Another one bites the dust

Another one bites the dust


Why the half-life of private equity-backed chief executives is dropping and what can be done about it.

By Andros Payne, CEO, Humatica

Changing the senior executive is a big and often risky step for sponsors. Losing one to two years in a seven-year investment cycle hurts, and the uncertainty of whether the new leader will be better than the last gives pause for thought. Decisions are not taken lightly, but sponsors are reaching for the eject button ever more often. The trend is clear – senior executives are getting paid more and staying less.

In a recent report, Strategy& finds that global CEO turnover recently peaked at 14.3 per cent, a significant increase on the 9.8 per cent turnover rate a decade ago. At the same time, pay continues to rise. Average CEO pay across S&P 500 companies reached $15.2m (€13.6m) in 2013. No risk, no fun.

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