boozco ceo succession study 2011 extended study report

7/28/2019 BoozCo CEO Succession Study 2011 Extended Study Report

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CEO Succession Report12th Annual Global CEO Succession Study

Perspective Ken FavaroPer-Ola KarlssonGary Neilson


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Authors: New York Ken FavaroSenior Partner+1-212-551-6826

[email protected] StockholmPer-Ola KarlssonSenior [email protected] ChicagoGary NeilsonSenior [email protected]

Media Contacts:

Abu DhabiJoanne [email protected]+961-1-985-655

AmsterdamMonique [email protected] LondonHarriet [email protected] MunichSusanne [email protected] New York Margaret [email protected] Shanghai

Michelle [email protected] Sydney Kristine [email protected]+61-2-9321-1931


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EXECUTIVESUMMARY

CEO turnover rates return to historical levels

As the worldwide economy recovers, the number of companiesappointing new chief executives has risen to rates last seen during thepre-recession years. In 2011, 14.2 percent of CEOs at the worlds top2,500 companies were replaced. That number is sharply higher thanthe previous years turnover rate of 11.6 percent, yet representative of the historical seven-year average of just over 14 percent.

Challenges for the new executive class

Following the stagnant economic growth that occurred during therecent recession, CEOs in this class face high expectations and newchallenges. Boards are increasingly seeking new leaders to help drivegrowth in a recovering global economy, which places a distinct burdenon those newly elevated CEOs to prove themselves early in theirtenure. Many CEOs took over large companies, companies in sectors

facing disruptive market forces, and companies headquarterd inemerging markets.

CEO turnover rate was highest at the largest companies

CEO turnover rate was highest among the top 250 companies bymarket capitalization just over 14 percent on average per year overthe last 12 years, and nearly 2 percent higher than companies ranked2512,500 by market capitalization from 2000 to 2011.

M&A-related turnover is traditionally higher among smallercompanies; 2.2 percent of turnover among the bottom 2,000companies stems from consolidation, compared to 1.3 percent at the

top 100 companies.

Turnover was highest in sectors that faced disruptive market forces

Turnover rates in the energy, telecom, and utilities sectors were 19,18, and 16 percent, respectively.

In the diversi ed industry, leadership changes took place at a rate of only 6 percent.

Continued on page 4


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Many turnover events occurred in emerging markets

Since 2006, the number of companies among the top 2,500 based inBRIC and other emerging countries has more than doubled, risingfrom 10 percent in 2006 to 25 percent in 2011.

Turnover among companies based in Brazil, Russia, and India took

place at a rate of 22 percent, while the rate in the U.S., Canada, andwestern Europe was approximately 13 percent in 2011.

CEO turnover at Chinese companies was only 7 percent in 2011.

Valuing prior CEO experience and new insights

As the market stabilized in 2011, companies consistently turnedto CEOs from outside the company to grow and develop theirorganizations. Though the number of outsider CEO appointments issigni cantly higher than it was ve years ago, insider CEOs continueto perform better, bringing higher shareholder returns and servinglonger tenures.

Outsider CEO appointments maintain historical average

In 2011, 22 percent of new CEOs came from outside theirorganization, compared to just 14 percent in 2007, which was ahistorically low rate.

Insiders continue to bring higher returns

In 2009-2011, outgoing insider CEOs delivered a 4.4 percentshareholder return above regional market index, compared to just a0.5 percent higher return from outsider CEOs overall.

Insiders serve longer tenures

Over the last 12 years, outgoing insider CEOs had served theircompanies for an average of 7.6 years, while outgoing outsiders hadserved for an average of just 5.6 years.

An insider CEO is nearly six times as likely to serve a company fornine or more years. Of the CEOs who have served for nine or moreyears, 85 percent have risen from within their companies.

The chairmanCEO relationship continues to evolve

Many companies recognize the pressures facing a new CEO andrespond by following an apprenticeship model, appointing theoutgoing CEO as chairman to guide the incoming CEO. Conversely,the practice of a combined chairmanCEO appointment has declined,suggesting companies are responding to corporate governance requests.

Continued on page 5


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Companies continue to follow apprentice model

In North America, 37 percent of CEOs leaving after a plannedsuccession event are appointed to chairman to act as a guide tothe new executive.

In Japan, the apprenticeship practice is much more frequent; 63

percent of companies appoint the outgoing CEO chairman. In Europe, only 17 percent of companies appoint the outgoing

CEO chairman.

