How does having “CEO” next to your name sound? It could happen, as new research into Fortune 500 companies shows an interesting trend.
A study from CCL Search LLC, a financial-officer recruiting firm, shows that 12% of current Fortune 500 CEOs were once CFOs, and that number will increase next year when Christopher Kubasik from Lockheed Martin Corp. and Leo Denault from Entergy Corp. each take the reins of their respective companies as CEO.
The research also shows that the path from CFO to CEO is more common in certain sectors that others. Industrial, consumer, natural resources, transportation, utility/power, and services lead the way in CFO-turned-CEOs.
Chris Lanhoff, founder of CCL, told The Wall Street Journal that sectors like technology and health care are less likely to see CFOs take the top spot because “scientists rule the day” in those sectors.
But the aforementioned leading sectors may value financial skills more because of the companies’ large capital expenditures.
Time well spent
According to the research, only a third of CEOs went directly from CFO to CEO, as most went from CFO to COO or divisional president roles in between. On average these execs spent eight years working up the ladder to CFO and nearly 5 years as CFO.
Perhaps the most interesting statistic: the majority of companies with CEOs who were formerly a CFO at the company have outperformed the Standard & Poor’s 500-stock index over the past 18 months.