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 / Summer 2011 / Issue 63(originally published by Booz & Company)


CEO Succession 2010: The Four Types of CEOs


The 2010 CEO Succession study identified the world’s 2,500 largest public companies as measured by their market capitalization (per Bloomberg) on January 1, 2010. Booz & Company research team members based in India, China, Romania, Chile, the United Arab Emirates, Italy, France, and the United States then identified the companies among the top 2,500 that had experienced a chief executive succession event and cross-checked data using a wide variety of printed and electronic sources in multiple languages. For a listing of companies that had been acquired or merged in 2010, we again used Bloomberg. In considering relative market capitalization, we did not adjust for currency exchange rate fluctuations, which have an insignificant effect over time because they quickly adjust to market reality. (We also note that China’s currency is pegged to the U.S. dollar.)

We investigated each company that appeared to have changed its CEO to confirm that a succession event occurred in 2010, and for the 291 confirmed companies, we compiled demographic, career, and governance structure details on both outgoing and incoming CEOs (as well as any interim chief executives), including age, tenure, title, career path, prior experience, education, and chairmanship, among others. In the analysis of CEO succession by tenure of outgoing CEO (Exhibit 6), insider/outsider status (Exhibit 7), and CEO background (Exhibit 9), we excluded turnover events involving interim-appointed CEOs, and those resulting from mergers and acquisitions.

We accepted company-provided information for all data elements except for the reason for the succession. For that, we consulted outside press reports and other independent sources.

Total shareholder return data for a CEO’s tenure was sourced from Bloomberg and includes reinvestment of dividends, if any. Company return data was then regionally market-adjusted (against the return of the local regional index over the same time period) and annualized.

Corporate core classification of each of the 291 companies experiencing a succession event in 2010 was based on multiple factors (e.g., number and diversity of business units, degree of shared activities, number and percentage of top-line versus functional managers), as well as Booz & Company expertise on industry and geographic operating models.

To distinguish between mature and emerging economies, we followed the United Nations’ Human Development Index 2010 ranking, which classifies countries with a score above 0.788 as “very high.” Mature economies include South Korea, Australia, the Czech Republic, Poland, and Hong Kong; emerging economies include Turkey, Saudi Arabia, Mexico, and South Africa. For the purposes of this study, Hong Kong and Macau are classified as separate from China.

Reprint No. 11207

Author Profiles:

  • Ken Favaro is a senior partner with Booz & Company based in New York. He leads the firm’s work in enterprise strategy and finance.
  • Per-Ola Karlsson is a senior partner with Booz & Company based in Stockholm. He is managing director of the firm’s European business.
  • Gary L. Neilson is a senior partner with Booz & Company based in Chicago. He focuses on operating models and organizational transformation and is a leader of the firm’s work on organizational DNA.
  • Also contributing to this article were Booz & Company Senior Associates Alexis Bour and Kenji Chikada and s+b contributing writer Tara A. Owen.
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  1. Gary Neilson, Etienne Deffarges, Paul Kocourek, and John Elting Treat,  “Putting Headquarters in Its Place: The New, Lean Global Core,” Booz Allen Hamilton white paper, 1999: This and other Booz & Company research covers reorienting your corporate core model.
  2. Ken Favaro, Per-Ola Karlsson, Jon Katzenbach, and Gary L. Neilson, “Lessons from the Trenches for New CEOs: Separating Myths from Game Changers,” Booz & Company white paper, January 2010: The practices that will substantially contribute to success for new CEOs.
  3. Ken Favaro, Per-Ola Karlsson, and Gary L. Neilson, “CEO Succession 2000–2009: A Decade of Convergence and Compression,” s+b, Summer 2010: Last year’s study documented a decade’s worth of CEO succession trends and noted how governance norms are converging and the job of the CEO is compressing, in terms of both tenure and capacity.
  4. Bruce A. Pasternack and Albert J. Viscio, “The Centerless Corporation: A Model for Tomorrow,” s+b, Third Quarter 1998: Introduces and explains the four corporate models.
  5. Inside the Kraft Foods Transformation,” introduced by Chairman and CEO Irene Rosenfeld, s+b, Autumn 2009: Insider’s view of a company moving from an operationally involved to a strategically managed model.
  6. For more on this topic, see the s+b website at:
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