The assessment process to find an internal candidate for CEO started out like many do: Working with the board and current chief executive, we looked at others in the C-suite, at superstar presidents of large divisions, and at executives who had experience running a P&L. We introduced them to parts of the top job where they have had no exposure, from board meetings to media interviews to all-hands town halls. Slowly, we whittled down the finalists and picked our successor.
Then the heir apparent—about half a year from taking the helm—reversed course after having dinner with the current CEO, echoing sentiments that other would-be CEOs have expressed.
I’m not sure I want the pressure. This isn’t what I thought it would be. I’m concerned about my family’s safety. There are so many components of this job that weren’t part of my previous roles.
In modern-day CEO succession, these refrains have become more common, if not prevalent. At a time when so many factors are weighing heavily on the shoulders of CEOs—soaring activist-investor takeovers, employees who feel empowered to criticize a leader’s every move, AI’s uncertain effects on business—an emerging reality is setting in: The chief executive role has lost some luster. Even compensation packages, which now average a hefty $16.3 million according to our research, aren’t sufficiently enticing.
I’m far from alone in recognizing this shift, of course. According to one survey, nearly 2,000 U.S. CEOs left their positions last year, a record high. At the same time, average CEO tenures are dwindling, according to our research, from about 10 years in 2015 to seven in 2024. Prominent firms have seen chiefs leave, and pundits have theorized that leaders may want to quit while they’re ahead. And that was all before the tragic killing of UnitedHealthcare CEO Brian Thompson, which has made physical safety only the latest worry for fellow CEOs.
In this climate, can we really blame leaders for shying away from the top job?
A new CEO framework
Growing up as the daughter of immigrants from India in the 1970s, I watched my parents steadily climb the corporate ladder. My father, who worked at Xerox for 30-plus years, ended up as a chief commercial officer of a billion-dollar company, and my mother became a vice president of marketing before stepping down at 60 to enjoy retirement. Their jobs afforded me the opportunity to go to school and start my own corporate career right after graduation; their examples planted the seed, from early on, of my yearning for the top job. This was my north star, without question, and weighing the pros and cons, the benefits to me still outweigh the costs. While I find great purpose in leading, for some, the scales have tipped, and some truly talented people are opting out.
Many of today’s executives grew up with similar aspirations. There are rising stars who still would love to become top corporate leaders, but others have started to recognize how much the framework for the job has changed. For the past decade, corporate experts, from the auditoriums of business schools to the conference tables of boardrooms, have touted the virtues of agility. It’s easy to be agile in a known system—one in which the rules of engagement are familiar to you. That’s how CEOs in the early aughts worked, and it’s part of the reason some of them had such great success. But we’re all operating in a new system, one that mixes together politics and big business and climate change and technology and social risk—one for which the rules of the road haven’t yet been written. Just when you think you’ve figured it out, you hit a new land mine.
Rather than telling current or aspiring CEOs to be agile and flexible, we need to start preparing them for an era of leadership whose rules we have to figure out on the fly. And we need to provide more support to make the job enticing again. Here are three ways to consider:
Appoint an executive chair
The executive chair role has often been seen as a double-edged sword; the role isn’t an independent board director—which is why many CEO candidates bristle at the idea of having one. They feel they won’t have the autonomy to run the company their own way.
But maybe it’s time for candidates to become more amendable to—and for companies to use—the executive chair role to help fortify the CEO position. Executive chairs can help mitigate risk, give markets comfort through transitions, and provide much-needed guidance to new CEOs. The key is to ensure the role is defined to a specific period of time, usually one to two years, and that employees and investors understand who’s in charge.
Give the CEO a ‘SWAT team’
If an executive chair position isn’t a favorable option, consider giving the CEO an on-demand “SWAT team” comprised of ex-CEOs, governance and financial experts, and hired executive coaches to tap into for advice when, say, an activist takeover may happen or a supply chain issue is threatening a best-selling product. The idea is that you can’t expect the best CEO to be a quintessential expert prepared for every turn of events happening these days—so why not bring a person or team in that’s faced that very issue to provide some key perspectives? More importantly, this can help CEO candidates who worry they won’t have a sounding board to share their concerns and vulnerabilities with.
CEO ‘combat pay’
Just as military personnel receive additional pay for really dangerous duties, perhaps it’s time for boards to consider a similar measure for CEOs. After all, there’s a price for everything and compensation is one lever that can be tweaked, particularly if security and reputational risks are top of mind. It’s not perfect, but combat pay, paid out as special bonuses after particularly grueling times or game-changing moves, provides recognition that the CEO role is no longer just about looking for key mergers to grow the firm or cutting costs by moving manufacturing overseas to increase shareholder value. Rather, it’s a role that now means a CEO could go to a Taylor Swift concert with their children and possibly appear in a stranger’s social-media feed 24 hours later.
There will certainly be other ways to restore the luster of the corner suite. In the meantime, the best advice I can give to boards is to operate on the assumption that your top CEO candidate may very well back out of—or need a little convincing to accept—a role that very few people used to turn down.
The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.
Read more:
- I’m an ex-CEO. My peers are facing the reality that many Gen Zers see corporate America as the enemy
- The next C-suite pivot is from a DEI to a DOGE mindset—and leadership roles are in for a shakeup
- Job applicants say the search has never been harder, but C-suite leaders are losing sleep over attracting top talent
- What’s it like to be CEO? In a word, lonely—and you might not know for years, or decades, whether you did a good job