Chairman appointments are much more common among outgoinginsider CEOs; 30 percent are appointed to lead the board. Only 18percent of outgoing outsider CEOs are appointed to the role.

Despite a slight increase in 2011, the combined chairmanCEOappointment has been declining over the past decade

In North America, the frequency of combined appointments hasdeclined from 40 percent in 2000 to just 18 percent in 2011.

In Europe, the frequency of combined appointment has droppedfrom 53 percent in 2000 to just 17 percent in 2011.

Continued on page 6


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Top pieces of advice for CEOs going into their rst yearfrom CEOs who have been there1. Deal with the obvious executive team changes as early as possible

2. Be wary of changing strategy too quickly, even if you think thecurrent strategy is wrong

3. Make sure you understand how every part of the company operatesand how it is performing

4. Build trust through transparency

5. Be selective in listening to advice

6. Find a sparring partner with whom you can discuss plans openly

7. Manage your time and your personal life with care

Continued on page 7


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First year at the top: From the mouths of the CEOs

As part of the annual study on CEO succession, Booz & Companyconducted interviews with 18 CEOs across a variety of industries toask what advice they had for the incoming class. Among many othersuggestions, executives encouraged the new class to make necessarypersonnel changes swiftly in their new roles but to change strategyslowly while establishing trust through transparency.

Continued on page 8


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For Andre-Michel Ballester , whowas promoted from the inside to runSorin Group , a Milan-based makerof medical devices, moving quicklywas vitalthe immediate task was torestructure the unpro table company,selling two of ve divisions andcreating a very different corporateculture as soon as possible. The rstissue is to create a leadership team veryquickly, making decisions on who arethe keepers and who are the leavers inthe rst few weeks, says Ballester.

Ronnie Leten became CEO of Swedish equipment manufacturerAtlas Copco in 2009, in the midst of the economic downturn. My rstthought on becoming CEO, he says,was to make sure we kept going, keptvisiting the customers, safeguarded thebusiness, and saved all the areas thatneeded to be saved. Leten knew hehad some restructuring to do to adaptto the new circumstances, but he didntwant to confuse the organization. Hisadvice: Dont jump to conclusionsimmediately. Take the time to lookaround so you can get a full overviewof the entire situation.

I was looking for somebody whocould literally teach me, and I found avery senior pharmaceutical executivewhom I knew from the past, and whohad retired in the meantime. He hadenormous expertise in the area, but hewas also known to be able to explainthings in straightforward terms. Icontacted him and he was very helpful even excited to help me.Roches Severin Schwan

Dont listen too much to external advice,says Ian Livingston , CEO of BT Group .

The truth be told, youve got to makeyour own call. Its your decision, and mosteveryone actually knows that.

Theres always some sort of crisis inthe CEOs rst yearsomething thatprobably led the former CEO to leaveand it is key to initially focus exactlyon the issues related to that crisis, says

Jos Ricardo Mendes da Silva , CEO of Ach Laboratrios Farmacuticos SA ,a leading pharmaceutical rm based inSo Paulo.

Strategy should be thought of simply,says Osman Sultan , CEO of the UAEs

du Telecom ; Where are we today, andwhere do we want to go?

You cannot have two different culturesin an organization," says AhmadAbdulkarim Julfar, Group CEO of Etisalat. "It has to be one culture,from the top of the hierarchy all theway down. You cant have one cultureat the board and a different culture inmanagement, because the managementneeds to be tightly linked to the board,and the board needs to be an extensionof management.


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ETAILE ATAA ALYSIS

CEO turnover rates are on the rise

In 2011, turnover rates rose from 11.6 percent to 14.2 percentamong the CEOs of the worlds top 2,500 companies.

Though the rise from 2010 to 2011 is signi cant, it is largelyconsistent with turnover rates between 2004 and 2009, a relativeplateau prior to the decrease witnessed in 2010.

