GlobeNewswire

CEO turnover at record high; successors following long serving CEOs struggling according to PwC’s Strategy& Global Study

Share

NEW YORK, May 15, 2019 (GLOBE NEWSWIRE) -- CEO turnover hit a record high of 17 percent in turbulent 2018 but there is a group of executives holding steady according to the 2018 CEO Success study released today by Strategy&, PwC’s strategy consulting business. The study, which analysed CEO successions at the world’s largest 2,500 public companies over the past 19 years reports that while the median tenure of a CEO has been five years, 19 percent of all CEOs remain in position for 10 or more years, consistently, over the time period analysed.

Despite disruption, intense competition and eager investors, the median tenure within the group is 14 years with these long serving CEOs who also have better performance, and are less likely to be forced out than not long serving CEOs. By region, North American CEOs hold a significant margin in the probability of becoming a long term CEO at 30 percent, followed by Western Europe at 19 percent, Japan and the BRI countries (Brazil, Russia and India) at nine percent and China at seven percent.

2018 also showed a rise in the share of CEOs who were forced out of their positions for ethical lapses. In fact, more CEOs (39 percent) were forced out for ethical lapses rather than financial performance or board struggles, a first in the study’s history.  This number rose 50 percent as compared to 26 percent in 2017.

Rough road ahead
Successors to long serving CEOs are not faring as well as they are likely to have shorter tenures, worse performance and more often forced out of office than the CEOs they replaced. Nearly half of successor CEOs moved down a performance quartile or more as compared to their predecessors. 69 percent of successors who replaced a long serving CEO in the top performance quartile ended up in the bottom two performance quartiles.

“Succeeding long-serving CEOs is clearly very challenging,” said Per-Ola Karlsson, partner and leader of Strategy&’s Organization, Change and Leadership Practice in the Middle East. “Their successors typically both deliver lower returns to shareholders and are noticeably more likely to be dismissed than the legend they succeeded as well as their peers.”

CEO turnover in 2018
Turnover among CEOs at the world’s 2,500 largest companies soared to a record high of 17.5 percent in 2018 — 3 percentage points higher than the 14.5 percent rate in 2017 and above what has been the norm for the last decade.

CEO turnover rose notably in every region in 2018 except China, and included a large increase in Western Europe. Turnover was highest in “other mature” economies (such as Australia, Chile, and Poland), at 21.9 percent, and nearly as high in Brazil, Russia, and India (21.6 percent). The next-highest turnover numbers were in Western Europe (19.8 percent), and the lowest were in North America (14.7 percent).

Among industries, turnover was highest in communication services companies (24.5 percent), followed by materials (22.3 percent) and energy (19.7 percent). Healthcare saw the lowest rate of CEO turnover in 2018, at 11.6 percent

Women at the Top
The share of incoming women CEOs was 4.9 percent down slightly from the record high of 6.0 percent in 2017.  However, the trend has been upward since the low point of 1.0 percent in 2008.  Unlike in 2017 when the record high was driven by a 9.3 percent spike in incoming CEOs in the US and Canada, the largest percentages in 2018 originated in Brazil, Russia, India and China and other emerging countries. The utilities industry had the largest share of women CEOs at 9.5 percent followed by Communication Services and Financial Services at 7.5 and 7.4 percent respectively. 

About the 2018 CEO Success Study

  1. Over the course of the past 19 years, Strategy& has been tracking continuous data on CEO successions. The 2018 study analysed CEO successions at the world’s 2,500 largest (by market capitalization) public companies over the last 10 years. We define dismissals for ethical lapses as the removal of the CEO as the result of a scandal or improper conduct by the CEO or other employees; examples include fraud, bribery, insider trading, environmental disasters, inflated resumes, and sexual indiscretions.
     
  2. For the purposes of this study and to distinguish between mature and emerging economies, Strategy& followed the United Nations Development Programme 2018 ranking. Total shareholder return data over a CEO’s tenure was sourced from Bloomberg and includes reinvestment of dividends (if any). Total shareholder return data was then regionally market adjusted (measured as the difference between the company’s return and the return of the main regional index over the same time period) and annualized.

About Strategy&
Strategy& is a global strategy consulting business uniquely positioned to help deliver your best future: one that is built on differentiation from the inside out and tailored exactly to you. As part of PwC, every day we’re building the winning systems that are at the heart of growth. We combine our powerful foresight with this tangible know-how, technology, and scale to help you create a better, more transformative strategy from day one.

As the only at-scale strategy business that’s part of a global professional services network, we embed our strategy capabilities with frontline teams across PwC to show you where you need to go, the choices you’ll need to make to get there, and how to get it right.

The result is an authentic strategy process powerful enough to capture possibility, while pragmatic enough to ensure effective delivery. It’s the strategy that gets an organization through the changes of today and drives results that redefine tomorrow. It’s the strategy that turns vision into reality. It’s strategy, made real.

For more information, visit Strategy&.

© 2019 PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details.

Contact:
Rachel Hambrick
Global Communications
T: +1 213 479 4129
rachel.k.hambrick@pwc.com

About GlobeNewswire

GlobeNewswire
GlobeNewswire
One Liberty Plaza - 165 Broadway
NY 10006 New York

https://globenewswire.com

GlobeNewswire is one of the world's largest newswire distribution networks, specializing in the delivery of corporate press releases financial disclosures and multimedia content to the media, investment community, individual investors and the general public.

