By Rachel Feintzeig
When John Chambers steps down from the top job at Cisco Systems
Inc. this summer, it will end the run of one of the longest-serving
corporate chieftains in the S&P 500.
The 65-year-old Mr. Chambers ran the tech giant for 20 years,
during which it was briefly the world's most valuable company. This
week, the company said that Mr. Chambers will pass the baton to
Chuck Robbins, a 17-year Cisco veteran, following years of
speculation about the company's succession plans.
Several long-tenured chief executives have left their posts
recently, including Oracle Corp.'s Larry Ellison, now chief
technology officer and chairman of the firm he led for 37 years,
and Peter Rose, who spent 26 years leading Expeditors International
of Washington.
Yet there are still plenty of corporate chieftains with decades
under their belts, and those men show few signs of handing over
power any time soon, said Peter Crist, the chairman of
Chicago-based executive search firm Crist|Kolder Associates.
According to a list compiled by the Conference Board, the
longest-tenured CEO in the S&P 500 is Leslie Wexner, who has
served for more than a half-century atop L Brands Inc., which owns
Victoria's Secret and other retailers.
Next is Berkshire Hathaway Inc.'s Warren Buffett, CEO for 45
years, and Alan Miller, who has spent 37 years at the helm of
Universal Health Services Inc., an operator of hospitals and
clinics.
Rupert Murdoch has spent 36 years atop 21st Century Fox Inc.; he
is also the chairman of News Corp, the parent company of The Wall
Street Journal.
It is unlikely, however, that new leaders like Mr. Robbins will
enjoy the long runs of their predecessors, said Mr. Crist, since
the top job today comes with more pressure and a heightened focus
on the short-term.
Average CEO tenure might drop as baby-boomer chiefs retire, said
Matteo Tonello, who oversees research about CEO succession for the
Conference Board.
Tenure began to edge downward at the beginning of the last
decade, according to Mr. Tonello, amid tightening corporate
governance practices, stronger independent boards and CEOs' pay
becoming tied more closely to performance. Tenure for S&P 500
chiefs was 9.9 years last year, up from 7.2 years during the peak
of the financial crisis in 2009.
Ideal CEO tenure might be even shorter. Researchers at Sichuan
University in Chengdu, China, and at the University of Texas at
Arlington found that bosses lose touch with market conditions and
become entrenched the longer they remain in their roles. The
optimal tenure length, the researchers decided, was 4.8 years.
Most of today's long-standing executives have one crucial
advantage: they are either founders or the descendants of founders,
which gives them more control than the average public-company
chief. Jeff Bezos, the founder and CEO of Amazon Inc., who has been
at the helm since 1994, and Facebook Inc. co-founder Mark
Zuckerberg are both current chiefs with large stakes in their
firms.
Such leaders are tougher targets for activists, said Mr. Crist.
He said he doesn't expect any members of the list will be forced
out before they retire and expects some may hang on for years to
come.
"Lots of CEOs basically live through their companies," he said.
"It's their identities. So they aren't going to leave any time
soon."
That doesn't stop anyone from speculating about the succession
plans of leaders like Mr. Buffett. The Berkshire Hathaway chief
turns 85 in August and has in recent years tried to assure
shareholders that the company will be just fine when he's no longer
at the helm.
After Mr. Buffett and his contemporaries move on, Mr. Crist said
their replacements will have a tougher time weathering the
pressures from activist investors and empowered boards.
"I think when the top 10, 15 names fade away you won't see in
our lifetime anybody who's going to be a CEO for 60 or 50 years,"
Mr. Crist said. "It just will not happen, period."
Write to Rachel Feintzeig at rachel.feintzeig@wsj.com
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