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The Washington Post: Target Axes Mandatory Retirement Age as CEOs Stay on the Job Longer

10 Sep 2022
Retailer joins big names like 3M and Boeing in rethinking age-limit policies to stick with high-performing executives.

Originally found at The Washington Post

Mo Wang, a professor at the University of Florida, and Anthony Nyberg from the University of South Carolina, share insight as Target this week became the latest major company to ax its policy of mandatory retirement at age 65, keeping chief executive Brian Cornell, 63, at the helm for another three years.

The Minnesota-based big box giant joins firms like 3M and Merck in rethinking the convention of ushering corporate executives out of the workforce once they reach a certain age, often 65. The moves are a way to keep highperforming

executives in their jobs. Boeing last year raised its mandatory retirement age to 70 to keep CEO Dave Calhoun for another five years.

Older executives are sticking around longer, with the average age of an outgoing chief executive reaching 64 in 2021, up from 61 in 2020, according to research from SpencerStuart, which tracks data on CEO transitions. “Mandatory retirement policies for CEOs are a thing of the past,” said Matteo Tonello, managing director of environmental, social and governance research at The Conference Board, a think tank focused on corporate management.

The Conference Board stopped tracking the use of such measures in 2017, Tonello said. By then, the few companies that had such policies in place “were not enforcing it to avoid being accused of age discrimination or avoid finding themselves in a situation where they’d have to force out a well-performing CEO or to force out a CEO at an inconvenient time and without a solid succession plan.”

Cornell, who is 63, has led Target since 2014, having previously worked for Walmart and PepsiCo. The company has added nearly $40 billion in annual revenue since Cornell joined, the executive said in a statement Wednesday. “It was important to us as a board to assure our stakeholders that Brian intends to stay in his role beyond the traditional retirement age of 65, Monica Lozano, lead independent director of Target’s board of directors, said in a statement. “We enthusiastically support his commitment and his continued leadership, especially considering his track record and the company’s strong financial performance during his tenure.”

 

Continue reading the original article at  The Washington Post.

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