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Each year, Spencer Stuart tracks CEO transitions among S&P 500 companies. These transitions can be part of a planned succession or can arise unexpectedly, the result of company performance or personal issues. In addition to cataloging the reasons for CEO departures, based on company reporting, we also examine information about the successors, including whether or not they are internal candidates and whether they have been appointed chairman of the board in addition to CEO. CEO transitiOn OvErviEw Fifty-one companies on the S&P 500 Index recorded the installation of a new chief executive in 2015. This means transitions among S&P 500 companies essentially stayed level with the previous year, suggesting a reversal of the overall decline seen from 2005 to 2010. Nearly one-third of these transitions took place in the third quarter of 2015. why dO CEOs lEavE? Voluntary departure was the dominant explanation for CEO departures in 2015. Forty-two of the 51 transitions were attributed to either retirement or the CEO choosing to step down. CEO prOfilE The average age of outgoing CEOs was 62, while the average age of incoming CEOs was 53, both holding steady from last year. None of 2015’s new CEOs were women, while three women were among the outgoing chief executives. ExtErnal vs. intErnal CandidatEs The percentage of CEO successors who were promoted from within the company jumped to 84% in 2015. All but five of the 43 internal CEO placements were the result of a planned succession. This percentage has risen steadily over the past three years. Based on analysis and many years of experience, we know that many routes to the top exist. There are internally promoted CEOs and externally recruited CEOs. The CEO can also be hired as an insider- outsider, from the board or been the prior CEO of the company. split vs. sharEd Chairman and CEO rOlEs 86% of the new CEOs did not take on the role of chairman, similar to last year’s 87%. Meanwhile, 49% of outgoing CEOs stayed on to serve as chairman of the board vs. 54% in 2014. Note: This data looks at the companies that have experienced a CEO transition, as defined by the replacement of an outgoing CEO with a permanent CEO. Data includes names of incoming and outgoing CEOs; the reason for the new appointment/departure of the former CEO; the ages of both the outgoing and incoming CEO; and whether the appointment was an internal or external one. Prior to 2010, Spencer Stuart tracked CEO turnover, defined and recorded as any change in the CEO post. As of Jan. 1, 2010, we adjusted our methodology to track CEO transitions, defined as the change from a permanent outgoing CEO to a permanent incoming CEO. Open cases of turnover, defined as cases where no permanent CEO has been appointed, or cases where interim CEOs serve less than one year, are not included in year-end transition totals. For information about copying, distributing and displaying this work, contact [email protected]. 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 51 52 53 37 49 43 46 54 58 60 67 61 S&P 500 CEO Transitions 2004 - 2015 401-500 12 % 301-400 18 % 201-300 22 % 101-200 29 % 1-100 20 % Percentage of Transitions * by S&P 500 Company Range *Percentages are rounded up Reasons for CEO Transitions Former CEO retired Former CEO stepped down Company spinoff Former CEO Company merger Company split 47 % 35 % 08 % 6 % 02 % 02 % resigned 62 average age of outgoing CEOs 53 average age of incoming CEOs 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 16 % 19 % 25% 27 % 22 % 23 % 28 % 19 % 21 % 23 % 34 % 34 % 84 % 81 % 75% 73 % 78 % 77 % 72 % 81 % 79 % 77 % 66 % 66 % Internal External 50% 100% 0% CEO Successors: Internal vs. External Placements Split Role Combined CEO & Chairman 2009 89 % 11 % 2010 70 % 30 % 2011 80 % 20 % 2012 89 % 11 % 2013 94 % 6 % 2014 87 % 13 % 2015 86 % 14 % 100% 50% 0% Is the New CEO Also the Chairman? 86 % of companies chose to divide the roles of chief executive and board chair 49 % of outgoing CEOs continued with the company in the role of chairman CEO TransiTiOns 2015 All S&P 500 groupings experienced turnover, with those in the 101-200 grouping recording the highest total at 15 cases, nearly one-third of all recorded transitions. One year ago, the highest number of transitions occurred in the 1-100 range. 2012-2015 (193 companies) 74% 3% 2% 7% 14% 2008-2011 (192 companies) 72% 2% 3% 6% 16% 2004-2007 (246 companies) 63% 4% 4% 7% 22% Internal Insider-Outsider Former Executive From Board External Internal/External Candidates: A More Granular Look Note: Percentages are rounded up
