With the NCAA basketball tournament starting today without the presence of the Syracuse Orangemen, its coach Jim Boeheim’s recent retirement is a reminder that many company CEOs struggle to know when it is time to move on.
Key Details
- In 2015, Boeheim announced that he would retire in three years, a decision the school supported.
- However, it was not until this year that the 78-year-old coach officially retired.
- The years following Boeheim’s 2015 announcement were filled with tumultuous seasons for the basketball team. A disappointing 17-15 season left the team out of the NCAA’s March Madness tournament this year.
- Though Boeheim’s 47-year career was filled with success for the Syracuse Orange, the coach’s final years were reminiscent of other company CEOs who stayed longer than planned.
- CEOs outstaying their welcome is a common dilemma for board members.
Why it’s news
Though he is the second-winningest basketball coach of all time, Boeheim’s last few years were grim, reminding some of CEOs who might have stayed on too long. AIG’s Hank Greenberg was removed at 79 during a securities-fraud scandal. Viacom’s Sumner Redstone swore that he would never retire, but at 92, he gave into lawsuits and shareholder pressure to leave. A toxic work culture was the eventual downfall of Uber Technologies’ Travis Kalanick in 2017.
The pandemic caused some CEOs to stay at their companies longer than planned. Economic uncertainty and unprecedented conditions pushed many companies to change as little as possible and maintain steady, consistent leadership. This resulted in the average S&P 500 CEO’s reign reaching 10 years rather than the previous five to eight years, Bloomberg reports.
Now that these CEOs have navigated their companies through the tumultuous pandemic years, some are still holding on as a new era of economic uncertainty surrounds the market.
Brian Cornell, who became Target’s CEO in 2014, has announced that he will stay at the company for an additional three years. This breaks from the retailer’s typical retirement timeline. Walmart CEO Doug McMillon, who also assumed his position in 2014, has also committed to another three years.
Though neither CEO is facing calls to step down, the delay in starting succession planning could spell difficulty for the retailers in the future. Boards can sometimes have greater difficulty in succession planning when their CEO is excellent, as members worry over offending the CEO, Bloomberg reports.
When analyzing how well post-IPO startup founders compared to non-founder CEOs, a University of California-Irvine’s Paul Merage School of Business study found that founders typically left the company three years after going public. Non-founder CEOs typically leave around year six, Bloomberg reports.