Continued on page 10

CEO Turnover Rate by Succession ReasonCEO Turnover Events as % of Top 2,500 Public Companies

T u r n o v e r

R a

t e

16%

14%

12%

10%

8%

6%

4%

2%

0%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

12.9%

10.9%10.8% 9.8%

14.7%15.4%

14.4%13.8%

14.4% 14.3%

11.6%

6. 4% 6 .0 % 5.0% 5.3% 7.7% 9.2% 6.6% 6.8% 7.2% 9.1% 7.7% 9.8%

3.4%2.4%

4.4% 3.2%

4.5%

3.6%

4.6% 4.2%5.1%

3.4%

2.2%

3.2%

2.4% 1.4%1.3%

2.5%2.6%

3.2%2.8%

2.2% 1.8%

1.8%

2.2%

2.2%

Planned Forced M&A

14.2%


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CEO turnover rates are on the rise (Continued)


Over the last decade, turnover has decreased during recessionyears. This suggests that boards are more likely to keep their chief executives during times of economic uncertainty in order to maintainstability, but are more willing to make a leadership change wheneconomic stability returns and company outlooks improve.

30%

20%

10%

0%

-10%

-20%

-30%

-40%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

CEO Turnover Rate vs. MSCI World Index Market PerformanceChange Compared to Year 2000

% C

h a n g e c o m p a r e

d t o y e a r

2 0 0 0

CEO turnover rates trended downward during global recession years

CEO Turnover Rate Recession YearsMSCI AC World Local Index


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Larger companies face higher CEO turnover rates


Turnover was highest among the top 250 companies by marketcapitalization, a trend that has held steady from years past.

Turnover stemming from M&A was much more common amongsmaller companies, which are more susceptible to consolidation.

Forced turnovers were most common among large companies. Theforced turnover rate was more than 4 percent among the top 250companies, compared with 3.5 percent at their smaller counterparts.

It would seem that the bigger the company, the shorter the CEOstenure. Certainly, it is particularly hardand exhaustingto run avery large corporation; given that dif culty, it is not surprising thatboards of big companies look more frequently for a new CEO.

Forced turnover is more prevalent among larger companies

M&A-related turnover is most prevalent among smaller companiesPlanned Forced M&A

Average CEO Turnover Rate by Market Cap Tierand Succession Reason: 20002011

CEO Turnover Events as % of Companies in Market Cap Tier

Top 100

101-250

251-500

Bottom 2,000

8.3%

7.6%

6.9%

6.3%

4.3% 14%

14.2%4.9% 1.8%

1.8% 12.3%3.6%

2.2% 12 .0%3.4%

1.3%


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CEO turnover is highest in the sectors that faced disruptive market forces


Turnover was highest in the rnergy sector this year; 19 percent of CEOs in this sector were replaced.

Telecom and utilities had high turnover rates of 18 percent and 16percent, respectively.

The three industries with greatest turnover typically faced disruptivemarket forces, resulting in more changes at the executive level.

Planned Forced M&A

2011 CEO Turnover Rate by Industry and Succession ReasonCEO Turnover Events as % of Companies in Industry

13%

2%

19%

4%

18%

13%

3%

2% 16%

11%

5%

1% 15%

11%

1%

3%

14%

10%

2%

2% 13%

9%

1%

3%

12%

10%

1%1%

11%

8%

2%

2%11%

6%

1%

4%

Energy Telecom Utilities Materials Industrials ConsumerStaples

ConsumerDiscretionary

Financials InformationTechnology

Diversified

6%

2%

2%

2%

Average14.2%


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CEOs of utilities and telecom companieshave been most likely to be dismissed


Forced CEO turnover among utilities and telecom companiesfrom 2000 to 2011 represented 43 percent and 40 percent,respectively, of all turnover events in those sectors, signi cantlyhigher than in other sectors.

Energy

Telecom

Utilities

Materials

Industrials

ConsumerStaples

ConsumerDiscretionary

Financials

InformationTechnology

50%

45%

40%

35%

30%

25%

13% 14% 15% 16% 17%0%

Average CEO Turnover Rate by Industry vs. Succession Reason: 20002011

( F o r c e d

t u r n o v e r s

) / ( p l a n n e

d +

f o r c e

d t u r n o v e r s

)

Turnover Rate (planned + forced + M&A)

Size of circle represents number of turnover events between 2000 and 2011

13.4% 12-year averageturnover rate

35.2% 12-year share of forced turnover events(excludes M&A events)


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Emerging countries boast a greater share of the worlds largest companies


Since the beginning of 2006, the proportion of companiesheadquartered in the BRIC and other emerging countries in the top2,500 companies by market capitalization has more than doubled,rising 133 percent, from 9.4 percent in 2006 to 24.6 percent at theend of 2011.

Since the start of 2006, the proportion of top 2,500 companiesheadquartered in western Europe dropped from 26 percent in 2006to 19 percent at the end of 2011.

The U.S. and Canada maintained an average 30 percent share of topcompanies, even during the recent recession.

