CEOs and CFOs by the numbers
Despite a drive to bring younger professionals into the C-Suite, the average age of CEOs continues to rise.
Last October, Morrissey Goodale took a look at who is leading the AE industry by doing a deep dive on the CEO demographics of the 2022 ENR Top 500 firms in “Here’s Who’s Running the AE Industry—By the Numbers.” What did we find? The average CEO was a 57-year-old man who had been with his firm for 24 years, with half of that time spent as CEO. There was a 50/50 chance he had a master’s degree in addition to his undergraduate professional degree. In all likelihood, he did not have a business degree.
Mark Goodale’s article this week is “Short-Term vs. Long-Term Thinking—What’s the Right Balance?” One of the topics that perennially occupies both of those spaces in the CEO brain is succession planning—for themselves and their teams. It’s consistently one of the front-and-center items we experience in our strategy work for clients. And it’s the classic “a journey of a thousand miles begins with a single step” item. You’re planning for an outcome 10 years ahead, but you have to make progress daily in small, meaningful acts and interactions. A good way to mark progress is an annual review.
So, with the release this April of the 2023 ENR Top 500 list, we thought it would be good to check back and see how the leadership demographics in the industry had changed—if at all—over the past year. How have we done as an industry in terms of passing the baton? Is there less gray hair in the C-suite? Maybe more diversified? And while we were at, we decided to take a look at what the typical CFO looks like in the industry. Here’s what we found, by the numbers:
58: That’s the average age of an ENR Top 500 CEO. That’s up from 57 last year. Not exactly an encouraging sign that a lot of leadership transitions took place over the last year. The youngest CEOs (average age 57.5) are to be found in the ENR Top 100 cohort. The oldest CEOs (average age 59.5) are in the 301-400 tranche. Interestingly, CEOs at private equity-backed firms are on average (barely) younger (56) than their peers at employee-owned/ESOP firms (average age 58) or publicly traded firms (average age 60.5). The oldest industry CEO is in his 80s, the youngest in the mid-30s.
52: That’s the average age of an ENR Top 500 CFO. CFOs pride themselves on consistency and reliability. And that’s reflected in how they are represented in the industry. Regardless of firm size or capital structure, there is practically no variation in CFO ages—they all fall between a tight band of 51 and 54 years old. We’re a mature industry with mature leadership at the helm and writing the checks (with a high probability of having Yacht Rock Radio programmed on their SiriusXM).
25.6: That’s the number of years the average CEO has been with their firm. Not surprisingly given the previous point about an increase in average age, this indicator is also up from last year’s average of 24. Industry leaders got a little longer in the tooth over the past year. The group of “newest” CEOs are in the 1-100 cohort (average of only 22 years with their current firm) while the 301-400 tranche once again yielded the CEOs who have been with their firms the longest (average of 28 years—almost the same as a standard mortgage). CEOs of publicly traded firms have been with their firms for an average of 17 years, almost a decade less than their peers at employee-owned/ESOP firms (average of 26 years) and marginally less than their counterparts at private equity-backed firms (average of 20 years). The most loyal CEO has been with their firm for over 50 years!
12.5: That’s the number of years the average CFO has been with their firm. It’s half the amount of time their boss has been there. So, they are still relative newbies. Interestingly, CFOs of private equity-backed firms have been with their firms just over seven years, shorter than their peers at publicly traded firms (average of nine years) and employee-owned ESOP firms (13 years).
12: That’s how many years the average industry CEO has been at the helm of their firm—up from 10 last year. This continues the theme of little, if any, C-suite leadership transition over the past year. On average, CEOs in the ENR Top 100 have been in the job the least amount of time (7.5 years), while those in the 301-400 cohort have the longest tenure on average at 16 years. CEOs at publicly traded firms have relatively short average tenures in the driver’s seat (7.5 years), compared with their counterparts at private equity-backed firms (9.7 years) or employee-owned/ESOP firms (12.5) years.
9.5: That’s how many years the average industry CFO has been in their position overseeing their firm’s finances. There’s quite a range in this tenure depending on a firm’s capital structure. CFOs at publicly traded firms have an average tenure of just under four years while those at employee-owned/ESOP firms have been relentlessly saying “no” to extravagant company parties and requests for new computers for an average of 10 years.
9%: The percentage of female industry CEOs. This is stuck at last year’s level. If there was a big effort for gender diversity at the top of our industry, its results have yet to manifest themselves.
30%: This is the percentage of female industry CFOs—more than triple the percentage of female CEOs. In the 401-500 cohort this percentage reaches a high of 37%.
Older (and wiser?): Leadership at the industry’s top firms aged over the past year. Industry CEOs are now on average older than their counterparts in the Fortune 500 (57 years old) with an average tenure in the position that’s longer than their peers in the S&P 500 (10.2 years). The industry’s leadership now has less gender diversity than the Fortune 500 (10.4%). Twenty-five percent of the female CEOs in the Fortune 500 became their companies’ leaders in just the past year. Last year just 9% of the Fortune 500 CEOs were women. Interesting that that group is more diverse one year on, but our industry is not. Small steps, long journey.
You can reach Mick Morrissey at 508.380.1868 or email@example.com.