IT’S EASY TO TELL when some things have expired. Stock options. Eggs. Prescription meds. Credit cards. But corporate America has long been stumped trying to find a more elusive expiration date: How can a company know when it’s time for a CEO to go? Anecdotes fall all over the map. Warren Buffett, the longesttenured CEO in the Fortune 500, has been running Berkshire Hathaway for 54 years, and the stock is still hitting new highs. By contrast, Fred Kindle needed only three years as CEO (2005–2008) to turn around venerable but moneylosing Swiss industrial conglomerate ABB and deliver shareholders a 262% total return.
Between those two extremes, many boards default to the mean. The S&P 500 average is 9.2 years, and despite occasional articles exclaiming that CEO tenures are shortening,
