This weekend, Warren Buffett will preside over Berkshire Hathaway’s annual meeting, an extravaganza that will include a newspaper tossing contest, a table tennis challenge and a cocktail reception at the company’s jewelry store, Borsheims. There’s a reason for the party-like atmosphere: This year marks Buffett’s 50th at the top, a half-century of smart investments, successful acquisitions and folksy wisdom from the sage of Omaha.
But however remarkable Buffett’s long tenure may be – he has been a director and controlling shareholder of Berkshire Hathaway since 1965, and has held the title of chairman and CEO since 1970 – he is not actually the longest-serving chief executive of a U.S. public company. That distinction goes to Leslie Wexner, the founder, chairman and CEO of L Brands, which owns brands, such as Victoria’s Secret, Bath and Body Works and Henri Bendel.
Wexner founded L Brands in 1963, two years before Buffett took a controlling stake in Berkshire, and at a time when lingerie looked nothing like the barely-there items adorning today’s runway-strutting “angels.” At the time, however, Victoria’s Secret wasn’t part of the company’s stable; L Brands didn’t purchase the intimate apparel catalog and six stores until 1982. Rather, Wexner started with a single store in Ohio called The Limited, which grew into the shopping mall-staple clothing brand the company has since sold off.
Such tenures, of course, are highly unusual in the corporate world today. We asked S&P Capital IQ to pull the names of the longest-serving current CEOs at S&P 500 companies from its database, which is based on data made available by companies. Just four have held the CEO job for at least 30 years: In addition to Wexner and Buffett, there is Universal Health Services CEO Alan Miller (he founded the company in 1978) and 21st Century Fox CEO Rupert Murdoch (he has been CEO since 1979).
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Meanwhile, the number of currently serving CEOs who have tenures even half as long as Buffett’s 45 years is just 16. And only 21 can say they were CEO before the year 1995.
Most of these marathon-tenured leaders are not the typical public company’s hired hands. Rather, they tend to be founders, scions of family-run companies, or CEOs who transformed smaller businesses into corporate giants through strategic acquisitions or visionary ideas. They include names, such as Monster Beverage co-founder Rodney Sacks (CEO since 1990), Regeneron Pharmaceuticals co-founder Leonard Schleifer (1988), as well as Aflac’s Daniel Amos, whose father and uncles created the insurance company we all now associate with a quacking duck. (He also became CEO in 1990.)
In fact, the average chief executive’s number of years in the top job is only about a fifth of the time Buffett has spent there. According to The Conference Board, in 2014, the average term of a CEO of an S&P 500 company was 9.9 years. That number represents a continued upward trend from the 7.2-year average in 2009, the low point in the Conference Board’s data, which stretches back to 2001.
The upward tick is partly due to the recovering economy, said Matteo Tonello, a managing director with the firm. But he also sees more engagement between outside shareholders and boards, he said, rather than efforts from investors to drop the axe: “They’re less focused on ousting the existing CEO and more interested in fixing the system of incentives that’s really needed to steer performance.”
That may be due to a more realistic view of how much a single person really can sway the fortunes of a company. “We no longer live in a time where the belief is that the CEO is the only person responsible for the success of the organization,” he said.
But even this past year’s higher number is skewed by a couple of long-tenured CEOs who recently gave up the top job. The Conference Board’s report says that if you take out two long-tenured CEOs who departed from the job in 2014 – Oracle’s Larry Ellison, who had a 37-year run, and Expeditors International’s Peter Rose, who was CEO for 26 years – the average tenure for 2014 sinks to exactly nine years.
That effect on the average is yet another reminder of how unusual such long reigns are in corporate America. But they also help us remember that even lengthy tenures eventually come to an end. Berkshire Hathaway investors are preparing for that reality. The company’s legendary CEO will turn 85 in August, and the company has made hints about his successor. But not before they celebrate this year’s big milestone.