'Forever CEOs' are looking less evergreen

CEOs' tenures are shrinking at S&P 500 companies, according to a recent study conducted by Equilar. 

The median tenure length for S&P 500 CEOs was six years in 2013. By 2022, it was 4.8 years — a 20 percent decrease, according to an Aug. 3 post from Joyce Chen, an associate editor at Equilar, on the Harvard Law School Forum on Corporate Governance. 

Average tenure length also decreased during this time period, although less drastically than median tenure length. The average CEO tenure in 2013 was 7.6 years, compared to 7.2 years in 2022. 

Andy Serwer, editor-at-large at Barron's, uses the phrase "forever CEOs" to describe leaders who hold their positions long-term. These chief executives are now few and far between, according to Ms. Chen. Thirty-nine percent of CEOs hold their position for one to five years; only 4 percent keep the reins for 15 to20 years, and another 8 percent sport tenures more than 20 years. 

The heightening demand of the role could be responsible for this phenomenon, according to Ms. Chen. She notes that CEOs' jobs have evolved to require more "accountability and adaptability" than in years (and decades) past, requiring leaders to be more nimble than ever — a challenging task that can be difficult to sustain. Although CEO tenures increased slightly in 2021, new struggles including supply chain issues and inflation led to another dip in 2022, Ms. Chen suggests. 

"The COVID-19 pandemic has undoubtedly played an underlying role in accelerating the decline of CEO tenure," Ms. Chen wrote. "These chief executives were required to navigate their organizations in the midst of major shifts including economic turmoil, supply chain disruptions and uncertainties in the market. This led to CEOs having to make critical decisions quickly and adapt their strategies to ensure the survival and stability of their companies." 

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