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| American firms prefer younger CEOs: research |
| Press Trust of India / New York Apr 22, 2011, 15:23 IST |
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When it comes to taking over the management reins, American corporates seem to prefer young candidates already working in the company as chief executive officers (CEO) rather than outsiders, says research firm Equilar.
The research covered more than 381 of S&P index of 1,500 companies, which had hired CEOs between 2007 and 2009.
It found that 73% of the incoming CEOs were internal hires, meaning that they had worked for the company prior to their appointment as the CEO.
However, 24.9% of the CEOs were hired from outside the company. For the remaining 2.1% of firms, a former CEO returned to re-take the reins.
"An inside candidate offers the benefit of institutional knowledge and an understanding of the company's culture," the study noted.
Interestingly, the incoming CEO are on an average, younger than the executives they are replacing. It further said that departing chief executives are more likely to be in their 60s, while their successors are often in their 40s or 50s.
The youngest person to step down from the CEO's role was 37 years old and the oldest was 88 years old. Among the new CEOs, the youngest person to take the reins was 29 years old, while the oldest was 70 years old.
The report noted that things were improving for women executives. As only 1.4% of the departing CEOs were female and 4.8% of the new CEOs were women.
In fact, 17 companies in the study saw a male step down as CEO, to be replaced by a female candidate. There were, however, two instances where a female CEO was the one departing and was replaced by a male CEO. There was only one company where a female CEO replaced another female CEO.
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