85% of American CEOs are promoted from within

The majority of CEOs at top companies in the U.S. are promoted from within and have a background in finance, according to Heidrick & Struggles.

The professional services firm examined characteristics of chief executives from the top 100 companies in the Fortune 500, as well as companies from the U.K.'s FTSE, Germany's DAX 30 and MDAX 50, and France's SBF 120.

Among the countries studied, the U.S. was the most likely to promote CEOs internally, with 85 percent of American CEOs promoted from within, compared to 68 percent in Germany, 61 percent in the U.K. and 48 percent in France. However, it also takes American CEOs the longest to work their way up in a company. American CEOs work an average of 20 years in their company before the big promotion, compared to 14 years in France and Germany, and 13 years in the U.K., according to Heidrick & Struggles.

Perhaps due to the longer track to the top, U.S. CEOs were also the oldest of the countries studied, with an average age of 52. Just 17 percent of American CEOs are under age 55. However, the average age of the founder CEO was youngest in the U.S., at 27 years old, according to the report.

American CEOs most commonly have backgrounds in finance (31 percent) or engineering (18 percent). They were also the most likely group to hold MBAs (35 percent do), though that trend is declining, according to the report. In 2015, 42 percent of U.S. CEOs held MBAs.

Heidrick & Struggles also found CEOs are overwhelmingly male across all the countries studied, though the U.S. had the highest share of female CEOs, at 8 percent in 2016. In the U.K., female CEOs represent 6 percent of chief executives, while in France the proportion of women CEOs is 2 percent and in Germany it is just 1 percent. The U.S., however, is the only country in which the proportion of female CEOs declined over the past year, from 9 percent in 2015 to 8 percent in 2016. This is likely because the proportion of female CEOs is so small even minor rates of turnover produce notable change.

 

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