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2016 CEO Transitions

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

CEO profiles

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?

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