From 2006 to 2009, 80% of CEO turnover was due to dismissal, according to a report on CEOs at S&P 500 companies during 2009-10 released by The Conference Board, a business research organization. CEO retirement rates generally fell between 2000 and 2010, although they recently rebounded, the report found.
When CEOs leave, the chance their posts will be filled by current employees is shrinking. For the past two decades, companies have turned increasingly to outsiders when replacing CEOs, and outsiders accounted for 25% of CEO appointments in 2009 and 2010.
Other findings about outgoing CEOs:
- Age and performance matter. Poor-performing companies and those with older CEOs are more likely to have CEO turnover.
- Tenures are getting shorter. Between 2000 and 2010, average CEO tenure decreased from about 10 years to about eight years.
- Turnover is holding steady. About one-tenth of the companies studied changed CEOs in 2010, in line with the 2000-2009 average.
When replacing CEOs, companies may value similar traits. Nearly all emphasized the new CEO’s qualifications, and more than half mentioned his or her leadership abilities. Incoming CEOs were an average of 51 years old, according to the report.
Read more about the report here.