOs — the most for that index in a decade, and more in raw terms than either the S&P 500 (59) or the S&P MidCap 400 (39), according to Spencer Stuart. CEO turnover accelerated further last year, with succession rates climbing into the low double digits industry-wide. For mid-sized MedTech companies, generally those under $1 billion in revenue, the pressure is even more acute: leaner leadership benches mean a single departure creates disproportionate disruption across the organization, and the churn often starts even earlier than the public markets — an estimated 60 percent of founder-CEOs at venture-backed medtech companies are replaced by the time the company reaches its Series B or C round.

Why CEOs Leave 

“Boards often assume departures happen suddenly,” Mr. Miclot said. “In my experience, they rarely do. Unlike most employees, CEOs have the luxury of selectivity.” More often, they’re pushed out — research on over 1,000 board members found CEOs are typically fired for soft issues like poor change management and ignoring customers, not weak financial performance. That pattern shows up in the data on why CEOs actually leave: in Challenger, Gray & Christmas’s most recent monthly tracking, “new opportunity” and voluntary step-downs together accounted for a meaningful share of CEO exits — well ahead of terminations or forced departures.

That selectivity is exactly why the search itself takes so long, and why the timeline looks different depending on whose side of the table you’re standing on, according to Mr. Miclot. Search firms put the typical CEO search at four to eight months from the hiring organization’s perspective. But from the executive’s own side, it runs longer: most C-suite candidates report searches of seven to twelve months from the start of active outreach to a signed offer, and for specialized MedTech mandates — where genuinely comparable roles are far fewer and farther between — it regularly stretches toward the year mark or beyond.

“A leader who has quietly decided to move on can continue running the business competently for a year or more while privately evaluating what comes next,” Mr. Miclot explained. “For smaller companies especially, that’s where the real risk sits: not in the search process itself, but in the mismatch between when a CEO quietly starts looking and when the right opportunity — and the right replacement — actually comes together.”

Chris Miclot joined Legacy MEDSearch since 2012 and was promoted to general manager in 2018 and equity partner in 2021. He works with a variety of companies throughout the MedTech space, matching top talent of all levels of seniority to innovative companies. Mr. Miclot attends nearly 20 conferences a year to stay up to date on the latest technology, keeping clients up to date with hiring trends, and meeting talented candidates in person.

“This is the part boards consistently underestimate: a CEO’s disengagement is invisible by design. Strong executives maintain composure,” he continued. “They keep hitting targets. They give no outward indication that they’ve mentally checked out. By the time a board recognizes genuine dissatisfaction, that leader may have already been planning an exit for 12 to 18 months. The operational metrics look fine right up until the resignation letter arrives.”

How Boards Keep the Right CEO Longer 

If disengagement builds quietly, retention has to be addressed just as deliberately, and well before it becomes a search problem, according to the Legacy MEDSearch report. CEO turnover is accelerating industry-wide. Succession rates hit 12.5 percent in 2025, up from 9.8 percent the year before, with Challenger, Gray & Christmas tracking 2,032 US CEO exits over the same period. This isn’t only a story about underperformers being replaced: turnover among companies in the top three performance quartiles jumped to 12 percent in 2025, up from just seven percent the year before, nearly closing the gap with turnover at struggling companies.

“Boards are increasingly willing to make a change even when the numbers look fine, which means retention has to be earned continuously, not assumed just because the business is doing well,” the report explained. “One of the most overlooked levers is operational support. In smaller and mid-sized organizations especially, CEOs often function without the infrastructure that would let them lead strategically rather than administratively. A capable executive assistant is not a luxury; it is a retention tool.”

“The same applies to a strong chief of staff or operations leader,” the report continued. “Every decision across every department ultimately reaches the CEO’s desk. Without support absorbing the operational load, even the most capable leader burns out faster and starts looking elsewhere sooner. Boards that invest in this infrastructure are, in effect, investing in tenure.”

The Cost of Getting It Wrong

Legacy MEDSearch also noted that the financial case for retention and disciplined hiring is not abstract. Retained executive search fees start at roughly $80,000 at top firms like Korn Ferry, and that’s just the floor — a genuine CEO search typically costs far more once you factor in how those fees are actually structured. Retained search fees are typically priced at 25 percent to 35 percent of a candidate’s first-year total cash compensation, with CEO and CFO searches most commonly landing at the full one-third. On a $550,000 total compensation package, that fee alone runs to roughly $183,000. Mid-level executive searches (VP/director) tend to fall closer to the $20,000 to $50,000-plus range, while true C-suite mandates routinely push the search fee itself into six figures — before the cost of the vacancy, internal time, or a mis-hire is even counted.

“A mis-hire at the CEO level, factoring in severance, lost productivity, and the cost of running the search again, can reach 200 to 400 percent of annual salary,” Mr. Miclot said. “For a mid-sized MedTech company, that is rarely a rounding error. It’s a material hit to the year’s operating plan, and often to strategic momentum that takes far longer than a year to rebuild.”

Finding the Right CEO 

Board alignment before a search begins is what separates an efficient process from a prolonged one, the Legacy MEDSearch study noted. “Before engaging candidates, the board needs consensus on what the company actually needs, what success looks like at 12, 24, and 36 months, and what is realistically affordable given the company’s stage,” it said. “A mandate that is too broad becomes unachievable; one that is too narrow eliminates strong candidates unnecessarily. Getting this specific, and getting the full board aligned on it, is the single highest-leverage step in the entire process.”

Related: How to Build a Perpetual CEO Succession Pipeline

“Equally important is timing,” Mr. Miclot added. “A candidate who checks every box can absolutely exist — the harder problem is that both sides have to independently arrive at yes at the same moment: the board has to be genuinely ready to move, and the executive has to be genuinely ready to leave. That mismatch shows up in the numbers.”

Offer acceptance rates on executive searches range from 55 percent to 70 percent for contingency-based processes up to 90 percent-plus for the most disciplined retained searches — meaning even when the right person is identified, a meaningful share of searches still don’t close, and timing, competing offers, or shifting priorities are frequently why. Roughly 40 percent of executive searches fail to place a candidate at all, with delayed decision-making and slow time-to-hire cited among the leading causes.

“The more productive exercise, then, isn’t just separating must-haves from nice-to-haves before the search launches — it’s building a process fast and disciplined enough to close when both sides are actually ready, rather than losing the right candidate to a slower clock,” Mr. Miclot said. “If candidate twenty lacks one preferred qualification but exceeds every requirement that matters, is that genuinely a deal breaker? Hiring a CEO is one of the most consequential decisions a board will make; approaching it with clear priorities, rather than an unattainable wish list, is what allows boards to act decisively when the right candidate appears.”

“This is also a governance matter,” Mr. Miclot continued. “Leadership teams, investors, advisors, and department heads will all have opinions, and their input has value. But the board carries fiduciary responsibility and represents shareholder value, which means the board, not the broader group of stakeholders, should hold the greatest weight in the final decision.”

It’s worth stating plainly: CEOs are not mythical figures immune to the pressures everyone else navigates, the Legacy MEDSearch report concluded. “They have families, they experience burnout, and they carry the weight of decisions that affect hundreds or thousands of employees, often with very little support of their own,” the firm said. “Recognizing that reality isn’t a soft consideration set apart from good governance, it is good governance. Boards that build genuine support systems, and that stay attuned to the early, quiet signs of disengagement, retain stronger leadership and build more resilient organizations as a result.”

Related: How Executive Search Firms Identify True Talent

Contributed by Scott A. Scanlon, Editor-in-Chief and Dale M. Zupsansky, Executive Editor – Hunt Scanlon Media