Is 90 the new 80?August 16, 2013: 9:00 AM ET
Octogenarian CEOs are so last decade. Meet the new senior senior executives.
By Beth Kowitt, writer
FORTUNE -- David Murdock's push to take Dole Food private was all about long-term strategy. The CEO is buying out his company for $1.2 billion in order to implement a turnaround away from the pressures of the public market.
That's a big chunk of cash -- to say nothing of an open-ended project -- for anyone, let alone an executive who turned 90 in April. But to Murdock, age wasn't a deterrent. The Dole (DOLE) CEO, who is obsessive about his diet and health, has said he has his 125th birthday in his sights.
It's now a non-event when executives decide to hunker down in the corner office into their 80s. But Murdock is paving the way for nonagenarians. He is the oldest CEO in this year's Fortune 500, followed by four in their 80s: O. Burton Smith of Sonic Automotive (86), Warren Buffett (82), Rupert Murdoch (82), and Sheldon Adelson of Las Vegas Sands (80).
Murdock is joined in the nonagenarian CEO club by Melvin Gordon of the notoriously close-mouthed Tootsie Roll Industries, whose COO and president is his octogenarian wife, Ellen Gordon.
Murdock and other members of his cohort have signaled neither plans to retire, nor are they retiring personalities. They're bucking the trend of a declining average tenure for CEOs, says Bob Damon, president of North America for executive search firm Korn/Ferry International. Today CEOs stay in the job around five years, down from seven in 2008, as shareholders become impatient and give leadership a shorter time horizon to move the needle.
Meanwhile demand has increased for seasoned leaders who can navigate a challenging and complex business cycle. As a result, Damon says boards want CEOs with "dents in their helmets" that have been through similar scenarios and can rely on their experience. "That all points to CEOs who have more years under their belt," he says. Trends around health and wellness are enhancing their ability to perform on the job, he adds.
The biggest challenge for companies with CEOs in their 80s or 90s is succession planning, says Paul Hodgson of governance and research firm BHJ Partners. Board members need to have someone waiting in the wings, which is not something they're used to because of their chief executives long tenures. In the case of companies with founder-CEOs, they've also never gone through the exercise of finding a new leader. "Part of it is they've been there so long," he says, "they don't think they'll ever have another CEO so why bother looking for one."
For the likes of Murdock, this is likely the final gig. "There's no reason for any retention bonuses," Hodgson says.