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12 th February 20131 High Pay Centre – 12 th February 2013 Global CEO Appointments: A Very Domestic Issue David Bolchover.

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Presentation on theme: "12 th February 20131 High Pay Centre – 12 th February 2013 Global CEO Appointments: A Very Domestic Issue David Bolchover."— Presentation transcript:

1 12 th February 20131 High Pay Centre – 12 th February 2013 Global CEO Appointments: A Very Domestic Issue David Bolchover

2 12 th February 20132 Contents  Methodology  Study purpose  Executive summary  Region by region  Miscellaneous facts  Significance of results

3 12 th February 20133 Methodology  Study of 2012 Fortune Global 500  Information available on 489 CEO career histories  Study conducted Sept-Oct 2012  If no CEO, looked at predecessor  CEO defined as executive head  External = outside company

4 12 th February 20134 Survey significance  Does an international talent market for CEOs really exist?  Key plank of high executive pay justification  United States data particularly important “We are a worldwide company; we are the leading company in our industry. The comparison, whether you like it or not, is with other companies in the world.” Sir Martin Sorrell, CEO, WPP, 2011

5 12 th February 20135 Executive summary  4 existing CEOs poached across borders : 0.8%  1 existing CEO poached across regions: 0.2%  14 international hires from below top: 2.9%  North America: not one CEO from abroad  Nor Japan, Latin America or Eastern Europe  80% CEO appointments are internal hires  32 existing CEOs poached in total:6.5% International CEO market extremely limited

6 12 th February 20136 CEO appointments – at a glance Number of companies Internal hireDomestic external hire (not CEO) Domestic external hire (CEO) External hire from abroad (not CEO) External hire from abroad (CEO) North America14212413500 Western Europe1531101612114 China61*4013710 Japan69680100 Rest of Asia33293010 Eastern Europe954000 Latin America13102100 Australia960210 Total4893925128144

7 12 th February 20137 North America: Staying home  n = 142  No CEO recruited from abroad  87% CEOs promoted internally  5 CEOs (3.5%) poached while CEOs  Only 1 poached while CEO since 2007  13 CEOs recruited from below top tier

8 12 th February 20138  n = 153  72% CEOs promoted internally  11 (7.2%) non-CEOs recruited from abroad  8 non-CEOs recruited from North America  4 (2.6%) existing CEOs poached from abroad Peugeot Citroen – Philippe Varin (2009) Holcim – Bernard Fontana (2012) International Airlines Group – Willie Walsh (2005) Bayer – Marijn Dekkers (2010) Western Europe: Trickling across the pond

9 12 th February 20139 China: From state to state  n = 61 (11 career histories unavailable)  66% promoted internally  If state one employer, then only two external appointments Noble Group - Yusuf Alireza (from abroad, 2012) China Merchants Bank - Ma Weihua

10 12 th February 201310 Japan: Decades on a ladder  n = 69  Just one external appointment Japan Post – Jiro Saito (2009)  One company men  Average public company salary: $560,000 (PwC)

11 12 th February 201311 Rest of Asia: More introspection  n = 33 (South Korea, India, Taiwan dominate)  Only four recruited externally, all non-CEOs  Of these, three were domestic  One non-CEO recruited from abroad S-Oil – Nasser Al-Mahasher (2012)

12 12 th February 201312 Eastern Europe: Putin’s boys  n = 9  All hired domestically  Four hired externally, all non-CEOs  Three external hires Putin associates Gazprom – Alexey Miller Rosneft – Igor Sechin Sberbank – Herman Gref

13 12 th February 201313 Latin America: Impregnable borders  n = 13 (Brazil dominates)  All hired domestically  Three recruited externally, including one existing CEO

14 12 th February 201314 Australia: some musical chairs  n = 9  3 recruited externally 2 existing CEOs hired domestically 1 non-CEO recruited from abroad  A & Z Banking Group – Mike Smith

15 12 th February 201315 Miscellaneous facts  18 CEO/founders (incl 7 in US)  13 CEO women (2.6%)  9 women CEOs in US, 1.1% in rest of world  CEO mean average age: 57.2  Highest average age: Japan (62.5)  Lowest average age: Eastern Europe (51.1)  Youngest CEO: John Elkann (36), Exor  Oldest CEO: Paul Desmarais Snr (85), Power Corp

16 12 th February 201316 Significance of results  International hiring minimal (3.7%)  Some European recruitment of US non-CEOs (5.2% of regional total)  United States reject cross-border hires  International CEO salary benchmarking pointless  Overwhelming majority promote internally  Even domestic benchmarking in many regions is of limited value Ambitious internal candidates likely to accept job anyway Little risk of poaching  Despite rhetoric, CEO talent not viewed as rare  International CEO talent market overplayed – self-interest?


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