Companies from emerging countries now account for one-thirdof all companies in the nancials sector and nearly 40 percent of companies in the materials sector.

Regional Breakdown of Top 2,500 Public Companies by Market Capitalization at January 1Companies from Emerging Economies as % of Top 2,500

30%

25%

20%

15%

10%

5%

0%2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

China Brazil, Russia, India Other emerging 1

1) Other emerging economies are Turkey, Saudi Arabia, South Africa, Mauritius, Nigeria, Mongolia, Kazakhstan, Egypt, etc.

+133%


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Growth in emerging markets brings new leadership


Turnover in 2011 among companies based in Brazil, Russia, andIndia took place at a rate of 22 percent, while the rate in the U.S.,Canada, and western Europe was just more than 13 percent.

China had only a 7 percent turnover rate.

2011 CEO Turnover Rate by Region and Succession ReasonCEO Turnover Events as % of Top 2,500 Companies

Planned Forced M&A

9.3%

1.6%

13.5%

2.6%

13.9%

9.7%

2.4%

1.8%

16.8%

12.6%

1.4%

2.8%

16.4%

10.4%

3.8%

2.2%

6.8%

5.1%

1.3%0.4%

22%

14.7%

4.4%

2.9%

11.3%

8.8%

0.4%2.1%

U.S./Canada Western Europe Japan Other MatureEconomies

China Brazil, Russia,India

Other EmergingEconomies

Average14.2%


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Outsider appointments maintain historical average


Though CEOs rising from within their companies make up thelargest proportion of new CEOs, appointment of chief executivesfrom outside the company in 2011 remained at 22 percent for threeyears, which is notably higher than the historically low rate of 14percent in 2007.

The trend of increasing outsider appointments suggests thatcompanies may be bringing on leadership from other industries andgeographies to grow their companies, given industry convergence andthe importance of global experience in todays business environment.

Insider Outsider

Insider vs. Outsider Incoming CEOs

2007

2008

2009

2010

2011

Average

86%

82%

78%

81%

14%

18%

22%

78% 22%

78% 22%

19%


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CEO outsiders are more frequent in western Europe than in U.S./Canada


Appointments of outsider CEOs in western Europe have risenfrom 14 percent in 2007 to 31 percent in 2011, increasing 7percentage points over 2010.

In the U.S./Canada, 10 percent of new CEOs originated fromoutside their company in 2007. In contrast, 22 percent of those

appointed in 2011 were outsiders.

The signi cant difference between the two geographies infrequency of outsider appointments suggests an ongoing disparityin governance philosophies.

The increasing reliance on outsiders suggests that some companiesare making an effort to change their culture at the senior executivelevel and are seeking CEOs with experience in other regions.Furthermore, boards may be taking into consideration their

duciary duty to seek candidates from outside their company.

Insider Outsider

Incoming CEOs in U.S./CanadaInsider vs. Outsider

2007

2008

2009

2010

2011

2007

2008

2009

2010

2011

Average Average

90%

85%

76%

76%

78%

82%

Incoming CEOs in Western EuropeInsider vs. Outsider

10%

15%

24%

24%

22%

18%

86%

74%

64%

76%

69%

75%

14%

26%

36%

24%

31%

25%


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Insiders continue to perform better than outsiders


Insiders have typically delivered better shareholder returns overtheir tenure and have been less likely to be dismissed.

From 2009 to 2011, insiders delivered a median 4.4 percentshareholder return above regional market index, while outsidersdelivered just 0.5 percent.

Insiders were less likely to be forced from their positions.

For insiders over the past three years, 19 percent of non-M&A-related turnover events were forced, while for outsiders thisproportion was 35 percent.

On average, insiders stay in of ce nearly two years longer thanoutsiders and make up the vast majority of CEOs who remain inof ce for more than 20 years.

The better performance of insider CEOs is likely due to theirtribal knowledge of their companies.

