Using This Report
CEO Succession Practices annually documents and
analyzes succession events of chief executive officers (CEOs)
of S&P 500® companies. In addition to updates on historical
trends, each edition of this report features discussions of
the most notable cases of CEO succession that took place
in the calendar year prior to publication (based on press
announcements and other publicly available information),
as well as the results of a survey of corporate secretaries
and general counsel on the succession oversight practices
of their boards. This edition’s survey was administered in
the fall of 2013 by The Conference Board.
Part I: CEO Succession Trends (2000–2013) illustrates
year-by-year succession rates and examines the evolution
of certain aspects of the succession phenomenon—
including the influence of firm performance on succession
and the characteristics of the departing and incoming
CEOs. When appropriate, the report compares emerging
trends in chief executive successions with data available
from the 1970s, 1980s, and 1990s to provide a broader
historical perspective. Cases of CEO succession were
identified using extensive searches of corporate press
releases on the investor relations section of S&P 500
company websites. Each member of the S&P 500 index
(at any point in time in 2013) was searched for certain
succession-related keywords (specifically: retire, retires,
retirement, succession, succeeding, succeeded, succeed,
elect, elected, new chief executive, tenure, resign, resigned,
depart, departure, and departed). For each identified
case, the analysis used financial data retrieved from the
Compustat® Executive Compensation (ExecuComp)
database and The Center for Research in Security Prices
(CRSP) US Stock Database, which were accessed through
Wharton Research Data Services (WRDS). Additional
information was gathered from corporate press releases.
Part II: CEO Succession Practices (2013) is divided
into two sections. The first section, “Board Practices in
CEO Succession Planning,” details board practices in
CEO succession planning based on data from a survey
of corporate secretaries, general counsel, and investor
relations officers conducted by The Conference Board in
collaboration with Stanford Graduate School of Business
(GSB) and The Institute of Executive Development (IED).
TECHNICAL NOTES
The Conference Board CEO Succession
Practices classifies companies in several
ways, including by industry (using broad
industry definitions from the Standard
Industrial Classification system), CEO
age, and company financial performance
(based on stock returns).
Means and percentages in this report are
descriptive, not prescriptive, and have
been used to identify the latest practices
and emerging trends. Unless otherwise
specified, figures reported in the
commentary refer to mean (or average)
survey results.
When reference is made to the S&P
500, most of the corresponding charts
illustrate findings by referring to both
the number of companies and the
percentage of the total sample. To avoid
confusion in the review of these two
sets of information, the reader should be
aware that the composition of the S&P
500 varies, depending on the number of
companies added and removed from the
www.conferenceboard.org
index and data availability constraints.
The apparent discrepancy between
the number of companies and sample
percentages reported in certain instances
is therefore due to the actual number
of companies in the S&P 500 index that
were examined at a particular point in
time. Chart 1, on page 12, is based on the
aggregate number of S&P 500 companies
examined for the purpose of this study in
each year of the sample period.
Cases of CEO succession were identified
using extensive searches of corporate
press releases on the investor relations
and media sections of S&P 500 company
websites. This search process is then
cross-checked against a variety of
outside sources, including information
from the National Association of
Corporate Directors (NACD), Spencer
Stuart, and the Compustat Executive
Compensation (ExecuComp) database.
For each identified case, the analysis
used financial data retrieved from
ExecuComp and The Center for Research
in Security Prices (CRSP) US Stock
Database, which were accessed through
Wharton Research Data Services (WRDS).
Additional information was gathered from
corporate press releases.
None of the commentaries included
in this report should be viewed as
a recommendation on planning or
administering a CEO succession process,
which, for its complexity, does not lend
itself to generalizations. For this reason,
as mentioned above, The Conference
Board recommends that companies
develop a plan for CEO succession with
care, after considering the specific
circumstances each organization faces in
the current marketplace, including overall
strategic priorities and future business
needs. In some instances, the underlying
data retrieved from the databases listed
above are modified across time. The
report revises and notes prior years’
information when such changes arise.
Research Report ceo succession Practices: 2014 Edition
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