Spencer Stuart Board Index
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<strong>Board</strong> Composition<br />
Mandatory retirement ages keep rising<br />
»<br />
» Consistent with the past 10 years, about three-quarters (73%) of S&P 500 boards report having a<br />
mandatory retirement age for directors. 11% report that they do not have a mandatory retirement age,<br />
and 16% do not discuss mandatory retirement in their proxies.<br />
»»<br />
While the number of boards with mandatory retirement ages has remained consistent, retirement ages<br />
have continued to increase. 39% of boards have retirement ages of 75 or higher, compared with just 9%<br />
in 2006. Four boards have a retirement age of 80. In 2006, 38% set their retirement age at 70, or lower;<br />
today just 5% of boards have a retirement age of 70, and no board has set it lower than that.<br />
»»<br />
The most common mandatory retirement age is 72, set by 45% of S&P 500 boards, a decrease from 50%<br />
last year.<br />
Mandatory Retirement Age<br />
2016 2011 2006<br />
70 and younger 5% 16% 38%<br />
71 1% 1% 1%<br />
72 45% 55% 48%<br />
73 4% 5% 3%<br />
74 6% 3% 1%<br />
75 and older 39% 20% 9%<br />
N = <strong>Board</strong>s that have set a mandatory retirement age: 352 for 2016, 362 for 2011, 376 for 2006.<br />
Small decline in average board tenure<br />
»<br />
» The average tenure of S&P 500 boards is 8.3 years, a slight decrease from 8.7 five years ago. The median<br />
tenure has declined as well in that time, from 8.4 to 8.0.<br />
»»<br />
The majority of boards, 63%, have an average tenure between six and 10 years.<br />
»»<br />
19% of boards have an average tenure of 11 or more years, compared with 21% in 2015 and 19% in 2011.<br />
18% have an average tenure of five years or less, up from 17% last year.<br />
»»<br />
The longest average board tenure is 21 years, and the longest-tenured director has served 48 years.<br />
»»<br />
35% of independent directors have served on their boards for five years or less, 28% have served for<br />
six to 10 years, and 22% for 11 to 15 years. 15% of independent directors have served on their boards for<br />
16 years or more.<br />
»»<br />
With the average tenure for sitting CEOs at 7.2 years, most boards will serve with two CEOs.<br />
<strong>Board</strong> Average Tenure<br />
18% 63% 18% 1%<br />
5 years<br />
or less<br />
6 to 10<br />
years<br />
11 to 15<br />
years<br />
16 years<br />
or more<br />
18<br />
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