Burnout, New Strategic Demands Could Hasten Senior Living CEO Turnover

Recent data on CEO turnover suggests that a new cadre of top executives is rising in the wake of the pandemic, across various industries. That trend could also be playing out in senior living.

Covid-related burnout and the need for new skillsets in light of pandemic-related challenges are two factors underlying recent CEO turnover across various industries, according to reports from executive outplacement firm Challenger, Gray & Christmas, and a separate report from data mining and analytics provider ESGAUGE, nonprofit business membership and research organization The Conference Board and executive search firm Heidrick & Struggles.

Those same factors likely are affecting the senior living sector. Being on the frontlines of Covid-19 has been an exhausting test of leadership, and top executives are also now facing a slew of pandemic-related imperatives, such as a greater need to integrate with the larger health care system.


In some respects, the senior living industry is overdue for a changing of the C-suite guard. So, Covid-related CEO shakeups could ultimately benefit the industry; but the timing of transitions remains tricky.

Some senior living CEOs have recently exited due to burnout or other reasons, and a new generation of leaders is likely to rise in the next year or two, Sabra Health Care REIT (Nasdaq: SBRA) CEO Rick Matros said during a recent SHN+ TALKS. However, when and how CEO exits occur are open questions, as not every leader will want to admit to burnout or no longer being the best person for the job.

“The question is, do they recognize it, or is performance deteriorating because they’re burnt out and they have to be pushed a little bit? I think that it’s going to be some of that as well,” Matros said.


As the first wave of Covid-19 swept across the country in the spring of 2020, companies questioned the impact of pandemic-induced lockdowns on operations, and how to manage workforces throughout the length of the outbreak. This led many companies considering a change at the top to hold on to leaders in a sign of stability, according to Challenger, Gray & Christmas.

The firm produces monthly reports on CEO turnover across U.S. companies, and those reports paint a picture of how stability in 2020 has been given way to a period of change.

In Q2 2021, 307 CEOs left their posts, which was a 51% increase from the second quarter of 2020, according to the latest report, released July 7. Within the health care/products sector, 73 CEOs departed in Q2 2021 — a 22% year-over-year increase.

The pace of CEO turnover began to increase in the second half of 2020, according to a June report from The Conference Board, ESGAUGE and Heidrick & Struggles. For 2020 as a whole, chief executive turnover averaged 11.6%, which is in line with previous years. But turnover was 11% lower during the first half of 2020, meaning that the pace of CEO transitions significantly increased in the back half of the year.

That uptick in turnover came as some CEOs burned out after a rollercoaster year of crisis management stemming from the pandemic, the report notes.

However, new strategic imperatives and evolving market conditions are also behind some of the leadership changes.

“After a year, many companies have a completely new way of doing business, supporting remote work and offering new and different benefits to their talent. Couple that with a new administration with different priorities, and companies are turning to new leadership for this phase,” Challenger, Gray & Christmas SVP Andrew Challenger wrote in the firm’s April 2021 CEO turnover report.

More recently, however, CEO turnover has “leveled off somewhat,” Challenger noted in his firm’s most recent report. Companies are increasingly worried about “an exodus of talent” that is occurring nationwide, he wrote. Workers at all levels are reevaluating their priorities in light of Covid-19, while more relaxed work-from-home policies enable people to consider jobs that in the past might have been inaccessible.

CEO turnover in senior living

The trends in CEO turnover that are playing out across the U.S. business landscape are also being observed within senior living.

Burnout, for instance, is weighing on chief executives in senior living. Sabra already has seen one of its operator CEOs step down specifically citing burnout, Matros said.

Donald Thompson, CEO of senior living developer and operator The Maxwell Group, also expects that burnout may lead to more CEO turnover in the foreseeable future.

“I had a CEO of a public company call me last week to talk about that very issue,” he said in June, during an SHN+ TALKS. “It was an interesting conversation, and I haven’t seen it, but he and I think it might occur.”