R e g

i o n a

l l y a

d j u s

t e d a n n u a

l i z e

d t o t a l s

h a r e

h o

l d e r r e

t u r n

Insider Outsider

Note: Excludes turnover events resulting from M&A, interim CEOs, and events with incomplete turnover information. Regionally adjusted measures

TBR performance relative to a regional index (e.g., S&P 500, Brazil Bovespa, FTSE 100, CAC 40)

Median Shareholder Returns ofCompanies with CEO Turnover

Insider vs. Outsider Outgoing CEOs

Average Percent of ForcedCEO Turnover Events

Insider vs. Outsider Outgoing CEOs

4.4%

0.5%

3.6%

2.2%

3.9%

5.1%

-0.6%

-1.3%

20002002 20032005 20062008 20092011

F o r c e

d e v e n

t s / ( f o r c e d

+ p

l a n n e

d e v e n

t s )

Insider Outsider

18.5%

34.9%

40%

58.4%

33.4%

42.9%

34.8%

50.8%

20002002 20032005 20062008 20092011


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Tenure for insiders has historically been longer than outsiders' tenure


An insider CEO is nearly six times as likely to serve a company fornine or more years.

Of the CEOs who have served for nine or more years, 85 percenthave risen from within their companies.

Six percent of all insider CEOs have stayed in the of ce for 20 ormore years, whereas only 1 percent of outsider CEOs have remainedin of ce for so long.

Insider Outsider

Note: Excludes turnover events resulting from M&A, interims and events with incomplete turnover information

CEO Tenure in OfficeInsider vs. Outsider Outgoing CEO: 20002011Likelihood of Turnover Event by Tenure in Office

Number of years in office of outgoing CEO

P r o

b a

b i l i t y o

f o c c u r r e n c e

1%

2%

0.0-0.4

5%

8%

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20+

10%

12%

9%

12% 12%

12% 12%

10%10%

7%

7%

7%

5% 5%

2%

4%4%

3%

2%

3%2%

1%

2%2% 2%

1% 1%1% 1% 1% 1%

0%

1% 0%

6%

1%

Cluster A: One to eight years years in office is most common range for both insiders andoutsiders, but especially among outsiders

Cluster B: Nine to 15 years in office is more common among insiders

Cluster C: Insiders make upthe vast majority of CEOswith 20+ years in office

10%

2%


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Leadership in U.S./Canada has historically lastedlonger than in western Europe


Over the last decade, many more CEOs of companies in the U.S./ Canada remained in of ce for more than 10 years than did theircounterparts in western Europe.

Eight percent of all CEOs in the U.S./Canada have stayed in theof ce for 20 or more years; only 3 percent of CEOs of companiesin western Europe have stayed for so long.

U.S./Canada Western Europe

Note: Excludes turnover events resulting from M&A, interim CEOs, and events with incomplete turnover information.

CEO Tenure in Office by Region: 20002011Likelihood of Turnover Event by Tenure in Office

Number of years in office of outgoing CEO

P r o

b a b i l i t y o

f o c c u r r e n c e

1%

1%

0.0-0.4

6%6%

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20+

7%

11%

7%

10%

8%

10%

8%

14%

9%9%

7% 7%

8%

6%

5% 5% 5%

4%4%

2%

4%

2%

3% 3%

3%

2%

3%

1% 1%

1%

2%

1% 0%1% 1%

0%

8%

3%

Tenure above 11 years in office is much more likely among U.S./Canada CEOs


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ifferences in tenure among CEOs in U.S./Canada and western Europeas well as among insider and outsider CEOs are decreasing


Differences in insider/outsider CEO tenure in U.S./Canadaare narrowing.

In 20002002, insider CEOs held tenures signi cantly longerthan those of CEOs originating from outside their company,with median tenures of eight and 4.5 years, respectively.

In 20092011, the gap narrowed, and CEO tenures for bothinsiders and outsiders neared a median of seven years.

In western Europe, tenures for insider and outsider CEOs havebeen very similar over the past 12 years, historically around veyears, but rose slightly in 20092011 to six years, which narrowedthe gap with their counterparts in the U.S./Canada.

M e

d i a n

t e n u r e

( y e a r s

)

8

7

6

5

4

9

3

2

1

020002002 200920112006200820032005

Median CEO Tenure in OfficeInsider vs. Outsider Outgoing CEO by Region

Note: Excludes turnover events resulting from M&A, interim CEOs, and events with incomplete turnover information.

W. Europe InsiderW. Europe OutsiderUS/Canada Insider

US/Canada Outsider


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Combined chairmanCEO appointments decline


In North America, the frequency of combined chairmanCEO

appointments among incoming CEOs has declined from 40 percentin 2000 to just 18 percent in 2011.

In Europe, combined appointments have dropped from 53 percent in2000 to just 17 percent in 2011.

In Japan, the frequency of combined appointments has dropped from10 percent in 2008 to 0 percent in 2011.

