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-eight S&P 500 companies installed a new chief executive in
2016, the highest number of transitions since 2007 and 14 percent
more than the 51 transitions in 2015. Since 2006, when S&P 500
companies installed 60 new CEOs, the number of transitions
generally declined, hitting a low of 37 in 2012 before increasing again.
S&P 500 CEO Transitions 2006 - 2016
The largest S&P 500 companies — the top 100 by revenue — were
least likely to experience a CEO transition in 2016, while the majority
of transitions occurred at companies in the mid revenue ranges.
Percentage of Transitions* by S&P 500 Company Range
*Percentages are rounded up
Why do CEOs leave?
The vast majority — 88% — of CEO transitions occurred because
the former CEO retired or stepped down, according to company
reports. This represents an increase from 2015, when CEOs retiring
or stepping down drove 82% of transitions.
Reasons for CEO Transitions
The average age of the outgoing CEOs was 60, while the average
age of the incoming CEOs was 53, the same as in 2015. Departing
CEOs were slightly older in 2015, averaging 62 years old. Four of
the new CEOs, 7%, are women, while only one of the departing
CEOs is female.
External vs. internal candidates
Ninety percent (52) of the new CEOs were promoted from within
the company, the highest percentage in the past 10 years. All but
eight of them were the result of a planned succession.
CEO Successors: Internal vs. External Placements
An analysis of three four-year periods since 2005 confirms that
S&P 500 companies are increasingly likely to promote CEOs from
within rather than hire from outside; 80% of new CEOs named
between 2013 and 2016 were promoted from within.
New CEO Backgrounds
Split vs. shared chairman and CEO roles
Only four of the CEOs, 7%, were also named chairman of the board,
a decrease from 14% last year. Sixty percent of the outgoing CEOs
stayed on to serve as board chair, compared with 49% in 2015.
Is the New CEO Also the Chairman?