09-20-2022
Last week Target joined several other companies including 3M, Boeing, and Merck in eliminating mandatory retirement policies. Target’s move will allow current CEO Brian Cornell, 65, to remain in his role for three more years.
This shift points to a trend among corporations and is reflected in recent research from Spencer Stuart indicating that the average age of an outgoing chief executive reached age 64 in 2021, up from 61 in 2020. These changes in policy allow high-performing executives to remain in their jobs and reflects a shift in perception about the age appropriateness of a top executive. “People are working later in their life," said Andy Challenger, senior vice president of global outplacement firm Challenger Gray & Christmas. “The common perception of when someone should retire has changed."
The use of age limits for executives “can also carry some age-related bias that older people are less creative or more conservative in leading companies,” said Mo Wang, an Academy of Management Scholar and a professor at the University of Florida. Wang added that older executives “keep important institutional knowledge that may be difficult to replace if there is no clear succession plan.”