Regulatory requirements may be responsible for the disparity in therate of combined chairmanCEO appointments.

1) United States, Canada, and Mexico2) Including Russia

China & Rest of Asia North America 1 Europe 2 Japan

2% 2% 2%

13%

5%6%

18%16%

10%0%0%

18%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

40%

30%

20%

50%

60%

70%

10%

0%

Percent of Incoming CEOs Who Also Hold the Position of Chairman

39%

0%

33%

20%

17%

18%

16%

31%

20%

25%23%

33%

40%

52%

48%

38%

14%16%

44%

24%

37%

26%

50%53%

30%

63%

19%

9%7%

32%

11%17%

15%

61%

18%


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The apprenticeship model continues


Over the last decade, companies have continued to appoint theoutgoing CEO as chairman of the board in order to apprentice theincoming CEO. The continued use of this practice across all regionssuggests that boards understand the dif culty that CEOs tend to facein their rst years in of ce.

The rate of the apprenticeship practice remained somewhat steadyin North America, ranging from 40 percent (of all planned sucessionevents) in 2000 to 37 percent in 2011.

Europeans continued to appoint outgoing CEOs to chair the boardat a fairly steady rate, ranging from 15 percent in 2000 to 17 percentin 2011.

The apprenticeship practice is strongest in Japan, but has droppedfrom 95 percent in 2000 to 63 percent in 2011.

1) United States, Canada, and Mexico2) Including RussiaNote: Excludes turnover events resulting from M&A, interim CEOs, and events, with incomplete turnover information.Only outgoing CEOs who experienced a planned succession event are included in this sample.

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

60%

40%

100%

80%

20%

0%

Japan North America 1

Apprenticeship Model by RegionPercentage of Outgoing CEOs in Planned Turnover Events Who Became or Remained Chairman

Europe 2

63%

37%

17%


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Insiders are more likely to become chairman

Over the past 12 years, insider CEOs have been consistently more

likely to be appointed chairman after a planned succession eventthan their outsider counterparts.

In 2011, insider CEOs were 12 percentage points more likely tobe appointed chairman than their outsider counterparts.

The practice has become less prevalent among both insiders andoutsiders; between 2000 and 2011, the frequency of this so-calledapprenticeship model has decreased.

It decreased from 57 percent to 30 percent for insider CEOs.

It decreased from 52 percent to 18 percent for outsider CEOs.

Note: Excludes turnover events resulting from M&A, interim CEOs, and events with incomplete turnover information.Only outgoing CEOs who experienced a planned succession event are included in this sample.

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

40%

30%

20%

50%

60%

10%

0%

Insider Outsider

Apprenticeship Model by Insider vs. Outsider Outgoing CEOPercentage of Outgoing CEOs in Planned Turnover Events Who Became or Remained Chairman

57%

51%

43% 42%

38%

41%

33% 32%

30%27% 28%

16%

52%

43%

8% 6%

23%

28%

33% 24%

18%19%

14%

5%


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MET O OLOGY This 2011 CEO Succession study identi ed the worlds largest 2,500public companies, de ned by their market capitalizations (fromBloomberg) on January 1, 2011. To identify companies among thetop 2,500 that had experienced a chief executive succession event,

Booz & Company cross-checked data across a wide variety of printedand electronic multi-language sources. Additionally, the companyconducted electronic searches for announcements of retirements ornew appointments of chief executives, presidents, managing directors,and chairmen during calendar year 2011. For a listing of companiesthat had been acquired or merged in 2011, Booz & Companyused Bloomberg. Booz & Company also conducted supplementalresearch for regional CEO changes not identi ed by other sources.Total shareholder return was sourced from Bloomberg and includesreinvestment of dividends (if any). Total shareholder return datawas then regionally market-adjusted and annualized. To distinguishbetween mature and emerging economies, Booz & Company followedthe United Nations Development Programme 2011 ranking.


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Booz & Company is a leading global management consultingrm, helping the worlds top businesses, governments, and

organizations. Our founder, Edwin Booz, de ned the professionwhen he established the rst management consulting rm in 1914.

Today, with more than 3,300 people in 59 of ces around theworld, we bring foresight and knowledge, deep functionalexpertise, and a practical approach to building capabilities anddelivering real impact. We work closely with our clients to createand deliver essential advantage.

For our management magazine, strategy+business ,visit www.strategy-business.com .

Visit www.booz.com to learn more aboutBooz & Company .
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boozco ceo succession study 2011 extended study report

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