CEO Succession Practices in the Russell 3000 and S&P 500
Chief executive succession rates have dropped after a peak during the pandemic, but an impending wave of retirements among older CEOs underscores the need for boards to focus on long-term planning. This report offers comprehensive data on current trends in CEO succession among US public companies, along with best practices for leadership transitions. Key Insights […]
Posted by Matteo Tonello, The Conference Board, Inc., on Tuesday, November 19, 2024
Editor's Note:
Matteo Tonello is the Head of Benchmarking and Analytics at The Conference Board, Inc. This post is based on a Conference Board memorandum by Mr. Tonello, Greg Arnold, Blair Jones, Deborah Beckmann, and Jason Schloetzer.
Chief executive succession rates have dropped after a peak during the pandemic, but an impending wave of retirements among older CEOs underscores the need for boards to focus on long-term planning. This report offers comprehensive data on current trends in CEO succession among US public companies, along with best practices for leadership transitions.
Key Insights
- While the overall rate of CEO succession is decreasing and normalizing to prepandemic levels, total shareholder return is playing a larger role than usual in predicting turnover.
- Succession rates among CEOs aged 64 years and older have steadily dropped in recent years, likely reflecting boards’ preference for stability amid uncertainty, but signaling a potential surge in successions as these CEOs eventually retire.
- Despite a 70% increase in female CEOs among Russell 3000 companies since 2017, women CEOs still represent just 8% of the total index, while in the S&P 500, the figure is slightly higher at 10%, highlighting slower progress compared to the faster rise in female board representation.
- CEOs are typically promoted rather than hired, and the chief operating officer role remains the most common path to the top, although companies with declining performance are more likely to hire externally.
