Extreme Experience: Septuagenarian CEOs
When Senator John McCain takes the stage at the Republican National Convention in Minneapolis on Sept. 4, he will become the oldest candidate ever to accept his party's nomination for a first-term President. McCain, who will be 72 when he formally accepts the nod, has sought to turn his advanced years into an attribute (he is wise) and a counterpoint to the message being championed by his 47-year-old rival, Senator Barack Obama (he is for a fresh start). This election, at least on one level, is a national referendum on change vs. experience.
A similar dynamic is at work in business. It often seems as though young people rule the world, especially since the dot-com boom (Hello, Google (GOOG) and Facebook guys). But you might be surprised at how many senior citizens—media moguls, casino kings, Chinese tycoons—are cutting deals, starting new businesses, and generally kicking boomer and Gen Y butt.
If 60 is the new 40, then 80 is the new 60. Mellowing with age simply doesn't compute for these folks. Every morning, Sumner Redstone, the 85-year-old chairman of Viacom (VIA) and CBS (CBS), rises at 5 in his Beverly Hills manse, swims, rides an exercise bike, runs on a treadmill, and peruses financial reports until the markets open. Rupert Murdoch, 77, goes a few rounds with a boxing coach before setting off to run his global media empire. Playboy Editor-in-Chief Hugh Hefner, 82, may get a workout from exercising the fabled prerogatives of his job.
We decided to take the measure of these people. We surveyed our global network of correspondents and came up with a list of folks who range in age from 75 to 100 and run their companies or wield real influence in business. We ranked them from oldest to youngest and called our list Twenty-Five Over Seventy-Five. (There were so many, we opted to list another 25 on BusinessWeek.com.)
The first thing you'll notice about our list is that for the most part these people are founder-entrepreneurs. From Hong Kong's Li Ka-shing to Wall Street's Muriel "Mickie" Siebert to Belgium's Albert Frère, they answer to no boss. And even when they have shareholders watching their every move, many of these seniors control their companies through supervoting stock. Does extreme experience pay off? Not always. A back-of-the-envelope calculation shows that most of the seniors on our list who run public companies failed to beat their respective indexes over the past five years. There are exceptions. Warren Buffett's Berkshire Hathaway (BRK.A) is up 59% over that period, vs. 40% for the S&P 500.
Septuagenarians running the show is not the norm in the corporate world. At most companies, 65 is the cutoff. At that point merit and years served are meaningless: It's time to take the gold watch, hit the golf course, and start collecting the pension. People who'd prefer to keep working feel robbed, of course. Veteran auto executive Robert A. Lutz recalls Chrysler letting him go 10 years ago because he had reached that milestone. "I'm finally getting pretty good at this and have learned many lessons the hard way," he recalls. "So they throw this asset away and send me home."
Management gurus have long argued that companies need to be more flexible in matters of retirement. Jeffrey A. Sonnenfeld, who teaches management at Yale University, acknowledges executives should face "regular, brutal assessments," whatever their age. "But just as race isn't used as a proxy, age shouldn't be, either."
We know what you're thinking. Older people resist change. They are prone to "senior moments." They are always fighting the last war. Sometimes that's true. But they also have historical perspective, as well as impressive contacts built up over a lifetime.
They can be adept at weighing risks and spotting opportunity.
These are useful attributes at a time of epic upheaval. In industry after industry, rapid-fire change is putting executives to the test. Many companies also find themselves lacking institutional knowledge, partly a result of the incessant job-hopping of today's generation of managers. In such circumstances, the out-to-pasture retiree can look like a savior. Gerard R. Roche, senior chairman of headhunter Heidrick & Struggles (HSII), 77, has placed several older executives in recent years. "The key," he says, "is that they still have their marbles."
Typically, bad things have to happen before companies make an exception to retirement rules. In June, Hearst CEO Victor F. Ganzi resigned unexpectedly. The board turned to 75-year-old Frank A. Bennack Jr. to return to the job he had held for 24 years. In 2004, Delta Air Lines (DAL) brought in board member Gerald Grinstein, then in his 70s, to run the airline. As for Lutz, at 76 he holds arguably the most important job of his long career. Now General Motors (GM)' vice-chairman, he's overseeing the carmaker's shift away from gas-guzzling trucks and SUVs.
Older executives often evince a been-there-done-that serenity. "I feel much freer about taking risks," says Harold Burson, who co-founded public-relations firm Burson-Marsteller in 1953 and at 87 continues to advise blue-chip clients. "The planet is not going to stop spinning if I'm wrong." And despite the conventional wisdom that people become more conservative as they age, Burson says he routinely rejects orthodoxy. For example, he encourages CEO clients to speak out much more forcefully on public issues, such as trade. "Fifteen to 20 years ago," Burson says, "I would have said, keep your head under the parapet and work the system."
Most senior executives cite the value of such intangibles as gut, patience, and perspective. They say younger executives often lack these. "Sure, younger managers don't have the advantage of experience," says Redstone. "But I find they don't study history to be able to make the best decisions for their companies." Others say the MBAs they work with are overly fixated on data and have had the creativity educated out of them. Siebert, who runs her eponymous investment firm, says young traders, having only experienced a bull market, are now unprepared to battle a bear. "They made money so quickly and in such vast quantities," she says, "that they didn't realize they could lose it twice as fast."
Finally, age confers on its wearer a certain immunity to internal politics. These folks can get away with saying things their younger colleagues would never dare. Lutz has become a kind of provocateur at GM. He was the only executive willing to push for an electric car despite GM's debacle the first time around. "One colossal advantage of being in extra innings is you can tell it like it is, say what you think, and largely eschew political caution," he says. "I often ask, rhetorically, if they don't like it, what are they going to do? Send me into early retirement?"