Private equity firms swap CEOs as investment holding periods lengthen

Overall U.S. CEO departures fell 19% from the same period last year

The broader CEO-departure data moved in a different direction from the private-equity pattern. The outplacement firm Challenger, Gray & Christmas gave CEO Brief a preview of its September report, which showed that 1,337 U.S. CEOs had left their jobs year to date, down 19% from 1,650 during the same period in 2025.

The private-equity backdrop was an exit drought for investments, which left buyout companies holding their assets longer and shifting their focus toward portfolio management. Laura Kreutzer, WSJ Pro’s private equity bureau chief, said sponsors increasingly ask whether they have the right leader and are “opting to swap out CEOs in the middle or even toward the end of their investment holding periods, a move that was much less common only a few years ago.”

A Summit Leadership Partners survey of 176 private equity executives indicated that changes in leadership were widespread. Seventy-two percent of those executives said they had brought in a new CEO in more than a quarter of their portfolio companies.

Kreutzer said, “Private-equity sponsors, at least the good ones, tend to be very clear about their expectations.” For CEOs without a clear sense of those expectations, or when the expectations may have changed, “it’s pretty important to ask and verify,” she said. She said the CEO role is likely evolving across private-equity-backed, founder-owned and public companies, and that agility and adaptability have become far more valuable.

CEO Brief noted that AI was not as important to leadership success a few years ago. AI has become a more common factor in private-equity executive hiring. Kreutzer said more private-equity firms factor how a prospective leader addresses or integrates AI into their hiring assessments. The article also cited CEO burnout as an important challenge associated with longer holding periods.

Kreutzer said CEO turnover does not always originate with private-equity firms themselves. Sometimes, she said, CEOs welcome the opportunity to step back because of pressures from their private-equity owners, a changing macroenvironment, customers and employees.

Replacing a CEO can also be disruptive. Kreutzer said replacing one can be “extremely disruptive and unsettling,” but she does not think it necessarily indicates a hiring flaw. “A bigger risk lies in keeping a CEO on board who isn’t capable or motivated,” she said.

Many private-equity firms try bringing in other resources before replacing a CEO, Kreutzer said. A sponsor might add a board member with specific expertise or hire an executive coach. Summit Leadership Partners, which conducted the survey, said its executive-coaching engagements had doubled in the past year or so.

Separately, Gernot Döllner, CEO of Audi, discussed the automaker’s American plans in an interview with the Journal the previous day. He said, “It’s a long-term investment for decades, and will make Audi a different company in the future.”

The CEO Council Summit is scheduled for December 7–8 in San Francisco.

CEO Brief is written and edited by a team from The WSJ Leadership Institute: Alan Murray, president; Erle Norton, C-Suite Content managing editor; and Lila MacLellan, CEO Brief editor.