The official retirement age for executives at many large U.S. corporations has been 65 for several decades – unless the executive also happens to be the founder.
Forty years ago, 65 was considered old. The average life expectancy for a man born in 1900 was 46 and, by 1950, had only risen to 68 . At one time, it made sense to require CEOs to step down at 65.
Now, many people who are 65 years old are in the prime of their lives. The number of people living well into their 90s has soared. There are rare cases of powerful chairmen and CEOs in their 70s and 80s still leading their companies. Surprisingly, the tradition of CEO’s retiring around the age of 65 has not changed.
Another reason CEOs retire in their mid-60s is that boards of directors want the best and the brightest of the next generation of management to take the CEO’s place. Executives who have waited their entire careers for the chance at the top job expect to be considered while still in their 50s, if not younger.
General Electric’s Jack Welch,viewed by many to be one of the best CEOs of all time, retired at 65. It was not because he wasn’t doing his job. There were, in the view of the GE board, three men at the company who had competed for the top spot and who were “CEO material.” The job went to Jeff Immelt and the two other men left to run other large corporations.
Rules governing retirement are not applied even-handedly. At IBM, the mandatory age of retirement was 60. Thomas Watson Sr. the de facto founder of IBM, ran the company until just before his death in 1956, at the age of 82. Henry Ford held a number of titles at the company that shared his name. Although he may not have remained the CEO, it is generally accepted that he ran the company until he was forced to hand it over to his grandson. Ford was 81 at the time.
The experiences of Ford and Watson are similar to almost every person on our list. Nearly all of them are either the founder of their company or are related to the founder by blood. All are 75 years of age or older and hold the position of president, chairman or chief executive officer.
This raises the questions: why do they continue to hold their jobs, and why have they held them for so long?
Rupert Murdoch, Warren Buffett, J.W. Marriott Jr, and Sumner Redstone would almost certainly not have their jobs at a typical company. Even if they were competent, they would have stepped aside for younger men. Their protracted tenure undermines the idea that American corporations are meritocracies – as far as job promotions go.
Perhaps there is another reason the mandatory retirement age for many companies’ executives is 65. Being the CEO is a hard job. It requires the stamina to manage tens of thousands of employees, develop strategies that require forecasts that look several years into the future and travel hundreds of thousands of miles a year. These are some reasons that boards of directors choose highly trained people at the peak of their careers to lead their companies.
Based on our review of publicly available financial information, 24/7 Wall St. created this list of the oldest CEOs, chairmen and presidents of the Fortune 500 companies. The CEOs and Chairmen on this list are people who have kept the top job long past typical retirement age. They often control their companies and to a large extent the boards as well. Whether this is good for the companies they run is another matter.
The compensation and net worth numbers are based on 2009 data.
|Images||CEO/Chairman (Title, Company)||Age||Biography|
|Warren Buffett (Chairman, Berkshire Hathaway)||79||Warren Buffett is the most well-known investor in history. In 1947, he graduated from high school. After briefly attending Wharton, he graduated from University of Nebraska-Lincoln with a BA economics. After a brief stint working for legendary investor, Benjamin Graham, Buffett formed Buffet Partnerships, Ltd. He lives in the same home he purchased for $31,500 in 1957. In his spare time, Buffett plays scrabble against his computer. He has been a director of Berkshire Hathaway since 1965 and became Chairman and CEO in 1970. Buffett has a net worth of $47 billion.|