Subscribe to releases from GlobeNewswire

Subscribe to all the latest releases from GlobeNewswire by registering your e-mail address below. You can unsubscribe at any time.

Latest releases from GlobeNewswire

GAM Holding AG: Interim management statement for the three-month period to 30 September 201917.10.2019 07:00:00 CESTPress release

17 October 2019 PRESS RELEASE GAM Holding AG: Interim management statement for the three-month period to 30 September 2019 Group assets under management (AuM), including investment management and private labelling, totalled CHF 135.7 billion1 as at 30 September 2019, down from CHF 136.1 billion2 as at 30 June 2019 Investment Management AuM of CHF 51.1 billion1 as at 30 September 2019 were 2% lower compared to 30 June 2019, driven by net outflows of CHF 1.4 billion, partly offset by positive market and foreign exchange movements of CHF 0.4 billion Net outflows recorded in August driven by client risk off sentiment with positive net inflows in July, while September remained flat Investment performance remains strong with 69% and 73% of AuM in funds outperforming their respective benchmarks over the three- and five-year periods Private Labelling AuM of CHF 84.6 billion1 as at 30 September 2019 were 1% higher compared to 30 June 2019, driven by net inflows of CHF 0.3 billion and positive n

Prosafe SE: Operational update Q3 201917.10.2019 07:00:00 CESTPress release

The fleet utilisation rate in the third quarter of 2019 was 48.2 per cent (Q3 2018: 48.1 per cent). Safe Caledonia completed a four-month contract for a major oil and gas operator in the UK sector on 18 August 2019 and is currently laid up in the UK. On 31 July 2019, Prosafe signed a contract with Total for the Safe Caledonia to provide accommodation support at the Elgin complex in the UK sector of the North Sea. The firm duration of the contract commencing mid-April 2020 is 162 days with one 30-day option. Safe Boreas continued the contract with Equinor at the Mariner installation in the UK and was in full operation throughout the quarter. On 16 August 2019, Equinor exercised the fourth of six one-month options extending the contract’s firm period through October 2019. Safe Zephyrus has been operating at the Clair Ridge platform West of Shetland for BP since 14 May 2019 and was in full operation during this quarter. The contract was completed on 14 October 2019. Safe Concordia is at a

AMG Advanced Metallurgical Group N.V. Subsidiary AMG Vanadium Honored with Award for Environmental Stewardship from Marathon Petroleum17.10.2019 07:00:00 CESTPress release

Amsterdam, 17 October 2019 --- AMG Advanced Metallurgical Group N.V. ("AMG", EURONEXT AMSTERDAM: "AMG") today announced its subsidiary, AMG Vanadium, has been awarded the 2018 Environmental Stewardship Award from Marathon Petroleum Corporation (MPC) for extraordinary environmental stewardship and business performance. The Environmental Stewardship Award recognizes significant efforts in minimizing the environmental impact or delivering ways to reduce the footprint of Marathon Petroleum’s operations. MPC’s fourth annual Supplier Recognition Awards ceremony was held recently in San Antonio, Texas. At the event, Marathon Petroleum recognized its top suppliers from among more than 15,000 suppliers with which it does business. AMG Vanadium, a recycling partner of resid spent catalyst from MPC’s Galveston Bay refinery, was among a small group of suppliers to receive special recognition for extraordinary performance in the area of environmental stewardship. Hoy E. Frakes, Jr., President of AM

SBM Offshore completes US$1.14 billion financing of Liza Unity16.10.2019 18:38:00 CESTPress release

October 16, 2019 SBM Offshore is pleased to announce that it completed the project financing of FPSO Liza Unity for a total of US$1.14 billion. The project financing was secured by a consortium of nine international banks. The Company expects to draw the loan in full, phased over the construction period of the FPSO. The financing will become non-recourse once the FPSO is completed and the pre-completion guarantees have been released. The project loan has a tenor of two years post completion, in line with the duration of the charter, and carries a variable interest cost of LIBOR plus 1.50%. The Liza Unity FPSO design is based on SBM Offshore’s industry leading Fast4Ward® program as it incorporates the Company’s new build, multi-purpose hull combined with several standardized topsides modules. The FPSO will be designed to produce 220,000 barrels of oil per day, will have associated gas treatment capacity of 400 million cubic feet per day and water injection capacity of 250,000 barrels pe

DNO ASA: Mandatory Notification of Trade16.10.2019 16:59:00 CESTPress release

Oslo, 16 October 2019 - DNO ASA, the Norwegian oil and gas operator, has today purchased 1,100,000 own shares at an average price of NOK 12.4948 per share. Following this transaction, DNO holds 76,600,000 own shares. -- For further information, please contact: Media: media@dno.no Investors: investor.relations@dno.no -- DNO ASA is a Norwegian oil and gas operator focused on the Middle East and the North Sea. Founded in 1971 and listed on the Oslo Stock Exchange, the Company holds stakes in onshore and offshore licenses at various stages of exploration, development and production in the Kurdistan region of Iraq, Norway, the United Kingdom, Netherlands, Ireland and Yemen. This information is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.