American CEOs are getting older
· Axios
It's not just Congress — the corner office is graying, too, with the average American CEO now 61, up from around 51 two decades ago, a new working paper finds.
Why it matters: It's a mixed bag: Older leaders tend to manage businesses that grow more slowly and are less likely to radically innovate, the study finds, in line with prior research. But they also appear to be better at managing companies through more uncertain economic times.
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By the numbers: The researchers looked at a database of more than 50,000 leaders. They found that the tendency to hire older leaders is more predominant among smaller, privately held companies.
- Bigger corporations are more able to promote from within — as Apple just did, bringing on 50-year-old John Ternus to replace 65-year-old Tim Cook.
Zoom in: For that reason, leaders at the biggest companies, S&P 500 CEOs, are a bit younger, 58.5 on average in 2023, notes Bloomberg — up from 56 in 2000, in line with the rest of the working population.
The intrigue: This trend isn't simply a matter of leaders sticking around longer.
- The average age when a CEO nabs the job rose as well, to 55 from around 47.
- And yes, the U.S. population is graying, but this trend isn't simply about demographics: The average age of a college-educated worker rose only two years over the same period, write the authors, economists at Princeton and the University of Bonn.
Zoom in Companies, particularly small ones, appear to want older leaders with longer and more diverse career paths.
- The study finds that today's CEOs hold more jobs, across more companies, before ascending to the top job.
- These "generalists" are really good at managing, Farzad Saidi, an economist at the University of Bonn who coauthored the report, tells Axios.
- The analysis finds that rising economic uncertainty and complexity, make generalist skills more valuable.
The intrigue: Even though these generalists are prized at the top of the ladder — and have been for more than a decade, other research finds — companies are fostering fewer of them now, as entry level hiring has slowed.
- That means the value of older generalist CEOs is only rising.
- "The premium will only increase," Saidi says.
State of play: This isn't just a business thing. The next generation is finding its path to the top blocked across a range of careers.
- The current Congress is the third oldest ever — with the average senator age at 63.8 and the average age in the House at 57.7.
- The average age at which Ph.D. scientists get their first grant — a sign of success for "young" researchers— increased to 43 in 2020, from 39 in 1995, a STAT news piece noted last year.
- And we haven't even mentioned the situation with homeownership.
The bottom line: For many regular workers, ageism is a drag that eventually knocks them out of the workforce or keeps them from climbing the ladder — but a select group of the 55+ crowd is finding its way to the top.