2015 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 OvErviEwFifty-one companies on the S&P 500 Index recorded the installation of a new chief executive in 2015. This means transitions among S&P 500 companies essentially stayed level with the previous year, suggesting a reversal of the overall decline seen from 2005 to 2010. Nearly one-third of these transitions took place in the third quarter of 2015.

why dO CEOs lEavE?Voluntary departure was the dominant explanation for CEO departures in 2015. Forty-two of the 51 transitions were attributed to either retirement or the CEO choosing to step down. 

CEO prOfilE The average age of outgoing CEOs was 62, while the average age of incoming CEOs was 53, both holding steady from last year. None of 2015’s new CEOs were women, while three women were among the outgoing chief executives.

ExtErnal vs. intErnal CandidatEsThe percentage of CEO successors who were promoted from within the company jumped to 84% in 2015.

All but five of the 43 internal CEO placements were the result of a planned succession. This percentage has risen steadily over the past three years.

Based on analysis and many years of experience, we know that many routes to the top exist. There are internally promoted CEOs and externally recruited CEOs. The CEO can also be hired as an insider-outsider, from the board or been the prior CEO of the company.

split vs. sharEd Chairman and CEO rOlEs86% of the new CEOs did not take on the role of chairman, similar to last year’s 87%.

Meanwhile, 49% of outgoing CEOs stayed on to serve as chairman of the board vs. 54% in 2014.

Note: This data looks at the companies that have experienced a CEO transition, as defined by the replacement of an outgoing CEO with a permanent CEO. Data includes names of incoming and outgoing CEOs; the reason for the new appointment/departure of the former CEO; the ages of both the outgoing and incoming CEO; and whether the appointment was an internal or external one. Prior to 2010, Spencer Stuart tracked CEO turnover, defined and recorded as any change in the CEO post. As of Jan. 1, 2010, we adjusted our methodology to track CEO transitions, defined as the change from a permanent outgoing CEO to a permanent incoming CEO. Open cases of turnover, defined as cases where no permanent CEO has been appointed, or cases where interim CEOs serve less than one year, are not included in year-end transition totals.

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201520142013201220112010200920082007200620052004

515253374943465458606761

S&P 500 CEO Transitions 2004 - 2015

401-50012%

301-40018%

201-30022%

101-20029%

1-10020%

Percentage of Transitions* by S&P 500 Company Range

*Percentages are rounded up

Reasons for CEO Transitions

Former CEO retiredFormer CEO stepped downCompany spinoffFormer CEO Company mergerCompany split

47%

35%

08%

6%

02%

02%

resigned

62average age of outgoing CEOs 53average age of incoming CEOs

201520142013201220112010200920082007200620052004

16 %

19 %

25%

27 %

22 %

23 %

28 %

19 %

21 %

23 %

34 %

34 %

84 %

81 %

75%

73 %

78 %

77 %

72 %

81 %

79 %

77 %

66 %

66 %

Internal External

50% 100%0%

CEO Successors: Internal vs. External Placements

Split RoleCombined CEO & Chairman

2009

89 %

11 %

2010

70 %

30 %

2011

80 %

20 %

2012

89 %

11 %

2013

94 %

6 %

2014

87 %

13 %

2015

86 %

14 %

100%

50%

0%

Is the New CEO Also the Chairman?

86%of companies chose to divide the roles of chief executive and board chair

49%of outgoing CEOs continued with the company in the role of chairman

CEO TransiTiOns2015

All S&P 500 groupings experienced turnover, with those in the 101-200 grouping recording the highest total at 15 cases, nearly one-third of all recorded transitions. One year ago, the highest number of transitions occurred in the 1-100 range.

2012-2015(193 companies)

74%3%2%7%14%

2008-2011(192 companies)

72%2%3%6%16%

2004-2007(246 companies)

63%4%4%7%22%

InternalInsider-OutsiderFormer ExecutiveFrom BoardExternal

Internal/External Candidates: A More Granular Look

Note: Percentages are rounded up