The big generational shift among America's CEOs

Of the many groups of people affected by the Great Recession, gray-haired chief executives of America's largest corporations may be the least sympathetic. It's hard, after all, to think of CEOs who make millions of dollars a year as any sort of victim. Still, a new report from The Conference Board reveals just how many older CEOs departed their jobs at the helm of S&P 500 companies in the years following the financial crisis, a trend that has begun to slow and level out, signaling a generational overhaul in the suites of the largest U.S. corporations.

The new report by the business research association shows that between 2009 and 2014, the percentage of S&P 500 CEOs age 64 and above who left their jobs far outstripped the portion in previous years. During those six years, the percentage of older CEOs who left their jobs was, on average, about 25 percent, while the percentage of younger CEOs was less than a third of that figure, or about 8 percent.

At first glance, that may not seem all that surprising. After all, people age 64 and older are known to retire, especially when they have plenty of money to do so. But it's notable that the gap is far bigger in the years following the financial crisis than it was in the eight years that preceded it. Between 2001 and 2008, the average percentage of turnovers involving older CEOs was just 16 percent; for younger CEOs, it was 11 percent, a much smaller gap.

That trend may have run its course by 2015, when the gap shrunk significantly, says Matteo Tonello, a managing director at The Conference Board. He expects the gap to narrow even more in 2016. "Over the course of a few years you practically have an entire generation of CEOs exiting the S&P 500," he says. "The financial crisis gave an opportunity to boards to refresh their management suites," with younger CEOs going out at a much lower rate.

Companies are notoriously hard to pin down on the exact reasons for a CEO departure, so the numbers include true retirements, forced exits, and everything in between. Tonello says the exact reasons companies chose to make this generational shift is unclear, but given the timing, it's fair to assume boards felt pressure to turn the crisis into an opportunity to bring in a younger generation of leaders to change up the strategy. "There's a cultural change in the attributes of leadership, and the recognition that younger leaders may be more sensitive to changes in customer demands and more familiar with new technologies," he said.

Tonello's data doesn't make it clear if the average CEO's age is getting lower - The Conference Board's report does not track ages of all CEOs in the S&P 500 over time.

The annual report on CEO transitions also showed that the average tenure of exiting CEOs is getting longer, rising to 10.8 years in 2015, though that number was driven up in part by the decades-long tenures of two exiting CEOs in 2015: Rupert Murdoch of 21st Century Fox (36 years in the job) and Robert Skaggs, Jr. of NiSource (34 years). CEO tenures frequently grow longer during better economic periods, when corporate performance tends to be stronger.

For instance, the percentage of CEO exits described as "disciplinary" - those involving a CEO under the age of 64 whose shareholder returns were among the worst in the S&P 500 index - was 17 percent in 2015, well below the 15-year average of 23.5 percent.

The report also found that nearly 86 percent of promotions to CEO in 2015 went to insiders rather than candidates lured from the outside, the highest rate in three years. And easily its most unsettling statistic is one that's already been reported by others: Just one of the 56 S&P 500 companies that hired a new CEO in 2015 named a woman.