The same-day deaths of two aging chief executive officers — industry icons in railroading and banking — show why some investors and governance experts want companies to disclose more about succession plans and the health of their executives.
CSX Corp’s Hunter Harrison, 73, died on Saturday, one day after news of his medical leave pushed the railroad’s shares down the most in six years.
M&T Bank Corp said Robert Wilmers passed away “suddenly and unexpectedly” at age 83 — just months after the death of his own heir apparent.
The deaths underscore the privacy, governance and legal issues entangled in one fact of shifting demographics: As the US population ages, so do the corporate chieftains.
The average age of a chief executive has risen 4 percent in the past decade and there has been at least one health-related change atop Standard & Poor’s 500 Index companies in each of the past three years, executive recruiter Spencer Stuart said.
“What we’re facing is the new paradigm of work,” said Davia Temin, head of the New York-based crisis-management firm Temin & Co. “When people are in the zone of what they love to do, most of them are not going to voluntarily give that up. That means that people will work later and maybe with a little bit more of an illusion that death won’t apply to them.”
Companies might be forced to act as that illusion fades.
Even with the deaths of Wilmer and Harrison, data compiled by Bloomberg shows there are still 50 chief executives in the S&P 500 who are 65 or older. Nineteen of those exceed age 70 and three are older than 80.
Because death is unpredictable, succession is increasingly important, Temin said.
First a company has to have a clear communication plan for all contingencies, including illness and death, and have a plan for the next chief executive in place that is at the very least “almost ready now,” she said.
One difficult area with chief executive health disclosures is that they do not always share all the information they have with their companies, former US Securities and Exchange Commission (SEC) chairman Harvey Pitt said.
Key executives should sign waivers when they are hired by public companies that would allow disclosure of health issues at the board’s discretion, said Allan Horwich, a partner at Schiff Hardin and a Northwestern University law professor.
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