CEOs are facing mounting pressure to deliver—or increasingly risk being shown the door. The correlation is growing between total shareholder returns (TSR) and CEOs staying on the job: 42% of S&P 500 companies that changed CEOs in 2024 had a TSR that fell below the 25th percentile, indicating low performance. This share marks a steady increase from 30% in 2017.
That is according to a new report by The Conference Board, ESGAUGE, Heidrick & Struggles, and Semler Brossy. The study examines several aspects of CEO succession, including a gender analysis: While the share of women CEOs has grown, the vast majority (69%) of incoming female CEOs are being hired by smaller firms with less than $5 billion in revenue. Only one appointment was made at a company with over $25 billion in revenue.
The study also reveals that CEOs are staying in their roles longer. For example, succession rates for those aged 64 and older dropped by 8% in 2024. “The fact that CEOs are staying longer may point to a ‘retirement cliff’ on the horizon. Boards need to refine their succession strategies to ensure they’re prepared for a potential wave of leadership transitions in the near future,” said Matteo Tonello, coauthor of the report and Head of TCB Benchmarking and Analytics at The Conference Board.
