Most companies stop the math at the search fee, or the replacement search fee if it comes to that. That is the smallest number in the equation, and treating it as the whole answer is how a mismatched hire continues to get underpriced.
Start with the direct costs. Comp paid during the tenure, severance if there was one, the original search cost, and the replacement search cost. Straightforward, and usually the only number anyone tracks.
Add regretted turnover next. A leadership mismatch rarely stays contained to one seat. People who report to a leader who is not right for the role leave, not because their own role failed, but because of who they were reporting to. Standard replacement cost for each of those departures runs fifty to two hundred percent of that person's own salary, depending on level. Three regretted departures under one mismatched leader means three more of these calculations stacked on top of the first.
Add the drag. A leader who does not fit the seat does not just fail to add value. They can slow down everyone underneath them. That shows up as a measurable productivity loss across the entire team's payroll for as long as that person held the seat, not just their own salary.
Last is the piece nobody puts a clean number on. Initiatives that got delayed or killed. Decisions that did not get made. Trust that had to be rebuilt with a team afterward. Real cost, no formula for it, which is why most people stop the math before they get here.
Stack all four and the number most companies quote, one to three times the mismatched leader's salary, stops holding up. Run the turnover cascade and the productivity drag honestly and the real number is usually closer to five to ten times, sometimes more, depending on how long the mismatch stayed in the seat before anyone acted.
That gap, between the number most people use and the number the math produces, is the reason a leadership mismatch gets treated as a search problem instead of what it is, an organizational one.