Infographic: The cost of failed CEO succession planning

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.

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The cost of failed CEO succession planning
This analysis is from the 15th annual study of CEOs, Governance, and Success, which each year examines CEO turnover and incoming and outgoing CEOs at the world’s 2,500 largest public companies.

Large companies

forced into CEO turnovers

miss out on some $1.8bn each in shareholder value — a total of $112bn
Year leading to turnover Year after turnover

The di erence in median total shareholder returns1 for companies undergoing planned versus forced successions

-0.5% -3.5%

Planned
-13%

-0.6%

Forced

Large companies could collectively in shareholder value add
if they could limit forced turnovers to only 10% of all turnovers
1

$60bn

Total shareholder returns are regionally adjusted, meaning that performance is measured relative to a regional index (S&P 500, Brazil Bovespa, FTSE 100, CAC 40, etc.). This analysis is based on turnovers occurring in 2011, 2012, and 2013 for which full turnover and market capitalization information is available.
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