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Leadership transitions at the top of listed companies are accelerating and, these changes propagate through the organization. When a CEO changes, reporting lines shift, strategy is refined, capital allocation priorities move, and the ripple effects reach far beyond the C-suite. In 2025, that ripple effect was particularly visible.
A total of 168 new CEOs were appointed across the S&P 1500, the highest level since 2010. Turnover increased most sharply among small-cap companies, while large-cap companies also experienced meaningful movement. This unfolded against a backdrop of market volatility, activist scrutiny, AI-driven transformation and economic uncertainty.
Several patterns stand out.
Shorter tenures are becoming the norm
Average CEO tenure declined to 8.5 years, with nearly 40% of departing CEOs leaving within their first five years. Performance divergence often becomes clear between Years 3 and 5. Boards are acting earlier when strategic momentum weakens.
Boards are investing in internal pipelines.
Sixty percent of newly appointed CEOs were promoted from inside the organization. Large-cap companies, in particular, favor insiders who understand the culture, strategy and stakeholder landscape. This reinforces the importance of developing enterprise-ready leaders before succession becomes urgent.
First-time CEOs are back.
Eighty-four percent of incoming CEOs were first-timers, reversing the recent trend toward experienced public-company leaders. Many were former COOs or divisional CEOs with strong P&L exposure. While experienced CEOs remain valuable in turnaround situations, boards are again willing to back high-potential internal talent for long-term performance.
Career paths remain disciplined.
Nearly half of new CEOs came through the COO or president role, and another 30% were divisional CEOs. Only 9% were promoted from the CFO role, down from the prior year. Boards continue to prioritize proven enterprise leadership over “leapfrog” appointments.
Diversity progress slowed.
Women represented 9% of newly appointed CEOs in 2025. Strengthening diverse leadership pipelines earlier in the succession process remains critical.
What this means for boards and executive teams
- Treat CEO succession as a continuous discipline, not an event.
- Align early on the profile required for the next phase of strategy.
- Develop internal candidates with real P&L and transformation exposure.
- Move quickly from CEO selection to structured support during the first year.
Take-away
CEO transitions are defining moments. Managed well, they become catalysts for strategic clarity, leadership renewal and sustained organizational momentum.
We are grateful to Spencer Stuart for their in-depth analysis of CEO transitions. Research is based on publicly available data as of December 31, 2025, covering the S&P 1500, which includes the 1,500 largest U.S. listed companies and represents approximately 90% of U.S. market capitalization.
