The 2014 Study of CEOs, Governance, and Success

This is the 15th year that Strategy& has examined CEO successions and success among the world’s top 2,500 public companies. This year we’ve assessed how much progress companies have made toward better CEO succession planning, how much value some companies are leaving on the table with poor planning, and the potential value of further improvement.

Change at the top is destabilizing for any company. CEO turnovers lead to shifts in the top team, changing corporate priorities, and an inward focus at most companies. And all that is related to a real financial effect: among companies undergoing a turnover for any reason, we’ve found that median total shareholder return (relative to the indexes on which companies trade) drops to -3.5 percent in the year after a turnover takes place, based on our analysis of the most recent three years of turnovers.

When companies are forced into turnovers, the drop in median shareholder returns is even more dramatic: a fall to -13 percent return in the year leading up to the CEO change and just -0.6 percent in the year after. We estimate that these returns mean that each company that has undergone a forced turnover has foregone some $1.8 billion more in shareholder value than companies that have undergone planned turnovers.

There is good news: the share of planned turnovers (instead of forced) has improved by 30% since the early years of our study. We estimate that companies can add some $60 billion in shareholder value if the total share of forced turnovers stabilizes at 10%, a bit below 2014’s rate of 14%. Furthermore, there are a number of straightforward steps companies can take to improve their CEO succession process, from those as simple as always having a plan to more complex steps like being sure to always look ahead at the company’s needs, not back at candidates’ track records.


Videos: 2014 Study of CEOs, Governance, and Success

watch video about the value of getting CEO succession right
This video highlights the value lost by poor CEO succession planning, what can be gained by better planning, and how companies can improve their CEO succession planning process.
watch video about the 2014 incoming class of CEOs
This video explains the key findings of Strategy&’s 15th annual study of changes at the top of the world’s largest 2,500 public companies and what those changes tell us about what companies are looking for in their CEOs.

Key publications

read the report about the value of getting CEO succession right
This year’s report focuses on how companies have improved their CEO succession practices over the past 15 years, the value some are still leaving on the table when they are forced into making a change at the top, and the potential value companies could gain by increasing the share of planned turnovers.
read more about the $112 billion CEO succession problem
Companies forced into CEO turnovers in recent years have foregone about $1.8 billion in shareholder value each — this article offers four ways to improve your company’s succession planning.
watch the video about CEO succession
Large companies can lose billions of dollars when they don’t plan for changes in leadership.
The characteristics of more than 4,000 CEO succession events linked with financial performance over the last 15 years.
In 2014, more CEO turnovers were planned than ever — and the incoming class looks about the same as it has in recent years.

Additional insights

view infographic about the cost of failed CEO succession planning
View this one-page graphic highlighting the value companies forego when they are forced into changes at the top.
view interactive graphic showing 15 years of CEO succession data
Explore CEO succession rates by geography, industry, and year.

Related research

learn more about PwC's 18th Annual Global CEO Survey
How are chief executives thinking about growth in a world without boundaries? Find out in PwC’s latest annual CEO survey.

Press release

read the press release for the 2014 Study of CEOs, Governance, and Success
Read our global press release for the 2014 Study of CEOs, Governance, and Success.