Emerging strategic considerations also will likely lead to new executive leadership, in the opinion of Amy Pisciotta, managing director at corporate talent management firm Ferguson Partners, told SHN.

The new CEOs entering hospitals and health systems are likely to take a more holistic view of the care continuum than their predecessors, including a greater interest in the role of private-pay senior living, she believes. Senior housing provider companies therefore will need leadership equipped to guide health system partnerships or get involved in other parts of the continuum, such as home health.

“I believe that the more that happens, the more we will also be looking at how senior housing is led, who leads it, what’s in their background,” she said.

A continuing trend

If Covid-19 spurs CEO turnover in senior living, it will continue a trend that had been playing out even prior to the pandemic.

CEO Tenure at Largest Nonprofits per LZ200

A 2018 survey from specialty investment bank Ziegler indicated that over 70% of CEOs at nonprofit senior living organizations would retire within 10 years. That turnover already has been playing out: Nine of the top 15 largest nonprofit senior living providers on the 2020 LZ 200 list assumed their roles within the past three years. That is a 60% turnover rate.

The average CEO tenure across the 15 largest nonprofits is about 5 years.

CompanyCEO/PresidentTenure (years)
National Senior CampusesBruce Beardsley2
Evangelical Lutheran
Good Samaritan Society
Randy Bury3
Acts Retirement-Life
Jerry Grant3
Ascension LivingDanny Stricker 2
Presbyterian Homes
and Services
Dan Lindh25
Trinity Health ServicesSteven Kastner5
HumanGoodJohn Cochrane12
Covenant LivingTerri Cunliffe6
Lifespace CommunitiesJesse Jantzen1
BenedictineJerry Carley4
Westminster Communities
of Florida
Terry Rogers1
Retirement Housing
Stuart Hartman0.33
CassiaBob Dahl3
The Kendal Corp.Sean Kelly5
Presbyterian Senior LivingJim Bernardo2
Average tenure: 5 years

Comparatively, only six of the top 15 largest companies on the 2020 Argentum list of the 150 largest for profit operators have changed chief executives. However, the average tenure of this group of CEOs is only slightly longer — 7.9 years — than the average tenure across the 15 largest nonprofits.

On the for-profit side, this year has been marked by high profile leadership transitions such as Jack Callison leaving Enlivant to take the reins at Sunrise Senior Living, and Dan Guill succeeding Callison at Enlivant. Sunrise did not disclose a reason for the exit of its former CEO, Chris Winkle.

Prior to the pandemic, for-profit’s financial performance appeared to be correlated to several high-profile CEO changes. Within the last five years, new CEOs took the reins at Brookdale Senior Living (NYSE: BKD), Five Star Senior Living (Nasdaq: FVE) and Capital Senior Living (NYSE: CSU). While multiple factors contributed to the decisions in these cases, the new CEOs were all tapped after a period of share price decline for these public companies.

CEO Tenure at Largest Operators per Argentum Data

CompanyCEOTenure (years)
Brookdale Senior LivingCindy Baier3
LCSJoel Nelson4
Holiday RetirementLilly Donohue5
Atria Senior LivingJohn Moore18
Five Star Senior LivingKatie Potter2
Sunrise Senior LivingJack Callison0.25
Erickson LivingAlan Butler11
Senior LifestyleJon DeLuca10
ALG SeniorCharlie Trefzger5
Watermark RetirementDavid Barnes12
EnlivantDan Guill0.25
Frontier ManagementGreg Roderick21
Trilogy Health ServicesLeigh Ann Barney2
Capital Senior LivingKim Lody2
Leisure CareDan Madsen23
Average tenure: 7.9 years

Going forward, there are indications that financial performance might be a less determinative factor in CEO changes. In 2020, the gap between the CEO succession rates among the best- and worst-performing companies narrowed to its lowest point in two decades, according to the CEO Succession Practices report.

