What is the ideal age group for CEOs in Indian firms? The days of managers in their 40s taking over the CEO positions are getting shorter and shareholders and corporate boards are increasingly looking at hiring more CEOs in the 50- to 55-year age group. Grey hair, wisdom and experience seem to be back in fashion. Of the big new appointments, Wipro’s CEO TK Kurien is 50 as is Tiger Tyagarajan of Genpact. In fact, the increase in CEO age reflects a global trend towards hiring older CEOs. For example, among the S&P 500 firms, while the typical CEO was about 52 years in 1992, in recent years, the typical CEO is about 55 year old. Furthermore, the percentage of new CEOs over 50 has been increasing every year.
Since optimism is a valued trait in a leader, CEOs at all ages have to be willing to hear the bad news over and over and still see a silver lining. But good leaders don’t turn a blind eye to the data without good reason, and the data about corporate leaders indicate that age matters a lot more than CEOs and CEO experts think. There is a leadership sweet spot that falls in the 50s and early 60s.
While CEOs almost never get the job at 72, there are those who are effective at that age and beyond. Warren Buffett, CEO of Berkshire Hathaway, has crossed 80. Walter Zable, CEO of electronics manufacturer Cubic, is 95. Marriott International CEO Bill Marriott is 79. Kirk Kerkorian, CEO of Tracinda, is 93. Financier Carl Icahn waded into the fight between Microsoft and Yahoo! at 72. T Boone Pickens is weighing in on the energy quandary at 80. Late Sidney Harman, who died recently, retired at 88 as CEO of audio equipment giant Harman International, where he had long been the dean of S&P 500 CEOs. Dinesh Paliwal, 51, replaced Harman as CEO four years ago. Under such youthful leadership, stock in Harman International has fallen 63%. The oldest five S&P 500 CEOs left are 77 to 79, practically wet behind the ears.
However, as a group, the S&P 500 companies run by the youngest CEOs have been outperforming those run by the oldest. Of the 27 CEOs of S&P 500 who are 47 and younger, 23 have been CEO since the start of 2007. Those 23 stocks are down an average 2.8% over 19 months versus