“Wrinkles of Change? The Reproduction of Age Profiles in the Executive Suite Across CEO Succession Contexts”

Professor Mariano Heyden, Monash University, Australia.

Abstract:

We examine the reproduction of age profiles in the executive suite across CEO succession events. Contrary to the trend of the general workforce becoming more age diverse, the executive suite has been becoming more age homogeneous and older over time. This is despite increasing frequency of CEO succession events, which represent opportunities for demographic change at the top. Drawing on insights from upper echelons theory, homosocial reproduction theory, and executive succession research, we argue that the age profile of CEOs and TMTs may be reproduced in the context of social uncertainty inherent in CEO succession events, and that over time, age homophily is reinforced. Exploiting CEO turnover as a theoretical context for change and an empirical identification strategy, we construct a unique sample of 391 successions in 297 S&P500 companies from 2000-2020 and apply a hierarchical linear modelling specification to test hypotheses. We find general support for the overall notion that some age profiles are reproduced across CEO succession events. Notably, the overall age profile of the TMT shifts upwards as CEOs are increasingly older at appointment, a tendency that is reinforced by outsider CEO successors – counter to the usual expectation that demographic upheaval is prompted by outside appointments. We discuss implications for theory and practice.