Short-lived (and Young!) at the Top

Wally Bock, talented and prolific essayist and keen business observer, brought to our attention a Booz Allen Hamilton study of the careers of large company CEOS.

It found that between 1995 and 2001:

+ Turnover of the CEOs of major corporations increased by 53 percent

+ The number of CEOs departing because of the company's poor financial performance increased by 130 percent

+ The average tenure of CEOs declined from 9.5 years to 7.3 years

+ Turnover among European CEOs is increasing twice as fast as turnover in North America

+ CEOs are entering and departing office at a younger age; in the West, the average CEO rises to office before his or her 50th birthday. In North America in 1995, the average starting age of CEOs was 50.4; in 2001 it was 48.8. In Europe, the average starting age of CEOs was 52.3 in 1995; 49.4 in 2001. The exception to the rule is found in Asia, where the average starting age of CEOs was 57.0 in 1995; 60.4 in 2001.

+ The frequency of CEO "succession events," (e.g., the departure of one CEO and the accession of another) nearly doubled, from 6% of the largest 2,500 global companies per year in 1995 to 11.2% in 2000. Although the number dipped in 2001, the frequency of succession is still more than 50% higher than in 1995.

+ When CEOs are dismissed for performance issues, their tenure is 5.4 years on average. CEOs terminated for performance reasons last 5.6 years in North America, while their European counterparts actually have a shorter span — 4.8 years on average.

+ European CEOs are more likely to be removed for poor job performance than North American CEOs — 34% of the departures in Europe compared with 22% in North America

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