A few year-end notes for business owners who might be curious about the average CEO tenure in 2023. According to recent research from recruiting experts Zippia, CEOs don’t hang around as long as they used to.
- The average CEO tenure for the S&P 500 is 7.2 years.
- The median CEO tenure is 4.8 years.
- The average CEO tenure has decreased by 34% since 2017 (10.9 years).
- 39% of CEOs have a tenure that lasts between 1 and 5 years.
- The Finance and Insurance industry has had the longest average CEO tenure between 2001-2017, at 13 years on average.
This should be a wake-up call for companies about the dire need to have a definitive CEO succession plan in place. According to Teamshares, nearly two-thirds of family businesses do not have a documented and communicated succession plan ready. Almost one third of large U.S. company boards have no emergency CEO succession plan according to findings from executive search firm Spencer Stuart.
Research has shown that companies with well-communicated CEO succession plans in place have higher employee satisfaction and retention, and are 91 percent more likely to outperform their industry peers. So given the overwhelming data, the only question that remains is why wouldn’t you? Our advice: kick off 2024 with a viable and transparent succession plan for your next CEO or business owner. It’s a great resolution for a successful start to the New Year!
— Chuck Lew