“While total shareholder return continues to be a key predictor of CEO turnover, extra-financial performance indicators that measure how CEOs promote a diverse, fair, and inclusive workplace; their approach to sustainability issues such as climate change or community engagement; and how they protect employees’ security and wellbeing — particularly burnout and mental health — are all increasingly important performance metrics,” the report authors wrote.

There is also a growing expectation that CEOs will champion diversity, equity and inclusion (DE&I), the report notes, but there is still little progress on diversity in the C-suite. Across companies in the Russell 3000 index, only 5.7% of CEOs are female, and 96.2% of S&P 500 companies do not disclose their CEO’s ethnic background in their proxy statements.

Within the largest nonprofit and for-profit senior living provider companies, there is a CEO gender divide. Despite all the new appointments within the last three years, only one CEO among the largest nonprofits is a woman. Among the largest for-profits, 5 CEOs are women, including the new leaders of all three publicly traded operators.

It’s possible that better, more intentional succession planning is needed among nonprofits; the 2018 Ziegler survey showed that only 35% of those organizations had a formal, written succession plan in place.

To a large extent, CEO succession in the nonprofit sector has become tied to larger strategic planning considerations, notably an increasing need for these organizations to gain greater scale and sophistication.

Around 50% of the affiliations in the 2020 LZ 200 report involved a retiring or exiting CEO, Ziegler Director, Senior Living Research and Development Lisa McCracken told SHN. That makes sense, given that there were 25 affiliations in 2019, compared with 10 in 2018.

The 2019 merger of HumanGood and Presby’s Inspired life is an example of how affiliation and CEO turnover are linked: Presby’s Inspired Life CEO Judee Bavaria remained through the end of 2019.

A more recent example is the April 2021 merger of Front Porch and Covia, which was spurred in part by the retirement of Covia CEO Kevin Gerber.

Smaller nonprofits have become more comfortable considering affiliations if boards of directors know that a chief executive plans to retire, gives a solid timeline on when that retirement is expected to happen, and there are no clear successors in place. Some boards may look at both options before deciding to commit to finding a partner.

Smaller providers understand that it’s hard to attract top talent, and want to avoid being a “stepping stone” for a CEO that leaves after just two to three years, McCracken said.

The current consolidation movement is laying the groundwork for how nonprofit CEOs should be compensated, which will eventually have an impact on turnover.

Ziegler President and CEO Dan Hermann believes that nonprofit providers can find lessons here not only from their for profit peers, but with the consolidation of health systems in recent years. In that space, consolidation is leading to larger organizations and greater compensation, set on revenue and expense levels.

Typically, the boards of nonprofit providers regularly conduct market studies — every three years, on average — to determine how much chief executive compensation will increase.

Comparatively, Hermann notes health systems — even nonprofits — base their compensation on revenues and expenses because they have the scale for growth. This gives for profit providers a competitive advantage, particularly in major markets where scale can be concentrated.

He believes that nonprofit providers will eventually adopt the models of larger health systems regarding compensation, which will aid with recruiting new leaders from outside the space. But it has been slow coming.

This is already happening with health systems. Nonprofit networks are able to compete with for profit health systems for top talent, and Zielger has observed executives moving between the sectors.

“If you look at the compensation in health systems, nobody blinks anymore,” he said. “Nobody gets concerned about [being a nonprofit], because they have to attract the skilled leaders to lead those very complex health systems.”

As affiliations continue, nonprofit providers need to identify a new type of executive capable of leading larger organizations, that will mirror the complexity of health systems. For-profit senior housing operators are already doing this.

This is an area he believes the nonprofit space is lagging, as providers are more focused on affiliations and densification strategies on existing campuses. But as the sector has grown in scale, new leaders are entering the space in executive director and other leadership roles at new communities. As these leaders move up the career ladder, providers will not shy away from paying them market compensation, based on achievement.

“[This] will attract well intended people, just like hospital systems,” he said.

Tim Mullaney contributed reporting to this article.

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