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 Dec. 16, 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 U.S. population ages, so too do the chieftains of corporate America. The average age of a CEO has risen 4 percent in the last decade and there has been at least one health-related change atop Standard & Poor’s 500 companies in each of the past three years, said executive recruiter Spencer Stuart.
Even with the deaths of Wilmer and Harrison, data compiled by Bloomberg shows there are still 50 CEOs in the S&P 500 who are 65 or older. Nineteen of those exceed age 70, and three, including Warren Buffett, are older than 80.
In the case of M&T, Wilmers outlived not one but two likely successors. In its Dec. 16 statement, M&T outlined how Wilmers’ board and operational roles will be split among four officials. A spokesman for M&T declined to comment further for this story.
CSX already faces questions about whether acting CEO Jim Foote, who joined in October, will be able to continue Harrison’s work or whether the railroad will need to hire an outside executive.
Key executives such as the CEO, top officer and directors should be forced to 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 Northwestern University law professor.
Horwich has proposed modifying SEC rules to specifically require disclosure of any health implications that might effect an executive’s ability to run the company in the ensuing two years.
Yet there has been no formal move to change SEC rules, and any “pressure for rules has to come from the marketplace,” said Tom Lin, a Temple University law professor who researched CEO privacy and disclosure issues. Frankly, he said, not every CEO is as important to their companies as Buffett or the late Steve Jobs.
Green writes for Bloomberg.