Experience is a highly desired attribute for a new CEO. This is commonly accepted corporate wisdom. What is not so obvious is that senior management experience at another company, even in another industry, can be regarded just as highly as experience in the firm. Fully one-third of newly-appointed CEOs were new hires, as shown in the table below. At the same time, more than 85 percent were in their 50s or 60s when appointed.

For over 20 years, Management Practice Inc. (MPI) has surveyed the twists and turns of the CEO's route to the top of the largest U.S. industrial corporations. Each year, MPI contrasts the attributes of CEOs appointed in the most recent year with all those appointed previously. (Education and professional background were reported in our June and September Bulletins.) This year, attributes of 462 CEOs were analyzed: 89 new appointees versus 373 in-place CEOs.

Source: Management Practice Inc.'s analysis of the backgrounds of CEOs prom the largest U.S. industrial companies, based on listing in Forbes Magazine. May 23, 1994. Sample excludes banking, insurance, securities, retail, journalism, and "founders." Newly appointed refers to CEOs appointed in 1993 or January-February, 1994.

One possible reason for the high proportion of new hires may be the spate of "early retirements" caused by corporate restructurings which has created a cadre of experienced executives from which Boards can choose. One such example is Ervin R. Shames, former CEO of Stride Rite, who became CEO of Borden. Judging from the current press, Mr. Shames may move again.

Major industry shifts were also made by newly-appointed CEOs George M.C. Fisher and Albert J. Dunlap. Fisher moved from CEO of Motorola to Eastman Kodak. Dunlap moved from CEO of Consolidated Press Holdings in Australia to Scott Paper Company.

Whether a CEO was appointed prior to 1993, or in the 1993-94 years, the average experience level with the corporation was approximately 15-16 years. In some cases, the experience was gained within the same company the CEO is now leading such as: Robert E. Weissman of Dun & Bradstreet, Kenneth L. Wolfe of Hershey Foods, William H. Grigg of Duke Power, and Wayne M. Allen of Phillips Petroleum. Others gained their experience elsewhere as did Louis V. Gerstner at IBM.

As MPI looked into the details, some other interesting data appeared. To become CEO at one of the biggest of the big requires a long time in the corporate fold. In the top 20 (based on sales), only 5 CEOs had been with their companies less than 10 years before becoming CEO. On the other hand, the smallest of the big provide a faster route to the top. In the Bottom 20 of our survey, only 5 CEOs had been with their companies more than 10 years before reaching the top. As for long tenure a' CEO, tied for the longest CEO-ship are Harry Cornell, Jr. of Leggatt & Platt and Laurence Tisch of Loews. Each has been his company's CEO for 34 years.

Another interesting factor in this year's survey is that the preponderance of the CEOs were born east of the Mississippi River. Although the geographic center of the U.S. population is now located west of the Mississippi in south-central Missouri, almost 72 percent of the U.S.-born CEOs were born east of the Mississippi. Seven percent were foreign born, with Canada (9 CEOs), England (6), and Germany (5) having the highest representations. None were native-born Japanese.