The average age at which American CEOs are appointed has risen sharply over the last two decades, jumping from approximately 48 in the year 2000 to 55 by 2023, according to a new study published by the National Bureau of Economic Research (NBER). This trend is not merely a reflection of a general aging workforce, as the increase in CEO age is more than three times the rate seen in the broader college-educated labor force.
Read also: Efficiency first: Kazakhstan’s wealth fund cuts 11% of high-earning staff.
The study finds that this “aging” phenomenon is not a result of CEOs staying in their roles longer or retiring later, but rather a fundamental change in hiring criteria. While the age of leaders at the largest S&P 500 firms has remained relatively stable for decades, the current increase is heavily concentrated in smaller and unlisted companies.
This shift is primarily driven by a rising corporate demand for «generalist human capital». As operating environments become increasingly complex and economically uncertain, firms are choosing to trade off the “peak ability” or fluid intelligence of younger candidates for the accumulated experience and crystallized intelligence that only a longer career can provide.
Modern CEOs are taking much more circuitous routes to the top office than their predecessors. On average, today’s newly appointed CEOs have ten years more external experience than their counterparts did at the turn of the century. They now hold a larger number of positions across a more diverse range of firms and industries before ever reaching the CEO suite. Interestingly, the study identifies a strategic supply-side response: ambitious executives are voluntarily switching jobs more frequently, sometimes even accepting “downward moves” to lower seniority levels or taking short-term pay cuts specifically to acquire the generalist skills now required for leadership.
Read also: 56% of 2030 jobs: Why AI ‘cross-competency’ is the new must-have skill.
This demographic shift has significant implications for the American economy. The researchers note that while older CEOs are statistically associated with slower growth rates and less radical innovation, they provide greater resilience to macroeconomic shocks and adopt more conservative risk-management strategies. Furthermore, the study suggests that as technologies like artificial intelligence increasingly substitute for routine tasks, the premium on experienced, high-level decision-makers will likely keep the average age of leadership high for the foreseeable future.
