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 / Summer 2009 / Issue 55(originally published by Booz & Company)


CEO Succession 2008: Stability in the Storm


This study identified the world’s 2,500 largest public companies, defined by their market capitalization (from Bloomberg) on January 1, 2008. To identify the companies among the top 2,500 that had experienced a chief executive succession event, we cross-checked data across a wide variety of printed and electronic sources, including Factiva and Hoover’s. Additionally, we conducted electronic searches for announcements of retirements or new appointments of chief executives, presidents, managing directors, and chairmen. For a listing of companies that had been acquired or merged in 2008, we also used Bloomberg. Finally, Booz & Company worldwide staff included CEO changes from their regions that had not previously been identified.

Each company that appeared to have changed its CEO was investigated for confirmation that a change occurred in 2008 and for identification of the outgoing executive: name, title(s) upon accession and succession, starting and ending dates of tenure as chief executive, age, whether he or she was an insider or outsider immediately prior to the start of tenure (and, if an outsider, whether he or she was an industry outsider), whether he or she had served as a CEO of a public company elsewhere prior to this tenure, whether the CEO had been chairman (and, if so, for how long), the identity of the chairman at the start of the CEO’s tenure (if different) and whether that individual had been CEO of the company, and the reason for the succession event. Company-provided information was acceptable for each of these data elements except the reason for the succession; an outside press report was used to confirm the reason for an executive’s departure. We also enlisted the support of Booz & Company staff worldwide as part of the effort to learn the reason for specific CEO changes in their regions.

Additionally, we collected data to track the career paths of the new CEO class. For each succession event in which an incoming CEO was identified, we collected the new CEO’s name; new title (for example, CEO and president); age; and educational background, including undergraduate and advanced degrees attained and names of academic institutions from which degrees were received, and additional postgraduate studies and certifications. We also collected data on insider or outsider status and prior work experience, including company and role tenure, job titles held, position level in the organization, and functional responsibility. For experience with the current company, we collected data on the new CEO’s four most recent roles; for prior company experiences, we collected data for up to two roles within up to two companies. In addition, where available, we collected data on international experiences and other notable accomplishments and positions held. For the CEO’s prior employers, we captured company and performance data from Bloomberg.

The career-path data includes CEOs — both interim and in full capacity — who were in position as of January 3, 2009. It also includes multiple CEOs for the same company if multiple succession events occurred in 2008. The career-path data excludes interim CEOs who were replaced by an official CEO before the end of 2008.

Regionally adjusted average growth rates of total shareholder returns (TSRs), including the reinvestment of dividends (if any) for each executive’s tenure, were calculated for the entire tenure, the first and second halves of the tenure, the first two years, and the final year. TSR data for company and corresponding region was provided by Thomson Financial.

This is the 11th data-year study of CEO succession. We have data points and data on more than 3,000 successions total and 960 successions resulting from board disagreements or poor financial or managerial performance.

Reprint No. 09206

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  1. Corporate Leadership Council, “Creating Talent Champions, Volume I” (2008) and “Hallmarks of Leadership Success” (2003), Corporate Executive Board: The source of research on leadership development.
  2. Cyrus Friedheim, “Commit and Deliver,” s+b, Spring 2006: Reflections on the challenges of being an incoming CEO.
  3. Per-Ola Karlsson, Gary Neilson, and Juan Carlos Webster, “CEO Succession 2007: The Performance Paradox,” s+b, Summer 2008: Last year’s study shows that even those chief executives who deliver subpar returns show unexpected staying power.
  4. Thomas Neff and Julie Hembrock Daum, “The Empty Boardroom,” s+b, Summer 2007: The most desirable board members have always been those with CEO experience, but they’re in short supply.
  5. For more business thought leadership, sign up for s+b’s RSS feed.
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